Lately, it seems as if everyone is franchising their business for business development. In fact a new franchised business opens every 15 minutes of every business day.
While it is impossible to determine if a business would make a good franchise without doing a significant amount of analysis, there are important decisions to make for developing a franchise model. You’ll need to make many decisions about how you’ll operate as a franchisor:
- The franchise fee and royalty percentage.
- The term of your franchise agreement.
- The size territory you will award each franchisee.
- What geographic areas are you willing to operate in?
- The type and length of training program you will offer.
- Whether franchisees must buy products or equipment from your company.
- The business experience and net worth franchisees need.
- How you will market the franchises.
- Whether you want an owner-operator for each unit or area/master franchisees who will develop multiple units.
Franchise business model development provides advantages for both the seller and buyer. For franchisors, the primary benefit is the ability to use other people’s money (entrepreneur) to expand the brand more rapidly than they could on their own or through investors or lenders. The initial franchise fee and ongoing royalties they collect allow franchisors to build their brand without sacrificing control to outsiders or the pressure of repaying lenders. The fee and royalty is used to fund operations at corporate headquarters, train and support franchisees, market and advertise the brand, improve the quality of goods or services, and build the brand in their marketplace. We offer expert consulting services on franchise industry in India to all sorts of businesses. To develop your franchise model business plan call us today!