Steps to make a good franchise system – ​​A guide to becoming a successful franchisor in India.

Written by Sparkleminds

As a business owner, you are fully prepared to convert your business into a franchise model. But putting this thought into practicality takes a lot of strategic planning, marketing and execution. Having the thought of franchising your business is just not enough, you need to have a good franchise system which will ensure you have long-term growth and profitability.

So are you ready to know how you the franchisor can make a good franchise system? Then continue to read this insightful blog.

Steps to make a good franchise system

Enhance Your Business By Creating The Perfect Franchise System in Simple Steps

A good franchise business is made up of numerous segments. Let me go over a few of the things you should keep in mind before entering the franchising phase.

  1. Expertise: Franchising businesses that are doing well have a wealth of knowledge in the field. Not technical know-how, but general business acumen is what they’re after in a franchisee. Therefore, you can enter a new industry with relative ease through franchising.
  2. Skilled training: Franchisors are required to become skilled trainers to impart their knowledge as well as experience to their franchisees.
  3. Recognised brand: The significance of name recognition varies according to the sector, but in consumer-oriented enterprises, it is the factor that differentiates franchises from independent businesses.
  4. Well-established systems: Proven programmes tailored to the industry should be what you anticipate. Moreover, franchisors that are worth their salt know how to market their franchises effectively.

These are four crucial aspects to remember while starting your franchising journey. But to get there and ensure these keys are focused upon, here are some steps to take you down the successful path.

Steps To Establish A Good Franchise System in India

1. Understanding the market.

​​Firstly, get a feel for the Indian market by learning about its rules, competitors, as well as customers’ tastes. Modify your business model so that it is suitable for the local market.

If you analyse the market properly, it will help you.

  • Have a better understanding of the customer preferences, tastes as well as purchasing patterns. Moreover, this will enable you to tailor your products and services based on the market demand and customer requirements.
  • Help you identify your target audience, where you can design your marketing strategies to suit the demographic location.
  • Better understanding of the demand for your product or services in that market. They can assess market trends, competition, and growth possibilities to evaluate if franchising in India is feasible. This data informs market entrance strategies like franchise outlet location selection.
  • Evaluate the level of competition. They can assess market trends, competition, and growth possibilities to evaluate if franchising in India is feasible. This data informs market entrance strategies like franchise outlet location selection.

2. Establish a Proven & Profitable Franchise Business Model.

Develop a successful business strategy that can be easily extended to other areas. Make sure your franchise model can grow with your company and bring in regular profits for everyone involved.

Having a successful business plan can help.

  • An effective business concept is replicable in various locations. To guarantee that all franchise units in India provide the same high-quality products and services to their customers, franchisors should establish a transparent and uniform operational framework. This consistency builds client trust and loyalty at any franchise location.
  • Profitability underpins good business models. In India, franchisors must create a business plan that creates enough returns for both parties.
  • The business concept must be scalable to extend the Indian franchise system. Franchisees should create a business plan that scales without sacrificing quality or efficiency.
  • Flexible business models let franchisors react to market changes and seize new opportunities.
  • A strong business plan boosts the Indian franchise brand’s repute.

3. Ensures your business is legally compliant with Indian Laws.

Be familiar with the rules and regulations that govern franchising in India, and check that your agreement follows them. To ensure that all parties’ interests are adequately protected in the franchise agreement, it is advisable to consult with an attorney.

Being legally compliant with Indian laws will help.

  • Following the law makes sure that the franchise system stays within the law, which gives it legitimacy and trustworthiness in the eyes of Indian franchisees, customers, and governmental authorities.
  • Legal compliance protects franchisors’ trademarks, copyrights, and valuable business processes and know-how.
  • Legal compliance requires thorough franchise agreements that clearly describe franchisor and franchisee rights, obligations, and responsibilities.
  • Being legally compliant protects franchisees by setting explicit rights and remedies for contract breaches and disputes.

4. Developing a strong brand and establishing clear SOPs.

Create memorable brand identities and set high standards for your offerings, including the customer service you provide. Maintaining a steady schedule is essential to attracting and retaining customers.

Here is how it can help.

  • Indian franchise locations are consistent with clear branding and standards. Consistency fosters customer trust and loyalty since they know what to anticipate at every franchise location.
  • Franchisees in India attract clients with strong branding in a congested market. People are more likely to connect with and remember a brand that has been around for a while and has a clear message and look.
  • Branding and standards preserve the Indian franchise brand’s value. To ensure franchisees follow brand requirements and brand consistency, franchisors can audit, inspect, and check compliance.

5. Building a strong franchise network.

Promote teamwork and information exchange by creating a welcoming environment for franchisees. Create opportunities for franchisees to meet face-to-face and share and learn from their experiences at conferences and other events.

Building a strong franchise network can help.

  • Indian franchisors can grow faster with a strong franchisee network.
  • Indian franchisees contribute local market knowledge, relationships, and also skills.
  • A strong network of franchisees makes sure that franchise places are well-run, efficient, and also profitable. This helps the Indian franchise system as a whole be successful.
  • Franchisees who are truly invested in the success of the business and will go to great lengths to protect their name and image make up a solid franchisee network. Franchisees’ word-of-mouth and customer experiences boost brand reputation in India.
  • To stay ahead of the curve when it comes to consumer trends, regulations, and market conditions in India, franchisors rely on a varied network of franchisees.

These are a few of the crucial steps. Apart from this, you as the franchisor can ensure.

  • Provide franchisees with thorough training as well as continuous support in areas including customer service, marketing, and operations. Maintain consistent contact with franchisees to answer their questions and also help them expand their business.
  • Pick franchisees with the right mix of brand loyalty, business acumen, as well as financial backing to ensure a smooth franchise launch and ongoing operation. Franchisees will only be able to successfully represent your business if you invest in their education and provide them with continuous support.
  • Create a plan for advertising as well as marketing the franchise to get people to visit franchise stores. Assist franchisees with marketing efforts and help them reach their target customers through digital and traditional means.
  • To guarantee openness as well as responsibility in franchise operations, set up mechanisms for tracking and reporting finances. Moreover, help franchisees run successful businesses by advising them on financial management techniques.
  • Take franchisee comments and market developments into account when you review and adjust your franchise system regularly. To maintain a competitive edge in the market, it is important to stay informed about industry advancements and best practices.

So, if you want to grow your business via franchising in India and want to get started in preparing a good franchise system right away, reach out to us at Sparkleminds.

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Why Do Franchises Fail

Written by Sparkleminds

The franchise is considered to be the safest mode of expanding a business. With a small number of failures in franchising compared to start-ups, it has become ready to go to the place of interest to invest. However, recent show a different fact. So why do franchises fail? What are the biggest franchise mistakes that have been repeatedly done by few franchises and what can we learn from them??

There is nothing as a sure bet in business. Sometimes traits are blessings but might be a curse too. Let us decode franchise mistakes in order to learn and save future businesses.

Why Do Franchises Fail:

Scattered Business Plan:

The business plan/model will be the main focus of most of the parties involved. This is the most common reason why franchise businesses fail. The best way to test whether or not a franchise has unrealistic expectations is to examine its business plan.  With initial success, franchisors want to expand into other markets without structuring the complete franchise system. This leads to confusion in the operations aspect and with the roles and responsibilities. This is generally found in new businesses. The risk of joining such franchises is very high and is a sure-shot path to crashing the entire business.

To add on, competition should also be assessed with a broad view. It has become very easy to replicate a business. Without safeguarding the intellectual properties, the franchise is at a high risk of losing. SWOT analysis is a great tool to understand the market scenario and adjust the business model accordingly.

  • Inadequate backend support:

The franchisor is responsible to give a strong support system to the franchisees. This can be in regards to marketing, IT, logistics etc. This occurs usually when the franchisor is not in a financially sound position. Without constant support, the franchise system creates loopholes which are cannot be monitored easily.

  • Poor Training:

The training of franchisees is the most important factor when it comes to franchising. Training and support have to be taken seriously. Every successful franchise has ensured proper training modules among franchisees. The delivery has to be consistent across all franchises.

Reminder courses and new training programs not done at regular intervals makes the employees lose track of the procedure. The franchisees lose the focus towards the core business due to such intervals. This is the top reason why franchises fail. Once the systems are not followed, the franchise cannot perform at its optimal level.

  • Use of technology:

There is no doubt that the internet has made the business world change into a complete dimension. If one does not move with technology, the expansion does not take place. It can be digital marketing, new equipment or the way of providing the service online. The generation is tech-savvy and wants the results as fast as possible. If the services are not upgraded with time, the business ends up losing out on customers and falls back in the line.

  • Keep your customers first… ALWAYS!!:

Be a giver and not a taker. There is the mistaken concept of always being right. As a franchisor, individual growth can only happen when the customers are happy. That is why numbers talk for themselves. The real reason for the success is in fact the customers. Keep your customers happy and so will be the franchise.

  • Get the numbers straight:

Many are delusional when it comes to facts. The imaginary number built in the head creates a false situation of bliss. That is why formal market research must be conducted to get the real facts. The decisions must be made based on the reports and numbers. Fictionalized figures cause the only demise to self and others surrounding.

  • Recruitment:

There is a big difference between loving a franchise and running a franchise. Many are simply not meant to run a business. Managing human resources is a task and requires specific skills. The franchisee need not be from a particular professional background. The franchisee should or assign a manager who is capable of handling operations and make certain the systems are followed. Hence, get your recruit your franchisee done by an expert who will be a nice fit for your business. This, in most cases, does not happen and the franchise loses its control.

  • Insufficient funds:

Insufficient funds are the most common cause of all business failure, not only in franchising. Without adequate working capital, paying bills becomes an issue. Even if the business is profitable, it can still fail if its customers have not paid it on time. Understanding the difference between cash flow and profit can mean the difference between surviving and failing. Reinvesting in the business can work wonders and could eventually result in insolvency if not done from time to time.

Knowing is only half the battle won, but the execution by action is the only way out. Now that you’re aware of why do franchises fail, take appropriate steps towards it. So, create a backup. Gain control. Optimize the training. Learn from other franchises and implement them into your business. Get your business models assessed by a franchise consultant. Giving a thought to the failures and implementing solid strategies will help your franchise achieve great success.

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