Understanding Franchise Development Strategies While Franchising in India

Written by Sparkleminds

We all know that franchising is one of the best and most sought-after business growth strategies used by many businesses in India and globally. Yes, it is also known as the most effective growth strategy for businesses. So here we bring to you what could be beneficial when you franchise your business in India – the best franchise development strategy to incorporate.

Franchise development strategies for business expansion in India

Best Franchise Development Strategy To Use While Franchising Your Business in India

Owning a franchise comes with a lot of perks. Fast-entry into new markets with little capital outlay is the primary one. Therefore, it is the franchise owner’s responsibility to run and grow the business, not you.

Still, you are also away from most management responsibilities as you open additional units nationwide or even around the globe. In addition to expanding into new areas, franchisors can increase their profits.

So, that’s what we have given more emphasis on in this blog. Before we get into the development strategy aspect, let us first understand about franchise development.

What is franchise development?

The expansion as well as prosperity of a company depend on its franchise development efforts. So, how does franchise development work? Sales methods, marketing plans, legal issues, and also real estate are all a part of it.

Moreover, your brand’s concept design is the first step in an all-encompassing process, including launching franchises and ongoing brand development. Keeping your business relevant and successful today requires this process to remain ongoing.

Now that it is clear, let us proceed further.

Best Franchise Development Strategy For Successful Business Expansion in India

If you want to make your business a success, here are some franchise development strategies as well as opportunities to explore. Take all of them into consideration, and put into action the ones that you believe will be most beneficial to the future of both you and your business.

Franchise Development Strategy can be categorized into two segments –

  1. Strategies for Increasing the Influence of Your Business and Franchise Network
  2. A Guide to Streamlining and Organising Your Franchise Model

Let us get more details of each development strategy.

#1. Strategies for Increasing the Influence of Your Business and Franchise Network

a. Seeking the Help of Franchise Brokers:

Doing it alone to sell a franchise can eat up a lot of your precious time. Moreover, these days, franchisors can choose from a wide variety of advertising channels. A franchise broker is among them. As a go-between for the franchisor as well as franchisee, a franchise broker or franchising consultant does the heavy lifting.

Directly assisting potential franchisees, a franchise broker presents them with several franchise opportunities and also guides them through the entire franchise acquisition process. Therefore, Hiring a franchise consultant can help you save time and quickly grow your business.

Because of their extensive networks, these brokers can effectively bring in franchisees for your business.

b. Implementing Referral Programmes:

To bring in new consumers, referral networks are a great technique to use. Therefore, get in touch with your current clientele and encourage them to recommend your business to their loved ones. Also, think about how these plans can be put into action most effectively.

With the right plans in place, you can attract a flood of new customers. Also, think of a great way to incentivize others to suggest your products and services. A promotional code, discount, freebie, points, or gift could be what it is.

c. Company Website:

The business’s website is important for franchisors to notice. Make sure that prospective franchisees have all the information they need there. You should detail the franchise options, the support available from corporate, the responsibilities of franchisees, the nature of the connection between the two parties, and more on your website.

Before contacting you, most purchasers prefer to see this information. You may weed out uninterested applicants by outlining the key benefits of partnering with your business on the website.

Posting franchise owners’ reviews on the internet can be helpful. Honest feedback and experience can win buyers. Adding reviews, cases, and owner profiles to your website makes it easy for potential franchisees to select. Share everything about your brand.

d. Franchise webpages and catalogues:

Franchise portals publish franchise information, opportunities, and costs online. Online platforms help franchisors reach specific audiences. Find a good site because not all can bring buyers. A solid franchise catalogue has the latest information.

Good reputation and referrals are typical. Modern franchise portals innovate and establish new franchise promotion and sales forms. A franchise gateway can boost growth.

e. Franchise Expo:

Franchise exhibits attract the most desirable audience, which is their main benefit. Especially entrepreneurs and investors. These exhibitions attract visitors seeking information and commercial opportunities.

Franchisors can promote the franchise, talk to possible franchisees, and learn from other franchisors at these events. Sale agreements can be made at the event. These exhibitions help promote your business and gather franchisee contacts.

f. Having a strong social media presence:

About every business has a social media page. Franchisees use them to market, tell, and sell. Promote your franchise on social media by posting regularly and having an active presence across all major channels. Some things you may share online to raise your profile and bring in new franchisees and consumers are as follows:

  • Reviews from existing franchise owners
  • New franchise information
  • Certifications, awards, interviews, and product/service promotion

g. Developing Your Brand:

Personal brands are powerful franchising acquisition tools. Many franchisees want to know the brand owner. Since you will be collaborating with them, you must treat each other with dignity and adhere to common principles to have a fruitful partnership.

It’s good to let franchisees talk to the CEO or founder. You can build your brand to attract new franchisees and customers:

  • Social media presence. You can share corporate news and participate in events. It lets you showcase your expertise and business to a large audience. Create an online blog. It’s a chance to demonstrate your knowledge, express your ideas, and discuss current events.
  • Include personal information on the corporate website. Describe the journey that led to the launch of your company and your current position. Sharing your contacts there lets potential buyers contact you or your representatives.

Therefore, all real-life and online brand owner participation will build credibility and trust. Trusting you as a person will make your franchise credible.

#2: A Guide to Streamlining and Organising Your Franchise Model.

a. Drafting the franchise agreement.

All franchise business parts are defined in a franchise agreement. Franchisors usually create their franchise packages. The franchisor must outline its work standards while designing a franchise package. Properly defined franchise business standards and guidelines make all franchised operations efficient.

The franchisor must outline the relationship, including services and products, franchisee obligations, franchise costs, and monthly payments. Determine all business facts. Franchise development and operation depend on proper franchise agreements.

b. Consulting with Franchising Experts.

New franchisors find franchising tough. Learn this approach in detail to understand it and how to develop a sellable franchise. First-time franchisors should seek the advice of franchising advisors. These developers have the expertise to help you start a franchise and plan its growth.

Therefore, hiring franchise consultants can help you save both time and money in the early years of your business, while also reducing the amount of work you have to complete. Pick consultants or specialists with a track record of accomplishment and extensive knowledge in putting together franchise packages.

Also, consultants help create and implement business concepts.

c. Implementing successful training programs and proper support systems.

Successful franchise development requires intensive training. Before franchising, a franchisor should create classroom and on-site training. All or most franchise business factors should be covered in training. You must explain all characteristics, goods, work procedures, brand organisation, and also management. You should carefully design a programme to train individuals for franchise ownership.

Support is essential after training. To reduce failure and maintain standards, you need a good support system to keep franchisees on track.

d. Setting a policy for territory.

Territorial policy is crucial while developing a franchise. Franchisors must assess which towns as well as areas a franchise will appeal to and its operating circumstances. A successful franchisor territorial policy leads to efficient network development.

Examine the market, competition, as well as regional characteristics. For future franchised unit expansion, franchisors must identify appealing regions and secure them. As you offer more franchise regions, you can open more units.

Entrepreneurs throughout the world are yearning to start a business in their hometown. So, we hope the franchise development strategy has proved helpful for new as well as existing franchisors.

Finally,

All of the above franchise development tactics as well as channels are popular and effective. Therefore, not all franchisors will benefit from them. Choose the best solutions for you. Every franchise is different, so what works for one may not work for another.

Thus, to succeed, you must experiment and attempt new things. Franchising is thrilling. Time and work invested in franchise development will pay off!

Speak to our experts at Sparkleminds for more on your franchising needs.

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Key Components Of A Franchise Business Strategy You Should Know About While Expanding Your Business in India

Written by Sparkleminds

As we all are aware franchising is a mode of expanding your business not only across the country but globally as well. Therefore, all those franchisors who are considering the expansion of their business today must read this blog. It has all aspects of the key elements a Franchise Business Strategy should contain. Also preparing a franchise business strategy is essential before giving a franchise of your business in India, what benefits you can achieve when you have the perfect franchise business strategy and how we can help you.

Franchise business strategy in India

10 Key Elements Of A Franchise Business Strategy in India

The process of franchising a business in India requires meticulous preparation and execution to guarantee complete success.

The following is a list of essential elements that must be incorporated into this strategy:

  1. Performing a market feasibility analysis in India:
    1. Find out how much interest there is in your service or product in various parts of India. This is by doing a thorough market analysis.
    2. Conduct an analysis of the competitive environment and determine the extent to which the franchising model has the potential for expansion.
  2. Ensuring legal compliance:
    1. Gain an understanding of the legal standards and regulations that pertain to franchising in India, and ensure that you comply with them. The franchise agreement should be reviewed by an attorney to ensure that it is in compliance with the laws of India.
  3. Franchise Business Model Development:
    1. Clearly outline your company strategy and operations, making sure that they are scalable and capable of being replicated. The documentation of the procedures, systems, and standards should be provided in great detail.
  4. Creating criteria for franchisee selection:
    1. Considerations including financial security, commercial aptitude, and brand loyalty should be part of the selection process for franchisees.
  5. Structuring the Franchise Fee & Royalty Fees:
    1. It is necessary to ascertain the initial franchise cost as well as the recurring royalty. Make certain that the financial parameters are appealing to prospective franchisees while also ensuring that the franchisor receives adequate returns on their investment.
  6. Proper Marketing Planning & Strategy:
    1. Build recognition and interest in your brand by crafting a memorable logo and advertising campaign. In addition to providing franchisees with advertising materials and campaigns, you should also provide marketing support.
  7. Drafting the Franchise Agreement India:
    1. Create a detailed and understandable franchise agreement that specifies each party’s obligations and rights. Conditions pertaining to the territory, length, renewal, and termination should be included.
  8. Preparing an Exit Strategy:
    1. It is important to devise a strategy for dealing with termination of franchise agreements, not renewed or bought out to provide an effortless change for both parties involved.
  9. Ensuring Quality Standards & Preparing Control Measures:
    1. Establish quality control procedures in order to guarantee that the products or services offered by all franchise stores are consistent with one another. Establishing and adhering to brand standards is necessary in order to safeguard the brand’s reputation.
  10. Implementing Technology Solutions:
    1. When it comes to communication, reporting, and management, the franchisor and franchisees should implement technological solutions that make these tasks easier. Technologies such as point-of-sale (POS) systems, inventory management software, and online platforms could fall under this category.

Benefits Of A Franchise Business Strategy in Franchising A Business

Franchising your business is in itself a great way to make your product know across the country. But if you do it more strategically and with the help of franchise business strategy plan, it will help you grow smoothly.

Here are some key benefits.

  1. Rapid Expansion: Faster Growth
    1. Through franchising, the franchisor is able to swiftly develop their business without having to make major financial investments beforehand. The fact that this is the case is especially advantageous in a market as huge and diverse as India, where it may be difficult to reach different regions using only company-owned outlets.
  2. Reduced Financial Obligation:
    1. In most cases, franchisees are responsible for investing their own money to establish and run their franchises. The financial strain that the franchisor is under is alleviated. As a result of this, it enables them to direct resources towards other important parts of the business endeavour.
  3. Competence in the Area:
    1. The majority of franchisees in India have a profound comprehension of the local marketplaces, the behaviour of consumers, and also the cultural subtleties that exist. Franchisors might benefit from the local knowledge of franchisees when expanding into new markets.
  4. Elimination of Risks:
    1. Franchising is a business model that uses many units to spread out financial and operational risk. A certain amount of risk mitigation is provided for the franchisor in the event that a single unit experiences difficulties; this does not necessarily have an effect on the entire organisation.
  5. Build Awareness of Your Brand and Break Into New Markets:
    1. Through franchising, the company is able to build a presence in a number of different places, which contributes to improved brand recognition by that brand. Increased local awareness brought about by the presence of many franchise shops enables the brand to more successfully enter various marketplaces.
  6. New Sources of Income:
    1. Initial franchise fees and continuing royalties are two forms of up-front payment that franchisees make to the franchisor. The franchisor’s financial viability and growth are aided by the creation of additional revenue streams.
  7. Efficiency in Operational Procedures:
    1. As a result of delegating operational duties to franchisees, franchisors are free to concentrate on long-term goals. This includes expanding their brands and developing their businesses’ strategies. The decentralisation of this process may result in increased operational efficiency.
  8. Maintaining Consistency and Scalability:
    1. In addition to ensuring the brand standards are consistent, franchising offers a scalable platform. To guarantee that the brand continues to provide a consistent image throughout all franchise sites, standardised procedures and quality control techniques are utilised.
  9. Highly motivated franchisees:
    1. It is in the best interest of franchisees to ensure that their respective franchises are well-run as well as profitable. The achievement of their goals is inextricably in connect to the achievement of the brand as a whole. The consequence of this drive is for franchisees who are in commitment to their business. Also those who put forth a lot of effort to preserve and improve the reputation of the brand.
  10. Maintaining Consistency and Scalability:
    1. In addition to ensuring that brand standards are consistent, franchising offers a platform that is scalable. To guarantee that the brand continues to provide a consistent image throughout all franchise sites, standard procedures as well as quality control techniques are in use.

Therefore, any franchisor looking to establish a foothold in the Indian market can take advantage of these advantages by meticulously executing a franchise business strategy.

Wondering who can help you prepare your franchise business strategy?

Don’t worry. Reach out to our experts at Sparkleminds, to help us understand your requirements and get you the right guidance in preparing the perfect franchise business strategy for your business expansion in India today.

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Franchise strategy development for your business. Exit strategy was a sweepstake for Havmor.

Written by Sparkleminds

Franchise Strategy Development, Exit strategy, deal

The right time to consider an exit strategy is when your business is developing. The best value for your brand is realized when you start franchising development with exit strategies in mind. There is a significant investor interest in the franchise industry. Beginning from 2010 dozens of mergers and acquisitions franchising transactions have closed and the trend is increasing. Private equity groups have more than 800 billion in cash and strategic buyers have more than 4 trillion to invest. It creates a potential demand driving prices to rise. Small business financing may be problematic at times but the availability of bank financing for large acquisitions enables private equity firms to use leverage while paying high prices for best quality franchisors.

Havmor is an ice cream shop that started in 1994 in Karachi. It moved to Ahmedabad within 3 years following the partition of India. A large number of ice cream shop owners and small entrepreneurs tied up with Havmor as franchisees. It grew to be a prominent brand with more than 40000 outlets across India by 2016. The brand has been growing at a CGAR of 23-25%. It had a turnover of about 250 crores in 2012 and its turnover was about 450 crores during FY 2015-16. In 2016 Havmor had expected its sales to double by 2020. It had aimed to increase its sales to 1000 crores.

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