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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Do you know the franchise success story of McDonald’s?

Written by Sparkleminds

McDonald’s is a brand and franchise that’s reached worldwide popularity. Today, the brand is synonymous with burgers, fries, and shakes. Coupled with its iconic logo, anyone can recognize the brand no matter where they are.

Let’s talk about the MC Donald’s franchise success of the brand

In this blog, we’ll discuss the brand’s history, the founder of the brand, some of the business models McDonald’s has used for its franchisees, and its marketing strategies. 

 

A Brief Introduction to the Brand and Franchise

The McDonald’s corporation is a North American fast-food organization. Its best known for its burgers, cheeseburgers, and fries, but the menu also includes other popular items like its Happy Meal, that’s a hit with its younger customers, the Big Mac, the McFlurry, or even its separate breakfast menu.

And in light of changing preferences, McDonald’s has recently introduced fruit and vegetable choices in its meal packages. By bringing in healthier options the brand hopes to inspire healthy-eating choices in its younger customers.  

A History of McDonald’s

McDonald’s was first established in 1940 by brothers Richard and Maurice McDonald in California, United States. Originally a drive-in, the brothers decided to revamp the business in 1948. The new model was designed to produce huge amounts of food at low prices. To achieve this, the brothers limited the menu, only offering a select few items, and developed a high-Speed Service System.

This system allowed them to introduce a self-service counter and eliminate the need for staff. The burgers were made ahead of time and placed under heating lamps which allowed them to charge 15 cents a burger – almost half the price of competing restaurants at the time.

Ray Kroc

Ray Kroc, the former CEO of McDonald’s was originally a salesman who supplied appliances for the restaurant. In 1954, he visited the shop to see how one small store can sell so many milkshakes and realized the potential the brand held.

Kroc became a franchising agent for the brand and launched McDonald’s System Inc., which later came to be known as McDonald’s Corporations. In 1955, he opened the first franchise east of the Mississippi River in Des Plaines, Illinois. And in 1961, he bought out the McDonald’s brothers for $2.7 million.

The Brand’s Mission and Ethos

McDonald’s mission of “Quality, Service, Cleanliness, and Value”, is what has kept the brand in the business. The McDonald’s franchises focus heavily on five fundamentals – people, products, place, price, and promotion. Along with their business strategy “Plan to Win”.

And the McDonald’s business model depends heavily on three core principles – retaining, regaining, and converting. It focuses on retaining old customers, regaining lost trust, and converting casual customers into regular/loyal ones. Additionally, it’s embraced digital advancements and food delivery. The company has always been open to reshaping its customer experience through innovation and human endeavors.

The McDonald’s Franchise System

Kroc soon realized that franchisees were integral to the success of the brand and launched a franchise system. As he once stated, “McDonald’s can’t be successful unless our franchisees are successful.”

He prepared exact standards of how each McDonald’s was supposed to be run from cleaning to food preparation. And to ensure consistency, he created Hamburger University in 1961, to train franchisees.   

He eventually changed the format of the restaurants by adding counter staff to take customer orders and also added a drive-through. An addition that’s become prevalent in almost all fast-food franchises today.  

What Does Owning a McDonald’s Franchise Look Like?

McDonald’s opened its first international outlet in 1967 in Richmond, British Columbia, Canada. And by the early 21st century the brand had over 34,000 outlets across 115 countries worldwide. Growth was so quick that it became the most popular family restaurant, with its affordable food, separate menu options catered towards children, and flavors that appealed to nearly everyone.

With over 60 years in the business, as a franchise, McDonald’s has a proven framework for success. It’s a classic example of a heavily franchised brand. As of 2021, over 56% of its revenue came from franchised restaurants. While the company owns and operates (COCO model) a small percentage of its restaurants, McDonald’s plans to reduce that number to 5%, with a long-term goal to transition towards 95% of its outlets being franchised (FOFO model) restaurants.

In 2021 the company generated over $23 billion in revenues, of which $9.78 billion was from company-owned restaurants and $13 billion from franchised restaurants. And the success of their overseas franchise models has resulted in the term, “McDonaldization”

Developing McDonald’s Marketing Plan

In less than ten years, after Kroc became the sole owner of the franchise, the number of outlets exceeded 1,000. Through its success, the company began trading publicly in 1965.

The first ever McDonald’s mascot was a burger wearing a cooking cap who was alluded to as Speedee. In 1962 the golden arches were introduced and have continued to be the face of the brand, even today. The logo was inspired by the tall yellow arches that dominated earlier McDonald’s rooftops.

And lastly, in 1965, their newest mascot, Ronald McDonald was introduced. However, the growing negative perception of clowns in the 21st century resulted in them sidelining the character.

The most notable addition to the brand was the introduction of the Big Mac to the menu. The iconic hamburger was an instant hit and the company’s top-selling product, after its French fries. These changes helped the brand grow and gain popularity among the masses.

Criticisms Leveled at the Brand

The success of McDonald’s also brought its fair share of criticism of the brand. A lot of this was concerned with the brand’s association with the global increase in obesity. In the early 2000s, various lawsuits and complaints were filed and registered against the company in the United States, alleging that its food caused health problems. The company also received a lot of negative press from the documentary Super-Size Me (2004), in which the filmmaker documented a decline in his health while on a diet of only McDonald’s foods.

In response, the brand started developing vegan options for its menus, like McVegan, P.L.T., and McPlant. And in 2017 the company released its first plant-based burger. In 2018, the company announced that it had stopped using preservatives in most of its burgers and eliminated its super-sized menu options. And its US and Canadian branches stopped using Trans fats in a number of its food items. However, this did little to curb the health concerns regarding the brand.

Additionally, the company also faced a spike in the number of calls to increase employee wages. The term “McJob” was added to Merriam-Webster to mean a low-paying job. Recently, the company has come under fire, similar to other large corporations for its negative impact on the environment, especially concerning greenhouse gas emissions.

In answer to this, the company increased employee wages and launched initiatives to cut down on its carbon footprint. Like launching programs to move towards using recyclable bags, utensils, and other items. And making moves to be increasingly transparent in their production processes.

The Future of McDonald’s

As of 2022, McDonald’s is still a leading franchised brand in the fast food industry. Frankly, there’s little doubt about the company’s ability to attract customers. Even during a bad year, McDonald’s still makes a profit.

As for the future expansion of the brand, McDonald’s has already been taking steps to improve upon its already successful business model. This can be evidenced by the introduction of automated ordering stations in their outlets, digital or contactless payment options, and more plant-based food items in their menu to cater to a more diverse customer base.

They also plan on remodeling their restaurants to cut down on carbon emissions by either replacing their equipment or altering their practices. McDonald’s plans to fully achieve company-wide, net zero emissions by 2030.

In Conclusion

McDonald’s is a great business model for startups or experienced entrepreneurs to read up on if you’re currently looking up references to start your franchise. It’s got a proven working model and over 60 years’ worth of experience in the industry to back it up. All of which can be evidenced by the franchise’s worldwide success.

So what are you waiting for? Take action now! Your business can be the next global franchise successful brand. Start franchising today with sparkle★minds. Connect with us now!

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