India is a “sizzling” market for franchising. Take a stroll through any Indian metropolis or upcountry market, and the bustling markets will greet you with the best top brands. While the Indian economy has seen many ups and downs in 2019, the franchise industry has had a busy year. Since 2013, franchising in India has grown fourfold and is now valued at USD 50.4 billion. The majority of this expansion can be attributed to professionals, particularly those with an IT background.
The Indian franchising industry is growing at a rate of 30-35% year on year and is expected to reach USD 100 billion by 2024. With over 4,600 active franchisors and nearly 2, 00,000 outlets operated by nearly 1.7 lakh franchisees, India is already the world’s second-largest franchise market after the United States. Multi-unit franchising has increased by more than 36% in the last two years. However, the Indian franchise market is still in its infancy; the industry accounts for roughly 2% of the national GDP (GDP).
Should I Franchise My Business?
This industry is growing rapidly, so let’s answer the question should I franchise my business?
Here are the five try-and-convince signs that it’s time to turn your business into a franchise:
1. Current Resource Restraints
Most businesses choose this option when they lack the time, money, or personnel to expand their current operations. Franchising allows a business to expand without incurring new debt.
Franchisees pay the initial costs of launching the business in new locations, so expanding the current business model costs the franchisor very little.
2. Company Credibility
Companies will also choose to franchise if they have a track record of public approval. When your product is recognized as an industry leader, it’s time to take your brand to the next level.
3. Unique Product or Service
Companies with a sustainable advantage benefit from the franchise model. These are the businesses that offer a unique service or product that isn’t going away anytime soon. They (and their franchisees) can distinguish themselves from their competitors.
4. Replicable Business Model
A company that can succeed in the “next town over” is another ideal franchise. Do these businesses have systems in place to manage services on an immediate basis? Your franchise will thrive if you have procedures in place to quickly teach someone how to operate your business model.
5. Demonstrated Profitability
Franchises that can generate a return on investment of 15-20% are generally regarded as wise investments. These businesses will provide a good return on investment for a franchisee.
How to Make My Business a Franchise
If your business reaches these five criteria, it may be time to consider franchising. You can begin by taking the following steps:
Create Your Franchise Business Plan
The first step for a company that decides to franchise is to develop a franchise business plan. These plans specify how territories will develop and how quickly they should expand.
These plans should also outline the staffing and support services that franchisees will have access to, as well as any fees they will incur along the way.
Larger companies’ franchise business plans typically address more complex issues. These plans will address issues such as antitrust disputes and channel conflicts.
Expansion costs are routinely assessed so that franchisors can adjust their growth strategies.
Draft Your Franchise Agreement
Make sure you have a franchise agreement in place before opening any locations to franchisees. The franchise agreement is a contract between the franchisor and the franchisee that outlines each party’s obligations to the other.
Franchise agreements are never identical. They contain specific information about the particular business in question.
Business territories and how credit requests will be handled are two items that may be negotiated in the franchise agreement.
Develop a Franchise Disclosure Document (FDD)
The franchise disclosure document, or FDD, tells prospective franchisees everything they need to know about your business.
This document is divided into 23 sections, which franchisees should read through before signing. These sections cover a wide range of subjects, from trademarks to dispute resolution.
Identify Your Franchise Fees
Before the franchisor and franchisee sign on the dotted line, franchise fee terms must also be specified.
Typically, the initial franchise fee covers the right to use the company name and product. These fees may also include training or other on-site assistance to help the franchise get up and running.
What Are Your Next Steps?
Now is the time to ensure that your business model meets the “franchisable” criteria listed above for your franchisees to succeed. It’s also a good time to speak with a franchise attorney about drafting your franchise disclosure documents.
If you’re still wondering “should I franchise my business?” you can find more information on our website. Create a solid foundation now so that you (and your franchisees) can expand your empire and watch it thrives for years to come. To know more, contact sparkle★minds today!
I am sure you would be familiar with the term “Franchise Consultancy” but do you know what do they do. Well if you don’t know we can help you understand. A franchise consultancy is a platform where you can expand your business from present location to pan India level. This is where we pitch in and help you cater to the demand of your product/service via “Franchise mode”. Therefore, there are a lot of benefits of franchising your business in India.
Confusing? Well in simple words we help you expand your business via the franchise mode, where, we provide our expertise in building a sustainable franchise model, with pre-defined rules & regulations, procedures, business functionalities, and more. The entrepreneur(franchisee) will only have to abide by the mentioned franchise manual.
What does Franchise Consultancy Include?
There are 4 main points of the consultancy namely:
Strategy Development: At Sparkleminds, we develop a strategy that will help you boost your business multi-folds and start franchising soon. Our experts study a business already existing which is similar to you or we build a prototype with the help or R&D team and study the same.
Franchise your business: Once the study has been conducted, we now plunge into actually developing your franchise model and creating your franchise brand.
Merits and Demerits of franchising: When the franchise model is developed, we help you understand the aspect of franchising and how its pros and cons, based on your business.
Franchise FAQ’s: Developing an FAQ is important as a franchisor will be able to learn what could be the possible flaws in the business and how the brand can overcome these flaws.
Going Global from Local
There are businesses that have established successfully in the country, created a brand and a local market for their business. But, now what? This is the perfect time for a business to now explore international waters and cater to different but a similar product or service demand at a foreign land. At Sparkleminds we are in constant touch with businesses that are unique and have made a market for themselves, we help them build their brand at foreign markets.
Franchising Your Business
A brand needs to understand if his/her business is really capable to expand by giving out franchisees to interested entrepreneurs. There are a few things that need to be kept in mind while looking at franchising your business. Are expansion strategy, legal docs, marketing materials and more. Sparkleminds have has worked with a large number of brands and set up the best franchise model for their business. We serve to new businesses, as well as to established ventures as well.
Stages to Franchise a Business
A franchise is a lucrative form of expansion, but it is not an easy task to do the same. There are a few steps which needs to be looked at while franchising your business, the steps are as follows:
Can your business be replicated?
How good is your business concept?
Are your financials stable?
Is there any other alternative for your business? and more.
Understanding the Legality of Franchising
Franchising a business is not as easy as it looks. There are a lot of legal undertakings to abide by. It is hard to clear local hindrances to a franchise than getting permission from than the national ones.
Once documents submitted, the business is to be presented as a franchise to the authorities. A brand can start franchising when it is completely ready to be franchised. It will take the authorities some time you get back to you with required changes.
Publicize your Franchise
The main reason to franchise business is for the public to know about your distinctive service. It is necessary for the franchisor to make use of advertising platforms and notify the public about your product/services. You can also invite them to take up a franchise of your business in case they wish to start same. There are a lot more benefits of franchising you business.
Time Span required to Franchise your Business
Franchising a business does consume a lot of time. There are a lot of formalities that have to be done before the business can actually start giving out franchises. Franchising has to be done at the right time. Doing this will help you understanf the benefits of franshising your business. This calls for expert advice to understand the best time to franchise your business. Also, understand the procedure and rules to be followed.
It would ideally take you 3-12 months to start franchising after building the perfect franchise development program. At Sparkleminds we can help with cutting down the time to a large extent without compromising with the quality of the service.
Price of Franchising a Venture
“Cost” of starting a franchise is one of the main points, which arises out of any entrepreneur or business owner when thinking of franchising their business. A franchisor should understand that franchising is not as easy as it sounds. There are many intricacies to be followed while building a feasible franchise model to sustain the test of times. The franchise model built should be adaptable as per the changing business dynamics.
Franchising is a good form of expanding any business in the country and overseas. But it is equally tough to build a sustainable, precise franchise model for the same. Brands that are looking at franchising have to do a thorough study on if they can really franchise and do, they have all the required resources to start franchising.
The cost of franchising would ideally cost you in thousands in the initial stage and go up a few lakhs for a full-fledged franchise service. A few of the inclusive of a franchise program include – general manuals, training manuals, marketing services, franchise recruitments etc.
Where and How to Start Franchising?
It is important to know where and how to start franchising. A business owner should once pay a visit to franchise consultants and have detailed discussion. Doing this will help them understand the right way to start franchising and what would be the right location to a franchise. Franchisors should visit Sparkleminds and fill in their franchise expansion form and also take up their franchise quiz, by doing this they will be able to understand better if their brand is ready to franchise or they will have to work towards it for a longer period.
Franchising your Business Concepts
An established entrepreneur often wishes to expand his/her business, either by setting it on their own or by providing franchise. While taking the franchise route the franchisor comes across a lot of doubts. A few of them could be, how good is my idea, what if someone copies it before I start, will franchising my idea work? Etc.
At this juncture, Sparkleminds will be of your help. We previously have had a lot of client meetings where they have discussed potential ideas with us and we have helped them understand if they are franchisable or it needs more work. If your business franchisable.
It is suggested to start franchising if your business sync with the below mentioned points:
Unique: Is your business different and unique enough to expand domestically and internationally as well.
Profitability: Is it different enough to rake in enough profits to keep the franchise alive and running.
Systematized: There has to be a systematic line of a function of the brand, so as to include it in a manual, which could be issued as and when you expand.
Training: The training should be easy and perfect enough for the duties they will be undertaking.
Excellent Margin: The brand should generate enough margins to keep the brand exciting and remembered.
Affordable: The franchise should not be expensive, due to the fact being if it is expensive only a few would be able to afford it. This will reduce your count on a number of franchises owned. India is a price sensitive market and having a franchise of more than 50Lakh may not have many takers. Ideally, a franchise should range from 5 – 50 Lakh ₹. There is a high number of entrepreneurs who can invest in franchises in this limit, which will, in turn, make your brand popular and worth exploring franchises in any location.
Franchise Your Big Business in India
Your brand should start franchising when it has a great market, set business model, customer base and brand popularity. The best way to understand if your business is franchise-able is to visit franchise consultants in India. Having a detailed discussion with them will give you insights into your brand can be franchised.
Alternatively, if you wish to do a self-assessment of your brand with respect to franchising, you can take up a franchise quiz of Sparkleminds. At the end of the quiz, you will receive a score and this will give you insights on if your business is franchise ready. If the score is positive then the team of experts at Sparkleminds will have a workshop done with you to understand your business. The workshop will include developing franchise module, administrative guidelines, marketing strategies and more.
Edifice a Franchise Brand
Franchising is not as easy as it sounds, it takes a lot of brainstorming and hours of discussion to come to conclusions. There are a lot of things that go into building a franchise. There are a lot of brands that have used the franchise mode of expansion but were not able to stand the test of times. This could be due to not having a good franchise model, marketing was not in place and could be many more.
A few points to note, while looking at expanding via franchise are:
Does your venture have a set business model?
Is your business generating good profits?
Do you have a set/established customer base?
Do you have the required financials to expand? And more.
There are a lot more intricacies to make note of while franchising your business. To understand all this, it calls for expert advice. Sparkleminds is the most sort after franchise consultants in the country you will be interested to visit.
With experts at Sparkleminds, we will help your business grow exponentially to greater heights by means of a franchise. We will help you build a feasible franchise model, marketing strategy, financials, legal documentation and more. We will also help you understand how you can build a franchise brand to fund its own franchising growth.
With the help of our experts, we can help you comprehend how much does it cost to franchise your business or what it takes on how to start a franchise business. It is a hard task to answer should I franchise my business? we at Sparkleminds can help with this.
Visit us and we will be delighted to serve you with the best of our services for your growth!
