How to start a franchise | How to make a franchise for your own organization
Friends, you can see different types of business ideas and unique marketing strategies on our website. And today we are going to tell you about such a business. Today we will tell you how to franchise your business.
When you want to shop or buy something, you will see a brand in different cities or different places in the same city, and it is called franchisee. You may be wondering what is a franchisee? This means that the brand is already an established business. What other people run their business under that brand name, only the location and size of the business are different. It is similar to making a profit by opening a business under the same name with a business license, which is similar in business type, business model, service quality, structure, product.
Taking KFC Company as an example, KFC is an American company that deals in fried chicken and various fast food businesses. And this business is used by another person to open his own branch in a different city or in a different location. Where the investor shares some percentage of the income with the actual owner or company.
The franchisee business model is running successfully in almost all categories at the moment. Such businesses run in many sectors such as –
- Home decorator
- FMCG Products
- Beauty salons
- Fast food shop
There are more sectors like this where the franchisee business is doing well. If we want to know about the business of such companies in India, the franchisee business was around Rs 938 billion in 2012, and it has gone up to around Rs 3570 billion in 2017, and it is estimated that by 2022, the franchisee business will be around Rs 10500 billion. And the compound annual growth rate (CAGR) of all these companies has always been good.
How convenient it is to do franchise business
More than 1000 companies are doing business in the franchisee business model, and the demand is increasing every day. According to a survey, the franchisee business in India is growing at around 50 Billion Dollars per year.
All the people who want to start their own business are showing their interest in this franchisee business. Because in this business category you no longer need your own ID, and you don’t need to open your own company, and there is no hassle of manufacturing or production. In the case of the franchisee business you already choose a brand that all the companies have brought to the forefront of its identity and quality people over the years. People have already bought or consumed those products or services. And this is exactly why your investment is more likely to be profitable.
After knowing the basic things of young franchisee, let’s know about the type of franchisee.
Type of franchises business
The competition for every business model in our world is growing rapidly every day. And creating his own friend identity by opening his own business in the competition is not an easy task. That’s why now people don’t start their own business, they take the franchises of all the companies that have already been established. And these franchise business models usually have three types of business models available –
Business format franchising: In this type of franchise you are given guidelines from a particular brand or company as well as how to do business. And this franchise model is a common model that most businessmen use.
Distribution franchise: This franchise model has an actual company that gives you permission to sell its products, but does not interfere in how you take your business forward or how you run your business. In this case you can only sell products of the company where only you can use the brand, but the company will not see how you do your business.
Product Manufacturing Franchise: In the case of this franchise business model, the company gives you permission to make and sell its products and services, and you have to do that with the brand name and logo of that company. Just like: KFC, McDonalds, pizza hut, etc.
Benefits of starting a franchise
If we want to know about the benefits of the franchisee company, then it is divided into two parts. The first is what the company benefits from it, and the second is how the franchisee will make a profit.
Let’s find out now about the benefits of the company and the franchisor.
Company or franchisor benefit
Benefit of franchise company
If we look at the benefits of the company that is giving the franchise, then the company that gets the investor will invest in that company. And with that the income of that company increases, and in Ershad’s hands the company’s products and services reach other cities and other countries easily.
If we look at this as an example, if you hire someone in your company who is just an employee of your company, he has no interest in your company’s losses and profits. But whoever takes the franchise from your company to do his own business will take his work seriously, cut it becomes like his own business and he has the potential to sink money here.
Benefit of franchise trackers
If you want to take a franchise then the best part is that you have become part of a bigger and better company. The company that is already established, and for this you do not have to spend for branding and marketing separately. In this case, the company itself helps to grow your business and you do not have to look for customers to be an established brand. Stabilize your business during the ups and downs of the market.
Barge These are just some of the benefits discussed, but there are some drawbacks to taking a franchise, where you have to work according to the company’s rules, if you want to change or add to your SMS separately, you have to follow the company’s procedure. . If for some reason your business loses, then the franchise company has nothing to do with it. Clearly this means that you will have to bear the loss.
For example, if you have a franchise of dominos pizza in your area, people in that area are not interested in eating pizza. In that case, it will take a long time to cover the amount you have invested.
Now it is known what you need to do if you want to give your own company franchise to any company.
In this case, first you need to establish your business and create an identity of your company, then change your business page to a successful business model, and if your business revenue or turnover is at a good level then people will want to be associated with your business model. And when your business goes to a big level, many will want to invest in your business. And this way you can change the franchise model of your business.
And if we talk about big Mart franchises, then in India D mart, Vishal Mega Mart, big bazaar, Veg Mart, big Mart, its companies have taken a good position in this sector.
How do all these companies have their own business, where do their products come from, what is their supply chain, what facilities does this company give to its customers, and how reasonable are their products from the normal market. If you research all of these things you can start your own Mart business, and from there you can create franchise models. And all this will be possible only when your company or brand gets a good response in the market. And these words will be applicable in the case of restaurant business. Because people will use your brand name and logo only when you create your band’s identity.
Franchises rules and regulations
Let’s find out about Franchises rules and regulations. If looking at your successful brand and established company, if someone wants to invest in your company, then you can give him a franchise, but before that, the rules that you need to keep in mind are –
In order to give a franchise to someone, you need to fix a franchise fees from your own company. Which you will charge from the investor for using your band’s name.
And if you want to distribute business to someone in your company, you need to inspect that location. Like how the next person will start a business with a franchise from you, how much business there is a possibility to grow in that place. Not all goal goals are anger you can grow your business. Because if there is a loss in business then its effect can have an effect on your brand name.
If someone tells you that he wants to take over the franchise of your company, then you must see if he has a business proposal.
- Does he have the right business plan?
- Does he have legal and valid documents?
After creating the ligand and certificate document you will give him permission to start. This method will always protect you, in which case you will need to make an agreement with the lawyer, which will contain all the rules and regulations regarding this business. So that you can monitor the extent to which the business policy and business standards you have set are being followed.
In addition to the franchise charge, you can charge a portion of the profit from selling your product. For example, if your business has an annual turnover of Rs 10 lakh or Rs 20 lakh, the franchisor will share a fixed percentage with you.
Here are three things to keep in mind when negotiating a franchise:
- Terms and conditions of your company must clearly mention the agreement. Which will be agreed upon by both parties.
- In the case of support and property, you need to be aware of what you are paying the franchisor so that the benefits from it go to both parties.
- And at the same time it should be clearly written about the duties of both the franchise company and the franchisor.
- When many companies distribute franchises, all these companies provide training to the franchisors, such as – administrator training, product training, manufacturing training, marketing training. When signing the agreement, you should clearly state that you are training profile, and there is no charge applicable for training.
- When making an agreement, you need to mention whether the person taking the franchise can sell the franchise if the business is not running well. And if your company wants a fixed cost as a buyer it can get it back.
- And if you are growing with yourself and your brand value in the market is growing then you can distribute your own brand value. Many people are distributing the franchise of that company to the public college through newspapers or advertisement, in order to find the interested investor.
You like our full case study on how to give your mart and restaurant franchisee. Maybe you got the insight that if you are thinking of doing any business then maybe this option is also better for you. Although you must think more deeply about this, because this decision is entirely yours, you need to have the information about it, which we have provided through this post.
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