Best Franchise consultants in India

 

What are some ways to start a business?

If you are an aspiring entrepreneur looking for business opportunities. This blog is for you. As the pandemic continues to pose a threat to businesses, venturing into an entirely new business can involve considerable risk and can also result in failure of the same. On the contrary, if you buy the franchise of a renowned and successful franchise.

 

 A franchise not only comes with brand goodwill but also provides a set of tried and tested successful strategic plans. The rate of failure involved in opening a franchise is almost negligible when compared to a startup.

Why should you choose a franchise business?

The franchise business is growing at a sumptuous pace in India. The franchise industry has witnessed a growth of around 30-35% over the last four-five years and the overall turnover is estimated at around INR 938 billion. Currently, the sector contributes more than 1.8% to the Indian GDP and is estimated to contribute around 4% by 2022.

 As the fastest-growing economy, the Indian market has tremendous potential for franchising business. With a high percentage of the young population, a franchise model will develop and progress well through shared ownership.

Till the end of 2017, the Indian franchise market was about INR 936 billion which has presented a considerable rise. In India, franchising as a growth and expansion route has exhibited commendable and prolific results across various sectors.

 The franchising business in India was worth INR 848 billion in 2012. In 2017, it reached INR 3,570 billion, growing at a compound annual growth rate (CAGR) of 31% per year. The market is projected to reach INR 10,500 billion by the end of 2022, presenting a growth rate of 24% CAGR.

 The reports suggest that the entrepreneurial spirit of Indians has led many individuals to enter the franchise business. Presently, around 35% of all franchise owners have been first-timers in business. These entrepreneurs choose franchising due to the following reasons:

●     Wide range of benefits it offers such as reduced risk

●     Opportunity to associate themselves with an established brand, training, and support

 

Is it better to buy a franchise or starting a new company?

When it comes to starting a business, there are various assessment factors to determine the right fit

●     Franchise owners benefit from being part of a a larger, successful company that has already paved a strong and successful path that will make it way easy to generate profits.

●     Individuals who believe they can build a better consumer web and want the freedom of entrepreneurship may be better off starting their startup.

Before you choose to venture into either of the two there are a few questions that you need to find an answer to, if you want to make the right choice.

 1.How do you handle risk?

If you are thinking about starting a new business, you should be comfortable with taking up a high degree of risk. However, you should consider the amount of risk you are willing to take on. For entrepreneurs who are more risk-averse, or who are simply looking to lessen their exposure to contingency, franchises are an appealing option. It reduces the risk element of entrepreneurship to a considerable extent, thanks to their established support system and proven business model.

  Do you want to follow a pre-asserted format or do you want to give it a try?

The biggest advantage of the franchising model is that all the fundamental, up-front work has been done  this includes the curation of a marketing plan, formulating staff-related policies, designing logos, deciding on store layout, vetting vendors, and ordering stock. With a proven business model in place and all details established in advance, you will be in a position to start your operations from day one.

  If you are someone who would want to have your input on these aspects of a business and if you get excited about creating a marketing plan, picking your vendors, designing the organization of your store, and deciding on the details of your business — then starting your own company from scratch may be more appealing to you.

 3. How do you handle taking command from other people or organizations?

Owning a franchise gives you autonomy and independence — you are your boss. However, you will have to run your franchise unit in compliance with the predetermined stipulations, which may include sharing your franchise’s financial erudition or spending a specific amount of money on advertising and marketing. All of this has to be done in acquiescence of the franchise agreement

 The best franchise companies also share a great deal of financial information with their franchisees in return. This allows them to benchmark their accomplishments with the rest of the franchise system. This can be a huge advantage for franchisees to help develop their financial performance and business profitability. Keep this in mind as you reflect on which business venture is right for you.

Pros and Cons of a Franchise

A franchise business is the one that allows you to get into business FOR yourself but not BY yourself.

Pros

Instead of having to reinvent the working wheel, a franchisee gets a lot of support from the franchisor, offering a better chance for success. A franchise owner often receives help from the franchisor in strategizing the working of the franchise unit.

●     Site selection for driving optimal traffic with consideration for locations of competitive businesses

●     Design and construction of physical facilities in the store to lure more customers.

●     Financing to cover initial franchise fees plus start-up costs that have to be incurred in setting up and processing the franchise unit.

●     Training program to learn the business to follow the proven operational methods

●     Grand opening programs to jump-start the business and also as an advertising and publicity techniques.

●     National and regional advertising to grow sales and publicize the franchise unit.

●     Routine business operations to maintain best practices for optimal efficiency and to ensure the regular working of the franchise unit.

●     Access to bulk purchasing agreements from approved vendors to hold down the operating expenses.

●     Ongoing supervision and management support to answer any queries and doubts regarding the working procedure.

This structure helps to considerably lower risk, compared with starting your own business from the ground up. It is also instrumental in helping to overcome common obstacles that are faced by many new entrepreneurs who have a lack of business experience and access to capital.

Cons

For some entrepreneurs, it may feel a little heavy-handed and result in a frustrating lack of liberty. Some franchisors exert more control than others. If you are looking for a business in which you can be creative, innovative, and apply your personal touch or set your pricing, make sure the franchisor is willing to give you the desired level of freedom.

 ●     Franchise fee. This is the up-front fee that you are required to pay for the right to become a franchise owner of a specific brand. On average, the franchise fee across all industries was $35,185, but the fees can also be as low as $15,000 for some franchises.

 ●     Start-up and operating expenses. This is the capital cost required to build and supply the physical business, including property, equipment, signage, inventory, promotion, insurance, payments, and more. Franchisees generally require financing to cover these expenses, which can run well into a six figures amount for most industries, and into the millions for others, such as the lodging industry. Some franchisors assist their franchisees with financing.

 ●     Royalty payments. The franchise brand sustains a percentage of the gross sales from every franchise. This is the big ongoing income stream that motivates business owners to consider franchising their brand. Sometimes, there is a separate royalty fee just to help counteract advertising costs. A Royalty fee need not necessarily be a monetary fee, it can also be a part of the sales.Thus, a franchise can be the ideal option for an aspiring entrepreneur who would want to reduce the risk of their businesses at a higher investment cost.

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Franchise Consultants in Mumbai

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Franchising is a form of business that involves two parties, namely, a franchisor and a franchisee. It is classified as a business relation in which the intellectual property, proprietary business knowledge, business model, brand name, and the rights to sell its branded products and services are granted to a franchisee.

In return, the franchisee pays a certain amount of money known as the franchise fees and agrees to comply with certain obligations, typically set out in a franchise agreement. 

It is based on a marketing concept that can be adopted by an organization as a strategy for business expansion. Not only does franchising provide exposure to a brand but it also helps it to improve its relations and gain goodwill. These market relations, goodwill, and a large expanse of the customer base help the franchisor to entice potential franchisees to invest in buying the franchise of their brand

Buying the franchise of a well-established brand proves to be quite propitious for new entrepreneurs because they receive a tried and tested business model. This reduces the risk factor to a large extent. They are also provided with market goodwill, the creation of which is one of the most challenging tasks faced by any emerging business. A franchise business has better growth prospects than any other startup.

 

UNDERSTAND FRANCHISING

A business chooses to franchise its business largely in two contingencies: When a business wants to increase its share in the market and the sector it is a part of or to increase its geographical reach. It may franchise its product and brand name to do so at a comparatively low cost. A franchise is a business entity yielded from the joint venture between a franchisor and a franchisee.

The franchisor is the one who owns the business. It sells the right to use its name, idea, and products or services produced by it. The franchisee buys this right to sell the franchisor's goods or services under an existing business model and use its intellectual property for earning profits. 

Franchises are a popular way for entrepreneurs to start a business, especially when entering a highly competitive industry such as fast food. One big advantage that comes along with purchasing a franchise is, that you have access to an established company's brand name and consumer base. You won't need to spend in acquiring resources that would assist you in getting your name and product out to customers.

BASIC FRANCHISE RULES AND REGULATIONS

Franchise contracts can be easy at some points but it can be quite complex to formulate policies and vary for various franchisors and franchisees. A franchise agreement contract includes several points, some of which are as follows:

•  The franchisee must purchase the controlled rights, trademark, from the franchisor in exchange for an upfront fee. 

•  The franchisor often receives payment for providing training, equipment, or business advisory services. 

• The franchisor receives either ongoing royalties or a percentage of the operation's sales.

A franchise contract is temporary, similar to a lease or rental of a business. It does not mean that the business is owned by the franchisee. Depending on the contract, franchise agreements may last between five and 30 years.

DIFFERENCE BETWEEN A FRANCHISE AND A STARTUP

People often tend to confuse a franchise with a startup. The two are quite distinct. A startup refers to a business that is started and owned by you. You can resort to a startup if you don't wish to work on someone else's business model. But starting your own company is risky, though it offers rewards both in monetary and personal terms. 

When you plan to start your own business, you're on your own. Many questions that hover in your mind remain unanswered. Will my product sell? Will customers like what I have to offer? Will I make enough money to survive?

The failure rate for a new business is higher than that of a franchise. Roughly 20% of startups don't survive the first year of their establishment. About 50% last until year five, while only a small percentage of 30% continue to stay in business after 10 years.

 Only if your business is going to be able to beat the odds, you will be able to reach the zenith of success. To turn your dream into reality, expect to work for long and hard hours without any sort of support or expert training. 

 If this sounds like too big a burden for you to handle, the franchise route may be a wiser choice.

People tend to purchase a franchise because they see the lesser amount of risk involved and availability of higher growth prospects. . Franchises offer entrepreneurs a stable and tested model for running their business successfully. The success in franchising is nearly 85 percent which is way more when compared to the success rate of startups that is only 53%, in 5 years. 

PROS AND CONS OF OWNING A FRANCHISE

There are many advantages of investing in a franchise but it also comes with a few drawbacks. Widely recognized benefits of investing in a franchise include:

•  A ready-made set of business establishment steps that have to be followed. 

• A franchise comes with market-tested products and services and also established brand recognition. 

• You have a set of operational procedures that have been tested and so there is minimum risk.

• Most of the franchisors offer training and assistance in financial planning and also provide a list of approved suppliers.

• Franchises come with a formula and track record so there is a higher chance to be successful.

The only disadvantage that comes with a franchise includes heavy start-up costs as well as ongoing royalty costs that need to be paid to the franchisor.

HOW TO MAKE A FRANCHISE BUSINESS PLAN?

Preparing, presenting, and defending your business plan as a successful one, both in the short and long run, is a real test of your business vision. A business plan lets you define the goals and objectives of your business in a presentable manner. A Business Plan explains what you plan to do, how much money you need to do it with and how you propose to pay the money back. Your plan will include a Profit Forecast and Cash Flow Model. 

1.Introduction

• Describe the purpose of your Business and briefly outline the concept it is based upon.

• Include your overall business objectives and goals.

• Decide on the legal status of your business. Analyze your business model to ascertain which is the right one for your work.

• Describe accurately the product or service that your business will offer to the franchisees for sale. Include any relevant history of the product or service and try to avoid any gibberish.

• List qualities that make your product or service distinct from what others have to offer and describe your 'Unique Selling Point' (USP). List the key feature which makes your product or service stand out in the marketplace.

• Describe how your product or service can be developed in line in case of a market transition.

3.The faculty

You should remember to include details of anyone who will be involved in the success of your business. These people are an asset. This is a key section of your Business Plan that should necessarily be included.

• A short introduction of each person, including the assessment of their attributes, strengths, and weaknesses.

• Their relevant experience, commitment, and reasons for involvement in your new venture and how are they an asset.

4.The market

This is probably the most important section of the whole Plan - It is extremely important to have a clearly defined market plan for your business to succeed. If you can effectively present this section of your business plan, you will gain credibility for the whole Business plan. 

• Describe the current condition of your product or service in the marketplace for your product or service.

• Detail any relevant facts and figures relating to the market sector(s) that you will be targeting, expected growth ratios, and the type of potential customers who will be purchasing your product or service.

• Give details of your competitors in the market and explain why your potential customers will choose your product or service over those being offered by your competition.

This is the point where a lot of research is required. You should make use of all the business information that is available about markets, competitors, and customers.

The marketing plan

A business without a Marketing Plan is incomplete. Your company must have a clearly defined marketing plan that would help in promoting it. It should include:

• Your marketing objectives 

• Where your product or service can be positioned in the marketplace in terms of price, quality, image, and other factors affecting demand.

• What are your planned marketing communication methods- advertising, leaflets, and brochures, etc.

• How will your product or service be distributed sold eg. Through agents, sales teams, digital marketing, etc.

• What customer care policy is planned and how it will work.

Any sector of interest where you have already generated leads or details of any possible orders you have already taken should be included in the appendix. Unless you have a clearly defined market and a potential customer base, you will not be able to successfully work on your business model.

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Franchise proposal sample

 

How to create a franchise business plan:

franchise steps

Franchising is pretty close and invariable to the term business development, growth, and expansion of a pre-existing venture. If you wish to successfully franchise your business, you require a strategic plan and a tried and tested step-by-step procedure that needs to be followed. To formulate a concrete strategy for your business, you should always consult experts who can guide you throughout.

 The goal of a franchise consultant is not solely franchising your business or meeting the legal requirements to sell franchises, but to build a franchise a system that, from the very start, can take the advantage of the very best practices in the franchise industry and is strategically focused on enhancing the strengths of your business, minimizing its weaknesses and establishing a flexible but rock-solid foundation that is designed to create, making it potential enough to scale up and grow your franchise system.

To achieve success in the process of expanding your business, it is necessary that you follow a proper set of procedures and resort to the correct methods of setup. It is essential to build a proper operational strategy that can benefit the business in the long run and lead to the generation of profits from the very beginning. How to franchise your business accurately is a big question that stands ahead of any expansion procedures that need to be followed.

Given below is a list of steps that must be followed by every business to ensure a proportionate working: 

Analyze your business model

It is very important that you make a thorough investigation of your business type and analyze if it is a franchise or not and if it is a franchise one then find out a suitable way to expand it through franchising by using sector. Before we get started on a new project and begin working with a new client, an initial franchise assessment is necessary to determine if franchising is the right fit. 

Assess your business 

As a separate entity, every business has a unique model and operational process, it is important to determine what works best for you as a business wanting to expand its operations in the market. It is important to evaluate your business's strengths, weaknesses, competitive advantages, unique selling points, legal protections, and future development goals. Throughout the franchise launch process, it is crucial to focus on developing a franchise system that best meets your development goals and that will maximize the.

 

 Take up a market competition assessment

To formulate rock-solid and progressive operational strategies, it is important to take up proper market research and get an adequate understanding of the strategies being used by competitive brands and then formulate concrete and escalating strategies for your business and outrun their market success. Getting expert advice can always be considered when it comes to formulating competitive strategies.

Preparation of a franchise blueprint

Establishing and creating a franchise system is a process that evolves in due course of time. It is important to ascertain your goals, business, and brand and once you complete the competitive franchise study, you need to create a blueprint mapping out of the skeletal structure for your franchise system.

 A franchise blueprint should incorporate the following points:

• Franchise fees and investment structure that is competitive and encourages potential multi-unit development in the coming future.
• Royalty fees and establishing fee structure that rewards franchisees for success and is a brand that achieves your growth and development goals
• Multi-Unit opportunities available in the future and whether or not your franchise system will be focused on setting up single-unit franchise opportunities or multi-unit franchise opportunities with development agreements.
• What will be the lease offered to the franchisees and the extent of territory expansion. A clear plan on how to manage franchisee operating territories, and forms of protection that may or may not is granted to franchisees investing in your brand.
• A list of proprietary products and sources of supply which also includes the identification of core products and services that must be purchased from you or your designees and a clear mention of whether or not you may generate additional revenue from your suppliers
• Many other factors, including factors that are specific to your business and the strategic plan for differentiating your franchise system, attracting franchisees, and various policies required that would help in attracting potential franchise broker's interest in promoting your franchise offering.

 Prepare a franchise proposal

A franchise proposal is an essential document that helps you to lure more and more franchisees by helping you to easily and effectively pitch your idea to potential franchisees. It is necessary that your franchise proposal is very precise and it reflects the working procedure of your business and also puts forth a report of the presumable profits that the franchisees can expect to earn on investing in your brand. Your franchise proposal must mention all the benefits including rights to hold intellectual properties, market expanse, and the pre-established customer base that they will receive on taking up your brand's franchise. This will develop the confidence of the franchisees in your brand.

 Development of a franchise agreement

 The franchise agreement is an important part of your franchise disclosure document. It must provide you with the very best policies and protections and must be structured and focused on the strategic growth of your business even if it is a part of a super competitive market.

 Depending on your strategy and planning to meet your goals, your franchise agreement is not a mere agreement for any of the franchises between your business and its unit but a working model for your franchises. Your franchise system must be structured with multiple development opportunities where a franchise may sign a franchise agreement giving them the right to establish one unit or they may be offered a franchise agreement where they are granted the opportunity to establish multiple units of your brand. Your franchise agreement needs to reflect your idea of working with your franchise system and must be designed to facilitate franchise sales for your business. You can always refer to a franchise agreement format when preparing your franchise agreement.

Develop a marketing strategy

 As a franchise owner, you hold the responsibility for marketing your product to consumers and present your franchise as an opportunity to prospective franchisees. Coming up with a solid marketing plan will keep you on track as you grow your brand to a bigger one and also enable you to expand it and develop in the long run.

without proper marketing and awareness of your brand, you would never be able to expand through franchising.

It is always advisable to keep your business models as simple as possible so they're easier for franchisees to understand. Larger franchises often require their members to participate in a common advertising fund. 

 When you are marketing a new franchise concept, the more difficult it gets for a potential franchise partner to grasp and understand the whole business model, the harder it will be to recruit good franchise partners. You will have a much better chance of succeeding at your goal if you as an individual and as an investor can fully understand your franchise model.

Thus, it is important that you assess your business and thereafter stick to strategies specific to your business enterprise that can help in efficiently expanding your business and taking it to great heights.

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