Introduction
Anyone thinking about starting a business has to make sure about a dozen factors affecting the business. Namely, the location of the business, the type of business, the current market conditions, what’s trendy, the capital involved, the people hired and the list goes on. This all affects the choice of a business that a person wants to go for. But what if there’s already a business established with the same motive and same type? It would definitely reduce most of the miserable and strenuous hours a businessman fears from. I am talking about the franchise business opportunity in India.
Franchise business opportunity is a type of business that’s followed by Multinational Companies in the world. These companies set up a brand name for themselves and let the other businesses use the same in exchange for a fee. This is a win-win situation since these MNCs needn’t take full responsibility for investment and understand the international business environment. This type of business involves contractual agreement and the newly set up business works in the same way as the parent company does.
Learn more on brand registration guide
Procedure for setting up a franchise business opportunity
- First of all, the Franchisee (local businessman) has to pay a fee to acquire the rights of business, marketing techniques, methods of working, equipment, etc.
Read on Whatsapp promotion
- After buying these rights, the Franchisee also gets access to the trademark of the business including the slogans, brand name, logos, etc. Search trademarks now.
- Not only this but also a specific territory might be given to the Franchisee to sell the products.
- The time period for the contract would be mentioned in the agreement as well.
- Usually, this time period is for 5-10 years but there’s always an option to renew this.
- After the commencement of business, the Franchisee is supposed to pay the royalty to the Franchisor (annually or the case may be)
- A contract would be signed between the parties that would ensure the royalty that is paid to be calculated on the sales done by the business.
Positives of Franchise business opportunity in India
- One of the biggest advantages of starting a franchise business is the less risk involved with the business. Because it is all about starting a business that has already been proven successful. So, there are limited risks involved with ascertaining the future of the business.
- The technology used in the parent company is transferred to the franchises as well. This means, getting hands-on good technology and making products based on standards used and tested already.
- The business should be booming and to ensure these proper marketing methods need to be in place. And in this case, the Franchisor helps the Franchisee in every way possible to set up a good brand name and to make effective selling.
- As said before, the Franchisor will support the Franchisee in every possible way. Even in the context of deciding the correct business location as this would benefit the Franchisee and in turn the Franchisor.
- There would be other Franchisee in the market following the same model and so, by contacting them. So, the Franchisee can make its business easy by learning from already existing Franchisees in the market.
Negatives of Franchise business opportunity in India
- The fee required to buy the franchise rights is mandatory. This cost is very high and it could be a couple of lakhs and could go up to several crores.
Keep reading interesting articles on How to apply for patanjali franchise
- The royalty paid also becomes a necessary fee incurred. This cost could be monthly or yearly in nature and it could be between 5-12% of the total sales which also brings down the profit earned by conducting business.
- Talking about costs, the marketing costs could also be 1-2% of sales.
- Even after acquiring the rights of doing business, the Franchisee must comply with the standards set by the Franchisor. The dress of the employee, the timings of the business, the ingredients needed and many more must be taken care of. This would be beneficial for the Franchisor as you would get the exact taste from the burger eaten from McDonald’s wherever you go.
- If in the future, you wish to sell your franchise, then the buyer must be deemed fit by the Franchisor as you just can’t sell your business to any random person.
Some Low costs Franchise business opportunity in India
After considering the negatives, one may doubt about going for a franchise business opportunity in India. But, before you make up your mind consider some low-cost alternatives to the high-cost options. For this, some sites provide data about the franchise cost and the type of business ranging from food and beverages, beauty and healthcare, fashion, education, automotive and so on.
Read on how to get fssai product approval
Some websites to consider are as follows
When to consider a franchise business opportunity in India?
- When the problems of doing business are many, then a person should consider going for a franchise business in India. The help provided by the franchisor may solve most of your problems.
- The time required and the efforts put into the business might be huge, which might be limited for the person wanting to be a businessman in India. In such a scenario, the franchise option comes to the rescue.
- Even after proper consideration of doing the business properly, there might still be a chance of business failure. So, in such a case, a proven method of conducting business is the key factor that can’t be ignored in the case of franchise business opportunity in India.
What could be the reasons for a startup failure?
Top 5 franchise business opportunities in India
McDonald’s
This is without a doubt the best franchise opportunity in India. With the options of setting up traditional restaurants like building, satellite locations like in the airport, universities, hospitals, etc. and business lease for business establishments, it provides the Franchisee to select the type of establishment according to the budget.
The agreement contract spans about 20 years and in these years it is strictly used for McDonald’s business.
KFC
KFC franchises over 20,000 outlets throughout the world and this alone show the potential of this business. They offer 20 years of the agreement and a managing director is assigned that manages the business throughout the life of the business.
Must read on executive vs non-executive director
Baskin Robbins
This business was incorporated in the year 1946 and it has over 7,000 outlets all over the world. The same rule applies for this as in the cases above, that is, the premises of the business must be used to only sell the products of Baskin Robbins and no other brand.
Kidzee
The kidzee franchise has over 14 years of experience of working in India. This business is spanned all across Asia and the business focusses on educating a child and believes that every kid is special. The fee to acquire the rights is between Rs.12 lakh to 15 lakh and it requires 2,000-3,000 sq ft. of area.
Become a LegalRaasta franchisee now
Pizza Hut
It is a Texas-based business that has over 16,000 franchises all over the globe. It proves Pizza, pasta and many other delicacies to people. The USP of this business is that it is a reliable business opportunity with a strong assistance structure with regard to franchises by assisting it to operate the shops.
Conclusion
In the end, it is important to consider all the factors in making the decision and having a team that supports and keeps the business in the long run.
For further more information regarding International Trademark registration or Trademark search or more, you can go through our website: LegalRaasta. Our experts are available at +91 8750008585 to guide in the best possible way. You can also send your query on Email: contact@legalraasta.com.
5 reasons to register your logo as trademark
How to raise startup capital
Everything about Brand registration