What Does the Word Franchising Mean?
In layman’s terms franchising means; an already successful business leases you the products, business systems which includes; brand name, marketing assistance, and various training programs for operating the business. In other words, franchising works by replicating a successful and a proven business model across various locations through a network of aspiring entrepreneurs. The person, who develops the business format known as the franchisor, grants access to his business name, goodwill and business model to another person, known as the franchisee in return for a certain franchising fee. To name a few brands who are using franchising model for brand expansion are; Vishal Mega Mart, Unique Brew Café, US Dollar Store, Exppress Car Wash and lots more.
Setting Up a Franchise Business in India
Whether you are considering expansion of your business by the route of franchising, have already started franchising your business or are an established franchisor, to produce a franchise business plan is an essential.
Franchise business plan will support your ideas; thus, providing a clear idea of the infrastructure requirements. The first analysis that needs to be performed, relates to discuss the best way to franchise your business. It is a very important aspect in the franchise business plan as when analyzing why franchisors fail, it is not because of their product or service was not in demand, but choosing the wrong method to offer the franchise. Time also needs to be taken to look closely at the financials and project the revenue streams for you as a franchisor. It should detail a worthwhile reward for you in return as well as providing your franchise owners with an excellent return on their investment of time, and money. This analysis should also indicate if there is any risk of failure for a franchisee or for the franchisor. In reality it takes time for a franchisor to fully understand everything about creating and operating a successful franchise development program.
Franchising is a team effort. In addition, for any franchisor to succeed, the franchisees must operate profitable individual franchise units over the long term. Moreover, a brand’s success depends on an ongoing partnership between franchisor of the brand and the franchisee.
In other words, franchisees do not own the franchise they buy. They are granted a license that gives them the right to operate and manage their franchise business in India. Today about all the established franchise brands operate through franchise route.