Franchising Fundamentals and Current Best Opportunities
Franchising means you get the right from a company or brand to use the existing business strategy and products.
- Franchise business assures a low-risk and less investment business venture. However, understanding regulations and factors making a franchise profitable are necessary.
- Franchise business costs vary depending on the type of franchise you want to take. It can be in the higher or lower range. Taco Bell franchise requires Rs. 3 Crore while Tea Time provides tea franchise business within Rs. 5 Lakhs.
Starting the entrepreneurial journey with a fully-owned business venture is the dream for many. The thought of seeing your business ideas turning into reality itself gives an adrenaline rush. We get you. Franchising hardly comes into the picture and it usually is a second option for entrepreneurs. However, the Franchise Business has its share of benefits. With a franchise business, you do not have to break your head to build a business strategy from scratch. You straightaway jump into the business venture with a proven business model and market reputation of the existing brand.
A franchise enables you to understand the nitty-gritty of the business. Many franchisees excel in their business expertise with franchise business. Some use the knowledge to start their businesses while others become better franchisees and further expand the franchise business. For instance, many people who took the Tea Time unit franchise became master franchisees responsible for managing the business district-wise. Several franchisees became principal franchisees managing the franchise business statewide.
High profit with low risk makes the franchise business an appealing business venture. Assistance from franchisors is another reason to go for a franchise business.
Franchising, what is it?
A company or brand selling its products and business model to another organization or business individual creates a franchise. The company giving the franchise is called the franchisor and the person/company at the receiving end is known as the franchisee. Simply put, a franchise business means you possess the business rights of a brand to initiate your business venture. Franchises give you a ready-made marketing strategy, a tested business plan, and a brand name.
The purchase cost of a varies depending on the type of business and brand you consider taking. In India, franchise costs can go up and down greatly, and options galore are present. If you have the financial back and confidence you can invest in a high-end brand. If you want to start something simple within a budget you can look for businesses easy to establish. For instance, starting a tea franchise business is easy and ensures less investment with high profit. With Tea Time you can easily start a tea franchise business anywhere in India.
Costs to purchase a franchise
- Corporate fee
- Inceptive franchise fee
- Accounting fee
- The fee for a financing application
- Taxes and permits
- Attorney’s fee
- Cost to run and manage the franchise
The franchise management fee includes relevant equipment, inventory, marketing, and running payroll. Tea Time provides all equipment, resources, and assistance necessary to kickstart the tea franchise business with less investment cost.
Understand Franchise Regulations
Go through the franchise regulations, because come on it is important! Understanding the norms and rules make it easy to comprehend the franchise business procedures. FTC (Federal Trade Commission) and FDD (Federal Disclosure Document) are necessary for the franchise business and the franchisor needs to provide them.
India does not possess a specific franchise law. Instead, many other laws define the legal guidelines of the franchise business. The Finance Act of 1999 indirectly defines the franchise norm. The 1999 agreement states that the franchisee possesses the right to manufacture and sell goods, products, and services and work with the franchisor.
Parties engaged in a franchise agreement have to be aware of income tax and the applicable GST. In India, certain laws form the basis of franchise sales and purchases.
- FEMA or the Foreign Exchange Management Act, 1999
- The Competition Act, 2002
- The Indian Contract Act, of 1972
- The Copyright Act, of 1957
- The Trademarks Act, 1999
- The Patents Act, 1970
- The Income Tax Act, 2000
- The Design Act, 2000
- The Information Technology Act, of 1963
- The Conciliation and Arbitration Act, 1996
- The Specific Relief Act, of 1963
Comprehending the laws might be overwhelming at first but with time remembering these will be a piece of cake. Tea Time attempts to make business easy for you, hence the company takes the responsibility to deal with the major legal norms necessary to maintain its supply chain, warehouse, farmers, and employees along with the government.
Lookout for these when selecting a franchise
Nowadays many brands, both domestic and foreign provide franchise business opportunities. So, options are multiple. However, assessing and understanding what franchise business would be preferable and suitable for you is equally important. A list of important factors is given to help you in the journey of finding ‘The One’.
- Startup Investment
A franchise business is beneficial but you cannot overlook the cost of initiation. You have to pay a certain amount of pay as a franchise fee to the franchisor to set up the business and sell the services with the brand name.
Following the proposal of a location, the company will provide you with information like royalties, business scopes, and the business model. After the discussion, you will proceed with the franchise contract and the work.
- The extent of Business autonomy
The franchise has its appeal of branding and existing reputation but understands your authority over the business. For instance, some businesses are unwilling to allow business expansion in certain directions and some encourage you to take the lead with minimal interference. Tea Time motivates its franchisees to grow their businesses. Many franchisees have become master franchisees after gaining adequate business experience.
- Business Model, Sustainable or Not
Having a sustainable business model aces a brand’s reputation and goodwill. Therefore, ensure that the business you are partnering with focuses on sustainability. Tea Time, for example, has launched the initiative of 100% sustainable biodegradable teacups to reduce its carbon footprint.
- Strength of the Business’s Market Presence
Understanding the brand’s presence in the market is crucial to ensure the scope of high profit with less risk. For instance, Tea Time is the largest tea shop chain in India with 3000+ outlets across the country. The company is growing further.
Consider the competition of the brand. Competition might not be a negative thing, it can also mean that the service or product is in demand. The only point is, high competition means you have to give more effort to differentiate and set your business apart from the competitors. Ps. Know your strength and focus on your USP (unique selling point).
- Organization Culture
Company culture helps to understand the management that influences business operations. It also helps to know the company’s willingness to assist and communicate with you when you are in a business relationship.
- Your Interest Matters
Your interest and passion to do business and making it stand strong matters. Your level of interest to invest time, and energy along with finance has the potential to turn around the fortune of your business. Know where your interest truly lies and choose your franchise business accordingly.
Franchise business has several benefits:
- You gain experience and develop expertise in the business.
- You get the brand name of the franchise business, you do not need to work on building a business’s brand name from scratch.
- You can do business without the need to engage in the guesswork to initiate a company
- Becoming part of a reputed brand name contributes to your business growth
Other Benefits Include:
- Facilities like discounts and training
- Business strategy with a proven success rate
- Easy availability of business loans and monetary assistance
- Less hassle related to banking institutions
Opportunities for Franchise Business
Every industry possesses a list of successful brands and business practices. A list of franchise business opportunities is given below based on research.
- Tea shop
Tea is love and emotion both worldwide and in the Indian market. Many start and end their days with tea and so the demand continues to persist. The tea business is thus a profitable franchise business. Tea Time, the largest tea chain in India gives franchise business with less investment and ensures high profit.
- Hair Salons
Hair care is a constant need for people irrespective of gender and age. Lakme, Jawed Habib, and Beauty Salon offer good returns.
- Online Education
Today’s world is digital and hence online education has become a major trend. Wowkids, Henry Harvin offers franchise business across India.
With concepts like ‘diet’ and ‘healthy living’ becoming popular more than ever, the rise of fitness has increased noticeably. Many fitness brands have started offering franchise businesses like Cultfit and Gritfit.
Love for pizza is everlasting. Brands have realized and thus utilize the option to conduct business expansion. Domino’s and Pizza Hut are some of the companies that provide franchise business.
- Cleaning services
Busy life prompts many to take help from commercial cleaning services. For entrepreneurs, a cleaning service is a good option to venture. You can work with medical facilities, businesses, schools, and so on. Jan Pro is a good pick in this case. Easy Talk Clean and Presto are good options for cleaning service franchises.
- Property management
The demand for rental properties has increased, especially in urban areas. People shifting from one place to another due to work, education, health treatment, and more look for rented flats, hostels, and so on. Real Property Management and ReGrob offer franchise businesses across India.
- Beauty and spa services
Beauty and spas are services that attract people in the name of self-love and pampering. The demand for the services has increased considerably both in urban and semi-urban areas. It has encouraged brands to grow with the business franchise module.
My name, Sharmistha Jatua. I have been a content writer for 6+ years. Currently, I am the writer of Tea Time. Previously I worked in Write Ignite Pvt. Ltd and Elite Research and Analysis as a content writer. Academic, blogging and SEO writing are my fields of experience. Long or short forms of writing, I enjoy both. My passion is to find creativity from everyday life.
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