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A Guide for Investors on How to Start a Franchise Business in India

The number of people starting their own businesses has dramatically increased in India, and many of them start with a franchise. Increased surplus funds, risk appetite, and financial awareness have all contributed to India’s franchise market’s explosive growth. IBEF claims that during the past few years, the franchise business has outperformed other industries by rising at a pace of around 30%.

Particularly, industries like food & beverages, hospitality, beauty & wellness, fitness, retail, and education & learning have seen this increase. Launching a franchise business has undoubtedly become a top option for aspiring investors and entrepreneurs to obtain business expertise who desire the security of an existing brand and a devoted customer base, greatly lowering several key risk factors connected with starting a firm.

Even while starting a franchise outlet may appear lucrative and simpler than starting a new company from scratch, doing so takes extensive study and an awareness of the process’s complexity.

How to Launch a Franchise in India

  • Understand what you desire
  • Examine the state of local economy
  • Capital requirements
  • Finalizing the franchise brand
  • Conducting interviews
  • Choose your franchise partner
  • Obtain all required licences
  • Hire staff and attend training

The road map for new and experienced investors to launch a franchise business in India is provided below.

Understand what you desire

The first and most important step when deciding to purchase a franchise is to select what kind of business you desire to own and operate. Franchises from a wide range of industries, including beauty & wellness, retail fashion, and automotive, have found success in India. In order to choose which franchise best meets your company’s objectives and has the most chance of succeeding in the local market, it is important to conduct thorough research on all of the options. You may use this overview of some of the top 100 franchise business prospects in India as a jumping off point for your own study.

Examine the state of the local economy

An essential stage in opening your franchise store is gaining a thorough awareness of the current market situation and the shifting trends. It’s critical for a potential franchise owner to speak with operating businesses to have a better understanding of the market’s demands. By doing so, you may determine whether a specific area would be suitable for the franchise kind you have had in mind or the opposite.

Capital requirements

Examine the finance needs of the company thoroughly before you sign a contract with a franchise. Many franchisees demand an upfront payment from the proprietors of the franchise outlets. These funds often consist of operating capital, inventory, startup costs, licencing fees, and franchise financing capital. Understanding these needs and comparing them to your investment budget is crucial.

Finalizing the franchise brand

It’s time to narrow down the franchise brands you believe would be the best match after you have a general notion of the sort of business you desire to own and your budget. Depending on your hobbies, company objectives, and investment level, you have a variety of domestic and foreign franchise choices to pick from. After this list has been determined, it is time to move to the field for in-depth investigation.

Conducting interviews

To begin the process, arrange a meeting with the franchisor either individually or through franchise advisors. Be flexible, enter with a clear idea of what you want, ask questions, and get as much information as you can about the franchisor. Examine their reputation, finances, and current franchise network, and pay close attention to the contract they are presenting to you. It will need patience because this will be a drawn-out procedure that might last for several weeks.

Choose your franchise partner

Make a list of prospective franchisors with whom you would like to collaborate, and request that they send you a workable proposal, the franchise disclosure document, and an outline of the agreement. Before making your choice, compare these bids and consider the advantages and disadvantages of each company. To assist you in the procedure and thoroughly review the documentation, get advice from a lawyer or franchise consultant if you require a third party’s viewpoint and knowledge.

Check to determine if any verbal commitments made by the franchisor have indeed been reflected in the written agreement, if the royalty fee or profit-sharing % may be further negotiated, and if the franchisee receives all of the franchisor’s trademark obligations and legal support.

Sign the franchise agreement with the franchisor if you are pleased with these elements and are prepared to launch your franchise firm.

Obtain all required licences

A franchise outlet can need to secure several industry-specific as well as additional government licences based on the type of franchise brand. Make sure you speak with the franchisor about this as they frequently assist with the acquisition of such permissions. Keep in mind that securing the necessary permissions and renewing them on time are essential to the operation of the firm.

Hire staff and attend training

The last stage before starting your own franchise is to purchase equipment, employ trustworthy staff, and train them for their positions. Typically, the franchisor supports staff training and helps them understand the subtleties of company procedures so they can handle often expected problems. In order to guarantee that your firm launches well, you must also take care of every minor detail up to launch.


5 Points to Keep in Mind Before Opening a Franchise

  • Research is crucial
  • Visit current franchise locations
  • Establish criteria for success
  • Obtain assistance from the franchisor
  • Launch with a bang!

Starting a franchise outlet is far less dangerous than creating your own brand, but it is still a very complicated process that demands attention to detail. If the setup procedure isn’t done correctly, it may hurt your company or possibly cause it to fail.

An owner of a franchise firm benefits from every tiny, precise decision made along the route and also experiences the disappointment of decisions gone wrong.

Therefore, bear the following points in mind while thinking about launching a franchise location:

Research is crucial

Every choice you make should be thoroughly researched and firmly founded on facts and data, from choosing the site to selecting the correct employees and purchasing raw materials. In your entrepreneurial endeavour, choosing the sort of franchise and the site of the franchise outlet will obviously be crucial choices that might equally impact the success or failure of your organisation.

In a similar vein, thorough franchise research is essential. To prevent falling victim you franchise fraud or accepting unfair conditions, be sure to properly research the franchise brand. The number of con artists and fraud victims has expanded along with the popularity of franchises.

Visit current franchise locations

Visit as many franchise locations as you can, talk to the owners, and learn from their successes and mistakes are the greatest ways to obtain real and true information. This will offer you a realistic understanding of the profits and revenues and assist you in correlating the franchisor’s claims. Based on these conversations, make a note of the difficulties currently operating firms have and attempt to avoid making the same mistakes.

Establish criteria for success

For an organisation to thrive, it is essential to have a detailed strategy that measures the actual results, failures, and triumphs of the firm. A franchise owner should make the most of the brand’s reach by consulting other franchise outlets for guidance on setting performance targets as a franchise outlet is only a small portion of a much larger brand. Keep in mind that it is crucial to align these goals with your personal and professional objectives.

Obtain assistance from the franchisor

One of the key benefits of having a franchise outlet is the help provided by the franchisor in the areas of marketing, advertising, legal problems, training, and leveraging the established customer base of the brand. Therefore, be sure that the formal agreement contains all of the commitments the franchisor made with relation to these matters. Make proactive contact with the franchisor, ask for assistance where you believe it is necessary, and ensure that you are making good use of the available resources.

Launch with a bang!

It is vital to grab the local target audience’s attention when the franchise store eventually enters the market. Consequently, a thorough plan is required for the promotion-related store launch. The launch strategy should include strategies for promoting the store locally, such as sending out flyers with initial discounts, inviting bloggers, giving out freebies, etc. In order to get assistance with the creation and implementation of these plans, the franchise owner might turn to the franchisor and other franchise outlets.

According to experts, the Indian franchise market is just in its infancy and has enormous potential. As the market stabilises and grows, it will broaden, take on new enterprises, create jobs, and provide more individuals the opportunity to be their own boss. The expansion of India’s middle class is anticipated to fuel the nation’s economic growth over the coming years, making the franchise sector one of the safest choices to make. If you are considering starting a franchise, fill out our Investor Enquiry Form and we’ll assist you in choosing the ideal franchise partner for your needs.

An engineer by qualification, Gaurav started his career in sales and marketing due to his affinity towards networking with people. After learning the tips and tricks of the trade, he made a fresh start as an entrepreneur in the franchising industry back in early 2018, with a vision to bring order and transparency to an unorganized sector. He founded and spearheaded Frankart Global Private Limited, where he consulted, developed, and scaled more than 120 domestic and international brands all over India ranging from different industries such as food & beverage, beauty & wellness, and FMCG retail to name a few. Post-Covid, in mid-2021, he developed FranDocX, India’s first ready-to-use franchise documentation service portal, for the MSME entrepreneurs who were severely affected by the pandemic, and wanted to avail an affordable franchise solution service. His aim is to regularize ethical business practices in the franchising sector so that a greater number of investors can participate and avail the benefits of a structured franchise framework.

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