Ever wonder why there are so many international companies in the Indian market? The answer is a franchise business. It is one of the key channels for multinational firms and brands to acquire traction in the Indian market.
A franchise business is a business concept in which one person or organization (the franchisor) allows another person or company (the franchisee) the right to use their business name, products, and services in exchange for a fee and continuing royalties.
The revenues from owning and selling a franchise benefit both the franchisor and the franchisee. Once the franchisee has access to the brand’s loyal customer base, creative help, legal guidance, and training support, the franchisor can expand the business into unexplored markets, increasing market share and revenue.
Franchisee Benefits:-
Operating a franchise may be a good work for an entrepreneur with no direct expertise in business management because:-
- Opening a franchise can be less expensive than establishing a business from scratch.
- The company already has strong brand awareness, a well-established supply structure, and a competent marketing strategy in place.
- Rather of developing their own business practices, franchisees accept their franchisors.
- The franchisor is committed to the success of its franchisees and will provide active advisory support.
Franchisee Advantages:-
· Business assistance:-
One of the advantages of franchising for franchisees is the business assistance provided by the franchisor. Depending on the terms of the franchise agreement and the structure of the organization, the franchisee may obtain a turnkey business operation. They may be given the brand, equipment, materials, and advertising strategy—basically all they need to run the firm.
· Brand recognition:-
Brand awareness is an important benefit that franchisees obtain when they launch a franchise. Starting a business from scratch requires you to create your brand and customer base from the ground up, which will take time.
· Lower failure rate:-
Franchises, on average, have a lower failure rate than single-person firms. When a franchisee purchases a franchise, they are joining a strong brand as well as a network that will provide them with assistance and advice, reducing the likelihood of them going out of business. Furthermore, franchisees have already validated their business concept, giving you confidence that the products or services you’ll be providing are in demand.
· Profits:-
In general, franchises generate more earnings than independently created firms. The majority of franchisees have well-known brands that attract large numbers of customers. This popularity leads to bigger revenues. Even franchises that need a significant initial investment for the franchise fee yield a great return on investment.
· Lower risk:-
Starting a business is risky. This is true whether a business owner is starting their own business or buys a franchise. However, the risk of opening a franchise is reduced. The franchise network is one of the reasons why franchisees bear less risk than independent business owners. Most franchises are owned by established organizations that have tested and proven the franchise’s economic model across several markets.
· Built-in customer base:-
Finding consumers is one of the most difficult aspects of starting a new business. Franchises, on the other hand, offer rapid brand awareness and a dedicated consumer base. Even if you’re building a franchise’s first location in a small town, chances are that potential customers are already familiar with the brand from watching TV advertising or visiting nearby cities.
· Be your own boss:-
One of the most significant advantages of having a business is being your own boss. Starting a franchise business allows you to be your own boss while still benefiting from the franchise’s knowledge base. Owning a business is difficult work, but when you are your own boss, you can choose your own schedule, have control over your career, and perhaps work from home. A franchise allows you to be your own boss while avoiding the risk of launching your own independent firm.
Ready to start top Most profitable franchise
- Stock broking franchisee Investment Required: Approximately Rs 25000
- Patanjali | Investment Required: Approximately Rs 50,000
- Momomia Food | Investment Required: Approximately Rs 2 lakh to Rs 3 lakh
- Amul Ice Cream | Investment Required: Approximately Rs 5 Lakhs
- Cafe Coffee Day | Investment Required: Approximately Rs 10 Lakhs
These are most profitable franchise you can start franchise business but in my point of view stock broking franchisee is most profitable because it required minimum investment,and there is no need to more space and employees and more expenses.
How Does Franchisee Work?
Franchising is a marketing approach that is currently widely employed for business expansion. When a company with a proven business model wishes to expand its operations by expanding its share of a specific market, it may consider creating a franchise for its products or services.
A franchise is a joint venture between a corporation looking to extend its operations (franchisor) and another party (franchisee) who wants to profit from the franchisor’s brand name, steady operations, and working business strategy. As a result, the franchisee does not have to start a new business or invest in branding and promotion.
In essence, a franchisee works like a dealer. In exchange, the franchisor receives a commission or a one-time fee known as a lump-sum contribution. During the dealership, the franchisee distributes a set percentage of revenue (gross income) with the franchisor, as defined in the contract. The fee is known as a royalty or license fee.
Franchisee Agreement:-
The franchise agreement is a written legal document between the franchisor and the franchisee. The franchise agreement is the essential document that governs the franchisor-franchisee relationship. The agreement must be signed by both the franchisor and the franchisee. The following are some of the primary issues mentioned in a franchise agreement:-
- Information regarding the franchisor and franchisee.
- Appointment of franchisees and awarding of licenses
- Location of the franchisee
- Maintenance of the franchisee location.
- Franchisees can utilize proprietary marks or trademarks.
- Licenses or licenses that the franchisee must get or may utilize from the franchisor
- Operating standards
- Quality standards.
- The franchisor may provide training and help.
- Franchisee license fees, if any
- Marketing support from the franchisor, if any.
- Products or services that franchisees can offer
- Franchisee obligations
- Franchisor obligations
- Terms of the franchise agreement
- Tenure of the franchise agreement
- Renewal of the franchise agreement
- Termination of the franchise agreement
Conclusion:-
As per discussion on the franchisee business you can find a better opportunity according to your interest and investment, so consider the above points to get a good franchisee which support and give you revenue. According to the article the best suggestion for franchisee is stock market franchisee as it is durable and budget friendly with refundable options available if not get success with less investment on infrastructure. So consider this as a good franchisee startup.
