How to set up your Franchise business in India

It is not always necessary that you get a super innovative idea to start your own business. You may find an existing successful business which excites you and you are passionate about pursuing it, You can by all means go ahead and buy a Franchise of that company and setup your own business.

What is Franchise

Franchising is the practice of using another firm’s successful business model. and is a right granted to an individual or group to market a company’s goods or services within a certain territory or location.  In simple terms it mean that an already successful business leases you the  products, business systems, could include a brand, and various methodologies of operating the business. And essentially they lease that business model with all of or some portion of those components to you. So that’s what a franchise is.Some famous examples of today’s popular franchises are McDonald’s, cafe coffe day, Subway etc.

How to setup Franchise

Though you are getting a ready and working business model, that doesn’t make your work any less, as ultimately it will be you who will be running the show and you who will be responsible to make it a success. The key thing that you want to make sure that when you do any franchise is that number one, you talk to other franchisees within the franchise, so that you know in their experience what it’s like to be part of that franchise system.

Find the Franchisor

This is the first and very crucial step as finding a good franchisor will ensure your success and and will save you from lot of other hassles too. First select the industry you want to be in, and then start finding the best companies with good and reasonable franchise agreements. There are thousands of small and medium businesses to offering franchise and you can fins many more online yourself. ex: franchiseindia

Agreement

Agreements typically last from five to thirty years, with premature cancellations or terminations of most contracts bearing serious consequences for franchisees. And a franchising license lasts for a fixed period and requires time to time renewals. You can also have the right to specific territory or geographical area surrounding your shop area.

There are two types of franchise – the licensing of a brand and the licensing of a business model.

There are some kind of payments to be made to the Franchisors,

• Initial fee, Service fee,
• Management fee,
• Royalty for the trademark R
• Reimbursement for the training and advisory services given to the you and your team.

Law on Franchising

Franchise agreements are covered under two standard commercial laws: the Contract Act 1872 and the Specific Relief Act 1963, which provide for both specific enforcement of covenants in a contract and remedies in the form of damages for breach of contract. Make sure to read the fine term and conditions mentions on the agreement before signing it.

Business licences

In your own business you own the Brand, trademarks, service marks, trade names or service symbols but in a franchise, the franchisor owns all of the above, except for the individual businesses, which are owned by individuals who are given permission to sell trademarked products. That means you own the business and with that comes all the regular registrations that you have to carry out in any other normal business.

Types of business registrations depend on the legal structure you want to follow or the type of business entity you choose, i.e., sole Proprietor  LLP, LLC, or private limited company etc. check all the options for forming legal business entity  and 4 simple step to get your registration done .

Other than that there are some other business licenses you are supposed to take based on some other conditions Some of which include, VAT registrations, Shop and establishment registrations, current bank account, and other business licences for your business

Management

Though all the business operations training is given by the franchisor, the success of your store is completely up to to you and your dedication and hard work.  Making sure everything happens on time and in correct way is in your hand. Though you are not allowed to put in your own creativity and innovation, you can handle the team that is working for you in your own unique way and create synergy and a winning team. For this you will have to do talent management (talent management software  Cornerstone Deutschland) and increase the performance of your employees through proper training and management.