Franchise opportunities in India: A brief guide
Know why you should opt for a franchise in India
If you are an aspiring entrepreneur and you do not want to start a business from scratch, then franchise ownership could be the ideal choice for you. You may be intimidated by the idea of laying down the foundations of your business, but acquiring an already established business may make the process easier for you.
This is how franchises run: a franchisee pays an initial fee and continuous royalties to the franchisor. The franchisee, in turn, gets to use the trademark of the main business, and function within the existing system of the way business is carried out, and sell the products and services of the same.
Why opt for a franchise?
This gives the franchisee the banner of a well-known brand and the existing system in which business can be conducted. Needless to say, the franchisee also reaps all the advantages that come with it.
One of these includes the fact that by becoming a franchisee, an entrepreneur can avoid all the pitfalls of starting up a new business with no previous experience. For instance, you will not have to learn through trial and error, and thorough market research will already have been done, and all the groundwork laid out beforehand.
Next up, you get a clear picture of the competition and the differentiators you must adopt from the franchisor.
Moreover, the economics of scale really works out in your favour in terms of buying materials and supplies, services like advertising, and negotiating for lease terms and an appropriate geographical location.
Independent entrepreneurs have to operate on their own, often getting the raw end of a negotiation. There is of course, safety in numbers, which is offered by the comprehensive support system that a franchise offers. In India, for instance, there are plenty of suppliers who won’t sell to a small startup or reject your request because the size of the investment is not sufficiently large in their view.
What is offered to you as a “business opportunity”, may be hard to define. It is a much looser term than a venture that follows the franchise model. When you take up a business opportunity, you will be able to name the business as your own concern, and it will, most probably, work out to be much less expensive, as there are no ongoing royalties to pay at regular intervals. However, you must keep in mind that there will not be a constant support structure for you to fall back on, as a part of the buyer-seller relationship. You will be left to your own devices to cope.
Is it failsafe?
For the franchise owner and a new entrepreneur, the risk of the business failing is not an utterly rational concern. Going under an established trademark shift the onus away from the franchise owner to a great extent in terms of the bearing losses and other costs. The running of a franchise well, on the hand, will, in all probability, give you the confidence and requisite experience to undertake a business or two of your own. The standardised products and processes are a most significant factor contributing to the ease with which this model works.
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