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Advisory 2010-04-08

Rudiments of setting up a franchise

The concept of franchising offers huge benefits over any other independent business. Nevertheless, the aspirants must follow certain basic guidelines to avail the advantages of franchising. Take a look

By Abha Garyali Sub Editor

Taking up a franchise over an independent business, undoubtedly offers the aspirants with huge benefits. For example, franchisees get to avail the already established brand name, low risk, reasonable investment, high returns and long-term assistance. However, like any other business, franchise business too has its share of hard work, and challenges.  Thus, to assist the aspirants with the fundamentals of franchising, the following guidelines will help you to achieve success:

Qualified franchise attorney: Before stepping into a franchise business, it is a must to take the guidance of the franchise lawyer or attorney. Many franchisees have been fooled by fraudulent cases in franchising also. Therefore, it is wise to spend a few bucks for employing the service of an attorney to safeguard yourself.

Capital requirement: Money is the most important criteria for owing a franchise. Any aspiring franchisee needs to research well about investment needed to set up a particular franchise. This includes the franchise fee, royalties and other hidden charges (if any).  Prospective franchisees also need to contact banks and other finance houses for taking loans. The loan may include the start-up cost as well as the running cost of the franchise. Entrepreneurs have to invest some capital in the beginning to reap profits at the later stages.

Preferred location: An outlet cannot be successful until it is located at the right place. Having a pre-school in high-streets or a restaurant at the back lanes of a small town may not be profitable for either. Therefore, in few cases, the franchisors may also assist their franchisees in the site selection process. Some other things to consider are how much foot fall the area gets regularly? What is the catchment area? Is it in vicinity of any complimentary businesses or directly across from the competition? The answers to these questions should be taken care of before selecting the location.

Training and support: An effective franchisee training programme is an important part of the development of a franchise business. Mostly, all franchisors and their teams provide support and training to the new franchisees. Therefore, as prospective franchisees you need to select the franchisor that would offer support and training. The training is usually done by the training department of the parent company.

Recruitment of staff: The future of any franchise depends on its well-mannered, hardworking, and dedicated staff. Therefore, franchisees need to recruit their staff carefully. Usually franchisors send a few of their well qualified personnel to train the franchisee’s staff.

Vendor selection: Franchisees usually depend on their franchisor to suggest the name of a dependable vendor to maintain the original standard. But to have a vendor in the franchisor’s city would increase the cost of transportation. Therefore, in few cases, franchisees need to contact other vendors also.  Franchisees need to have backup plans if one of the suppliers all of a sudden goes out of business or double its prices. A list of alternates should always be in the file of the franchisee.

Online marketing techniques: Being a part of a franchise system offers tremendous advantages such as, instant brand recognition but still the franchisee has to work hard to achieve success. One must have advertising online by logging on to various social websites and maintaining the website of your outlet as well. Advertising campaigns, public, and media relations efforts, TV and radio commercials, etc. can also be used to promote your outlet and its products and services. Many franchisors have public relations representation, and provide guidance or drive campaigns at the corporate level. Moreover, franchisees can initiate some schemes, and gifts to attract consumers in addition to the schemes of the company to popularise his outlet.

Thus, in order to enjoy the leverages of franchising, the aspirants must make use of these fundamental issues before joining the bandwagon. Keeping the above guidelines in mind, aspiring franchisees are sure to go along way!

Comment
Tajinder Singh Bansi 09, Feb 2010 at 01:00 PM
I recently returned home to Vancouver, Canada from a trip to Punjab, India; and I must say I was amazed. Since my last trip in 2006 I noticed a new McDonald's just outside Kanna and a KFC in Jalandher very close to the McDonalad's there. We visited Pizza Hut in Chandigar and in Jalandher and they were both packed and different times of the day. There is no doubt that these western franchises are doing well and will continue to strive. NRI's had packed the Rangla Punjab and Hawelli on GT Road, but the locals rise above all that and want more!! I am itching to get a piece of the indian marketplace, but don't know where to start.
Raju Mehta 09, Feb 2010 at 10:00 PM
How much space & investnment required ??. are you intrested in Gujarat (Surat city).
Kiran Nagpure 22, Apr 2010 at 02:47 AM
Interested to establish in Ahmedabad/ Please reply
Santhosh 07, Sep 2010 at 02:33 AM
IM Planning to open a store in bangalore otskirts can you tell me the investment req & req essentials to start off pls reply me asap
dheeraj arora 25, Oct 2010 at 01:29 AM
How much space & investnment required ??.or plz open store in sonipat haryana..still here's no one food plaza in his history like ...kfc, dominos , pizza hut , etc..so plz provide me the detail
shikha 03, Nov 2010 at 11:45 PM
i m planning to open some eating joint in jalandhar please let me know about it n how much space & investment is required????please provide me the required details.....
ninad wadkar 09, Jan 2011 at 09:15 PM
hi there i stay in THANE near MUMBAI, & my survery of the fast food is very much high coze the place where i stay there is not a single fast food & me as a family man have to go few km aways from the house. can any one help open a franchise & aslo some finance. thnx ninad
Aditya Murarka 04, Jun 2012 at 10:23 AM
Dear Sir,\r\n\r\nWe are having a showroom space of about 220 Sq Ft with 10 Ft frontage in the Main Business area of Dalhousie facing the Mini Bus Stand, It is Beside the Reliance World which is today the main Business of Kolkata.\r\n\r\nIt is an ideal location for Sales shop, as a large number of people comes to our area .\r\n\r\n
rahul baid 06, Aug 2012 at 07:21 AM
Want to take franchies of any raputed co. In food products plz guide
reema kapoor 24, Sep 2013 at 09:02 AM
I m interested for same....would like to have some details...
mohammad asif 15, Jan 2014 at 11:15 AM
I am interested in this I want to know more for this please contact us
Smita 18, May 2014 at 07:55 AM
hi i have a 1000sq ft area on ground floor in an IT complex ....want to open food nd beverage place ..need suggestions
Neha 24, Apr 2015 at 07:59 AM
Yeah nice... There are lots of globally renowned gyms chain opening their outlets in Noida, UP. Anytime Fitness & Golds Gym are some of them,\\r\\n\\r\\nI\\\\\\\'m used to work-out in Gold\\\\\\\'s Gym sector 127 Noida (www.goldsgymnoida.in) and I prefer it to all the people residing near to it :D \\r\\n
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