Franchising in India is at a very nascent stage. However, the industry is still growing with an annual growth rate of 30% with a market size of USD 7.2 billion. Amongst all the other advantages of buying a franchise, the most attractive offer that it gives to a prospective franchisee is its proven track record of success and the ease of becoming a business owner.
Due to the slightly higher success rate of franchise-owned businesses, aspiring entrepreneurs choose franchise-based companies and collaborate with them. However, it’s important for every prospective franchisee to consider some do’s and don’ts while buying a franchise.
Some Do’s before You Buy a Franchise
- Conduct Research about the Franchise before Investing: Before investing your precious money, it must be your first and foremost concern to conduct a thorough research about the company. There are different types of franchise and franchisors; not every franchise will be the one for you. Research about the brand and look for something that would be beneficial for you. After doing a thorough research about the brands, pick the one that offers you additional support and resources that you need.
- Take Advantage of the Franchisor’s Resources: Once you choose a brand that suits your requirements and provides you with advantages and additional support, it’s time to take reap the benefits of that support. You can utilise the support that is being provided by the franchise. The proper utilisation of those resources should be one of the top priorities when it comes to being a franchisee. This way, you could bring productivity into the business.
Some Don’ts before Buying a Franchise
- Don’t Fool Your Franchisor in any way: The relationship between a franchisor and a franchisee should be laid on the foundation of truth and loyalty. Both the franchisor and the franchisee work as a team to achieve their respective goals together. So, there should not be any scope for ambiguity of any kind. Franchisors often help the franchisee in setting up the business – majorly financial support. So, in cases where you can afford to invest from your own side, don’t overburden the franchisor and don’t lie to them. It not only violates the relationship of the franchisor and franchisee, but also can ruin your image in the industry, which you cannot afford.
- Don’t Invest Every Penny in Establishing the Business: It’s important to note that a business constantly requires extra money so that it can be used in buying essential things such as inventory. While planning to become a franchisee, it’s essential to save some extra amount for the financial situation, apart from the franchising fees and initial investment.
Also, there is not a fixed time period in which a business might taste the success, so it’s better to keep a backup for the worst case scenario.