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Feb, 01 2009

No short cuts

Whilst my own experience in franchising, initially as a franchisee, then as a franchisor, now as an advisor to businesses that either want to, or already, franchise their systems domestically or internationally, goes back to 1976, let me start by congratu

So, what has changed in the world of franchising in those ten years? The greatest change must be the phenomenal growth of franchising as a method of doing business, not just in India, but around the world. It is said that franchising now works as a method of doing business in some 140 countries – some of which are almost entirely dependent on systems which come to them from overseas, others of which have predominately home-grown systems. There can be little doubt that, done properly, franchising is about the best method for growing a branch network, either domestically or internationally; and it is also the best, and safest, way for an inexperienced person to get into business on their own account.

What hasn`t changed, and indeed what hasn`t changed since I bought my first franchise more than 30 years ago, are the basic principles for successful franchised operations. There are no short cuts – there is no such thing as `overnight success` either for franchisors or franchisees. A successful franchised network starts with a proven business format, ideally one which has at least three profitable company-owned outlets, before it starts to consider franchising – and that applies to local master franchises from overseas franchisors, as well as, indigenous systems.

Starting from there and using experienced advisors to help to structure the franchise, prepare the financial forecasts for both franchisors and franchisees, document the business systems in the form of a franchise operations manual, brief the lawyers to draft the franchise agreement and install the necessary recruitment, training and ongoing management processes, any business which operates as a branch network has a great chance of developing a successful network.

Those that attempt to get into franchising without taking experienced advice are heading for a fall - and potential franchisees should avoid them like the plague.

Good franchising practice will ensure that India becomes one of the leading franchise markets in the world. Linking the experience of good practice from around the world with the natural entrepreneurial spirit of the Indian businessman will produce phenomenal opportunities. No doubt Franchising World will continue to write about those opportunities and I look forward to taking my part in helping with future growth.

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