MAKE ROOM FOR QUERIES

A festive season normally heralds a surfeit of franchised stores of popular brands. Entrepreneurs may see this as a wonderful chance to get into business. But wait! Go through these guidelines before you sign on the dotted line.

Be clear about the actual investment

You must always ask the franchiser the real investment because usually there are a lot of hidden charges that are revealed at a later stage.

Identify your revenue target

Usually most franchisees are in a dilemma about this question and ask the franchiser for which they never get a definite answer. Most franchisees do not make great money in the first few months and secondly, it can differ from country to country and city to city.

Cement a good partnership

In any case, if you are getting franchise rights for a very big brand or if you are holding hands with a developing brand, you must seek to build up a good relationship with your franchiser. For a perfect business setup you both need to be likeminded people.

Find out about financial support

Don’t hesitate to talk about monetary angles. Ask your franchiser if he or she will help you in any way with financial support? As Prashant Kulkarni, founder of India’s first trademark Pani Puri brand, Chatar Patar, comments, “There are a lot of queries by the franchisees and it’s their right to ask. Usually in a food business like ours many other questions are also raised by the franchisee such as about the minimum order quantity. Seasoned investors also want to know if you are the manufacturer of the product, etc. Such questions are necessary for better clarity.”

Bank on marketing and promotion

Always know what kind of marketing and advertising support will be provided by the franchiser at the local level. It is very essential for the growth of the brand when you are starting in a new city. PR campaigns on radio, TV, print and online are equally important.

Chart out the territories

You must always know about where you can open your stores and in which specific areas.

Choose the right location

Ask your franchiser if he or she will help you in finding the right location. Most franchisers generally guide the franchisees since a wrong location will directly affect the goodwill of the brand.

Set aside the franchisee fee

Know the exact amount of the franchise fee from the franchiser. Ask if it can be adjusted a little or not.

Sign up for some training

Who doesn’t need some training to start a new business? Ask your franchiser about the training that you will be provided. Will it be at a local level or will you be sent to the headquarters for a detailed understanding of the brand, etc.

Create an exit strategy

Though it may be too early to ask such questions, you should always be straightforward and ask your franchiser about the possibility of selling off your store in the next 5-10 years. Be clear about whether this is legally allowed and whether there is an exit strategy well defined.

There can be other queries too. It is best to be upfront about them and get all your doubts cleared before you get into a deal. A franchisee must think a step ahead and ask any question that comes to his or her mind. Getting answers to such questions might help the franchisee in the long run and also help to maintain a cordial bond between the franchiser and franchisee.

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