Franchising in India is gaining popularity amongst prospective entrepreneurs. From Business owners who are seeking to diversifications to professionals who want to quit their jobs and take up a franchise business, to students who want to get started with an entrepreneurial venture, all of them are eyeing at several options and franchising seems to be the preferred choice to start a business. “Sky is the limit”, rightly makes sense as far as franchise business opportunities in India are concerned. However, success is not easily achievable, for that, you need to first choose the right franchise business and only then will you start making good money. Lots of time and research needs to be done, when one seeks for the right kind of franchise business. With proper research and guidance and fair bit of luck, you can start getting excited about the possibilities and find the right franchise business. Buying any franchise does not guarantee that you will make money, it only guarantees an upfront investment and at most times, without any guarantees to returns. This is something one needs to understand, no matter what your record of accomplishment seems to be. However, you can increase your chances of finding the right franchise and making money by following these tips:

Choose the One You Believe

For franchising in India to be successful, most experts will tell you that you need to choose the one that you believe in. The one that closely matches your interests and your skill areas is the franchise that you should be looking at. That means you need to analyze your strengths and your weaknesses before you are looking to buy a new franchise. Look into the pros and cons of the particular franchise model that you want to opt for. See if the line of business suits your personality traits and see if you like the way of doing business or not! If you are a peoples person and love marketing and sales, then choose a franchise that will put these skills into use. If you are good at computers, find something that will help you enhance that skill. If you are passionate about food and can put in long hours, then get your hands into a food franchise. If you love kids get a preschool franchise. Hence you can begin with the start point of what you love doing, and then the franchise that you take up will be more like a hobby than a 9-6 job, which you do out of compulsion.

Be Alert of Fad Franchises while you choose your franchise sectors

Fads will come and go. This is something everyone knows. Investing your money in a franchise that will not have a long-term future is foolish and that will only be a failed venture. Franchises could cool off just as quickly, even if they seem hot at present. It is better to stay away from those kinds of franchise business models that can be easily imitated. Additionally, choice of sectors is very critical to ones choice. The biggest of franchise companies have not been able to make a mark in the pharma retailing space in india. In-fact an industry leader world wide, medicine shoppe, had to log out of the country, due to several local factors that govern that industry. Hypermarkets, Cineplex, and other sectors have become the domain of big players, hence, as a franchise it will be very difficult to compete. So beware of fad franchises and opt for a reliable franchise business model in the correct industry segments that have a promising future and can give you your desired growth.

Successful Franchises With A Proven Track Record are the Best Options

It is all about profit and sales while franchising in India. A franchise that has good sales numbers and has a proven track record, then that should be the one to invest in. Why is a McDonalds franchise so popular world over?? Why are the likes of Haldirams Franchise,Titan Franchise, Subway Franchise, Baskin Robbins Franchise, Pizza Hut Franchise, Dominos Franchise, so much in demand??It’s because they have fantastic sales and a good track record. On the other hand, If there are many units up for sales from a certain form of franchise business then that could mean that the company is having problems. It is advisable to stay away from such franchises models. Using franchise brokerage websites or franchise consultants advice to see if other franchise businesses are selling at low prices is one way to check about a franchise.

Big might not always give you the Highest Returns:

While the myth is that a popular established franchise will give you high returns, it actually gives you lesser return on investment, with off-course a higher safety bracket. Hence you may actually look at lesser popular emerging franchise opportunities, which will give you the best locations/geographical preference to begin with and at the same time, give you higher returns on investments. Off course, since there is no proven record, there is always a higher risk element. There are several new franchises bursting out on the scene on a regular basis and you can keep yourself updated, by being on franchise lists and following franchise information.

Complaints related to a Franchise

Looking for complaints is another part of investigating a franchise to buy franchising in India. You may find complaints from current or former franchise owners by checking the internet. To buy that business, this could be information that is important to you. However, one needs to know that you will always find some complaints about a business. You can usually chalk it up to a few disgruntled former owners, if there are only few of them. Hence speaking to a couple of existing franchises and then forming a balanced opinion, will help you understand in advance, as to where you would fall, once you take the franchise.

So, while there are 1000’s of franchise businesses that are available out there, and you come across them through franchise exhibitions, newspaper advertisements, franchise magazine advertisements, franchise portals or through references, it is advisable that you do your research, analyze the business opportunity and choose the one, in which you will be absolutely comfortable. You must set aside at least 6 months of time, before you actually start the franchise, to make an informed decision, after weighing all possible options.

You have done your research and have chosen a franchise business opportunity. You like the business and want to go ahead...but there is a hurdle in between. The company has given you its franchise agreement template and wants you to sign the same and then get started with the business. You have a lengthy document with several clauses/sub clauses and are not sure of what to do. I have tried to make this simple for you and have given you certain standard guidelines of what to do and how companies look at this document and expect the prospective franchisees to respond. At the end of the document, you will also see what characteristically a good franchise agreement contract sample must have. Beyond that, you will understand the importance of the franchise agreement and how it protects you as much as it safe guards the franchisors interests.

One of the most important parts of doing any franchise business is the franchise agreement. Every franchise relationship fructifies with the franchise sign up and hence the marriage with the franchisor and the franchisee is defined by the franchise contract. As an entrepreneur, you have to be extremely careful of what you sign, when you get into this relationship, as the next few years and the course of your life will stay altered forever. Let’s begin understanding this entire process and how you should do this prudently, when you take up a franchise business.

We start with the understanding of what is the definition of a franchise agreement. We’d say that it’s ‘A legal document that clearly states the rights and responsibilities of the franchisor and franchiseeand is subject to a defined geography and a period and conforms to the entire legal requirements of the said location, is commonly known as the franchise agreement. It is always very good to know the entire terms and conditions of any agreement,before you get into a contract with a franchisor. It is always good for a franchisee to know what a franchisor is offering. In the franchise agreementyou will find some guidelines that will act as rules to govern your day to day running of the franchise and your overall functions.To know your rights and obligations, it is advisable to read allclauses in the agreement clearly. You need to ensure that, this agreement will make you run the business smoothly and will not hinder your functions in any way.

All the crucial information concerning the businessshould be contained in a good franchise agreement. The basic information should include the kind of business that is operated under this franchise, the name of the franchisor, the location and the mode used in advertising the franchise and the performance of the franchisor in the past. Before you sign an agreement with any given franchisor,these are some of the basic information you need toknow which is linked with having a plan on how the franchise will operate, and what the future prospects are. In the agreement, the rights of the franchisee and franchisor should also be clearly stipulated. This is a good way of understanding what the franchisors wants you to do and what they would do.

There are some kinds of franchise business model where health risk is involved. If you are looking for such type of business franchise then your health and safety obligation should beclearly mentioned in the particular franchise agreement. It is good to ensure that you make use of an insured franchisor so that in case of emergencies you are well catered for. In case you terminate the terms of agreement, it should also show what the penalty is. When it comes to hiring of employees, an agreement should provide you with a clearly defined operation guideline.

For your own safety, it is good to know each and every aspect of the agreement you get into. It is good to make sure you know the legitimacy and genuineness of the franchisor you want to partner with before you sign an agreement. You need to look for a company that will offer you high quality services to your satisfaction. It is advisable to check on the satisfaction level of past franchisees before you sign such a company.

A new company, which is just beginning to franchise, may have room for recommendations and negotiations on terms of franchise. However, established brands with several franchisees may rarely look at altering their standard franchise template. In fact, they would at the onset give you the franchise agreement sample, and ask you to go through the same, before they engage you more seriously. Most companies though, through their annual franchisee meets and other regular feedbacks from their existing franchisees, make amendments to their franchise contract template. These company’s give you a chance to incorporate new business ideas to make your business a success. Beware of many companies who could be very tricky. They may have hidden terms and conditions. So, it is always advisable to keenly read through all details of the documentsbefore you sign a franchise agreement and engage a proper franchise attorney or experienced franchise consultants who would guide you through the entire process.

Some countries also allows a minimum time period from when the agreement contract template is shared to when it is actually signed. If the does not exist in your country, it is always advisable to take at least 2 weeks’ time and to read, understand and speak to franchise consultants or specialist franchise lawyers and then respond. Never, rush into signing a franchise agreement, just because the franchisor is pressurizing you to do so.

Hence to conclude, we could say:

All good franchise agreements have these things in common:

1) It does not limit the franchise marketing functions and enable recruitment of franchisees instead of scaring them away of several limiting clauses. Hence a good franchise contract will take into account, what franchisees would be wary off signing and ensure that the same is excluded. This means, as a franchisee, you need not worry of any clause that will either harm you or restrict you beyond the functions of the business.

2) It ensures clear demarcations, and provides for future growth and ensures seamless entry and exit, having proper termination and post termination clauses.

3) It provides sufficient provisions and time for rectifications of errors, if any. It is designed to protect the relationship, rather than break it.

4) It restricts the liabilities for the franchisees and franchisors properly and provides for proper coverage through insurance and other damage control measures.

5) Above all enables the company and the franchisee to function, respond and do business freely. Is synchronized properly with the financial, operational and marketing functions of the business.

6) Is absolutely compliant 100% with the local laws of the land and does not contravene in any way with local customs, cultures, sentiments and way of life. Hence you have to be very careful with international franchise agreements, which could have certain clauses that would be correct for one country, but may be irrelevant for yours.

Almost all companies that want to expand into newer geographies or into global markets, generally have a Franchise Model or Business Plan configured to work within that market with large local players, (High Net worth Groups, Large Business Houses, Senior Professionals within an Industry or for that matter investors who are seeking large investments in tested franchise business models) of that country and get access to the markets and immediate penetration. ‘Master Franchise Wanted', is a common message that you will come across while you are on your How to Buy phase and researching several Franchise Lists.

There are several franchises for sale, from across the globe. The more developed American, European and Australian franchise markets have on offer several master franchise opportunities for almost all countries of the world. Franchise Dubai, Franchise in India, Franchise in China is gaining tremendous predominance, as a way of business growth in these countries. In fact, you have franchise specialists in most countries who will guide you with the options that are available for your country as there Franchise broker networks, where these franchise consultants, socialize and exchange franchise information. It is very important to make the right first impression, when you are contacting these master franchise companies, and what these franchise consultants would do is, help you make the right first moves.

In a given area, a Franchise has the obligation and right to open a certain number of sub-franchises within a given period, generally through a pre-agreed master franchise development schedule. The Franchise also has the right to sell unit franchise ownership rights to people or organizations who are looking to become sub-franchisees. As a franchisee, you could be given rights to recruit/appoint other franchisees, which can then open and operate at more locations. These other franchisees are called the sub franchisees or Unit franchisees. Often a Franchise license system works with the appointment of a unit master franchise license with the required Franchise profile approval. Most interested prospects generally go through a Franchise Questionnaire which has several questions linked to their backgrounds and which then goes deep into a verification stage. The Franchise Questions are generally linked to ascertain the ability of the franchisee to execute the Franchise Responsibilities, Role and Functions and to ensure that the Brand gets the right momentum within a prescribed period.

You have to sign a Franchise agreement and complete all other formalities, laid out by the company, to become a franchisee. The Franchise contract will clearly have you pay a Franchise fee to the parent company (franchisor) for this. A franchise fee and ongoing Franchise royalties have to be paid by the sub franchisees and the master licence to the franchisor, which is usually shared between the franchisor and the master franchise. Depending on the nature of master relationship you have entered into, the percentage of profit is shared. The total Franchise cost is generally a calculation of the initial investment and the ongoing investments as per the Franchise development plan. The franchisor clearly outlines their investments in the country and the support system that they will have including the Franchise training, unit master franchise training, Franchise manuals, and other Franchise support systems that they would have in place. Thereafter, they would expect the franchisee to invest in the Franchise system and make headway into the local markets.

If you want to take Franchise of any kind of business model then you should know both the operational and management aspect of that particular kind of business model. Even though you are not from the same industry or you are not proficient in doing the business, the franchisor will train you and have the right support, checks, and balances to ensure that you are functioning in line with what the business warrants you to. It then becomes extremely important, in order to make profit out of your master franchise, that you appoint efficient sub-franchisees under your assigned area/region. Apart from controlling the sub-franchisees, it is your responsibility to educate them and support them in all aspects of running the business successfully.

Normally, the master franchisee receives continuous support and training from the parent company rather than being alone in a business venture. It is the duty of the Franchise to pass on the knowledge to further down the line. You are the bridge between the company and the unit franchises. You need continuous support of your sub-franchisees if you want your Franchise to be a successful venture.

The initial costs are usually a bit higher than investing in a regular franchise, which is one of the drawbacks of entering into master franchising. You need to devote a great deal of extra time and resources in setting the Franchise organization up and running. You need some time to bring this kind of business model on to an auto-run mode. Several Business houses or high net worth individuals take up the Franchise and hire skilled employees to manage the Franchise business while they continue to work at another position or operate another business. Once the network is set, as in most cases, the parent company shares a part of the business profit with its master franchises, so you have the advantage of earning continuous unit master franchise royalty payments from the sub-franchisees. This is one of the many advantages of owning a master franchise.

Before opting for a master franchise, research the possibility thoroughly before investing. Working with a Franchise specialist in your country is a very vital necessity as they will know exactly the entire process and help you properly with the entire negotiations. They will also connect you with the right financial and legal professionals, who will work parallel with you for all documentation, research and feasibility. Ensure to pay visits to several of the master franchise locations to see how they operate. It is better to speak with other franchisee owners to understand how the entire concept works in their countries. It is also important to study the fine print and understand the entire Franchise terms. Generally, understanding the exit parameters and knowing the Franchise termination consequences, are also critical to making the right choice. You have to be very clear, how much you would lose, if the Franchise failed and how will you bring in the exact resources to manage the same. Certain limiting clauses, post termination have to also be studied very carefully, just to ensure that your future is not impacted by the failure or success of the franchise.

As a whole, a good Franchise could make you popular instantly in your country. We have seen that several business groups have driven on Franchise international brands and have gained very good recognition in their country. Additionally, it creates quite a decent income, as master franchising can be a very solid business opportunity expansion strategy. However, in order to get the highest chance for success, it is tegy. However, in order to get the highest chance for success, it isimportant to find the best match for your skills and interests and choose brands and businesses that have a higher chance to succeed. It is not necessary that it some Franchise has been successful in some country, it will be in yours too. So, do your entire Franchise pros and cons with the right amount of research, have adequate resources ready, hire a competent Franchise specialist and get started with your search for a reputed, profitable Franchise business.