In laymen terms, franchise is a licence or a legal permission to carry off a business or a brand name, with your own resources and investment. It is a technical business, as the products and services to be offered are given by the franchise, and you cannot add your own without the franchise owner’s permission or the company’s permission. But it has a lot of benefits to the business because then you do not need to start from scratch, and the brand name is already popular enough to attract customers on its first day itself. You just need your expertise, managing skills and investment to be put into it, and the rest is taken care of itself. There has to be some loyalty fees paid to the company every month or every year, depending upon their terms, for using their name in your business. Now, to get started with a franchise business, you need to keep in mind a few tips and tricks that can boom your business like a rocket, from the first month itself. Before opening a franchise, or getting one you should read out these tips.
1. Type of Franchise
There are different kinds of franchise, the one with food products are more working than others because, everyday work is carried on according to the company terms only. you do not have to change anything in there, not even the menu. The products, raw materials are given by franchisor itself, all you need to do is hire workers to convert them into products and serve it to the customers. here much precaution and safety and hygiene considerations are taken into account, which needs proper management.
If you are new in the business, then you may avoid taking such franchise as it will need a lot of experience and management skills to carry it out. On the other hand, franchise for other products such as clothes, accessories, cars are not that tricky. The work done there is normal like any other shop or business. The products are sent by the franchisor, and you just need to advertise well and sell them. Other than this, all work conditions are similar to a normal local business. It is much easier than food joint franchise. So choose according to your level of expertise in the area.
A franchise is a very complicated legal process. The agreement signed between the franchisor and you depend on the type of franchise you want to own. It talks about the payment, the investment needed, the rules and regulations to be followed, the accounts to be maintained and the accountability that you will have if any of the rules are not followed properly. It also contains the term of the agreement, as to how long the franchise can by run by you. Often the franchisor asks for a guarantee by the franchise owner, on a personal scale. Before getting onto an agreement, this should be kept in mind as to what kind of guarantee you want to give to the franchisor. The accounting management is also reiterated by the franchisor, and often a management fee is to be paid. The agreement will have detailed provisions regarding this fees and accounting formalities of the franchise. The franchise will have to ensure that full accounts and full set of records are kept. The franchisor also has the right to inspect these accounts. These things are a few things you should keep in mind before entering into a franchise agreement. If you want autonomy in the business, then franchise is not the right choice for you.
3. Do the initial research
Before you decide to open up a franchise and get into an agreement, you should do a personal research on what franchise actually is and how it works. You should know the amount of capital and investment it will take. You should also know the general terms and conditions of a franchise, that are present in all of them. You should know the legal aspect of it, and the liabilities that you may incur in case any mishap happens. Also know about the nature of the business, and the profits the franchisor is generally making in the market level, so that you ensure yourself that you are not getting into a non-profitable business. Also do some online research about the terms and conditions and the working of the franchise you want to get into. You can visit their website, or other sources than their website, that may offer information regarding that particular franchise and how it works. If any acquaintance or relative is into the same business, you can consult them on its working. This is a very important step, as deep research into their working conditions will help you decide whether you want to get that franchise or not. A lot of material, time and labour is spent on making the agreement, forming it and then getting the permission. If you are not well aware of the terms beforehand, that might cause a problem later on at the time of forming the agreement.
know the capital you have, and the limits to which it can be stretched through loans and borrowed fund. Sometimes, people with less capital take up big franchise and are often not able to work on them alter due to lack of funds. So before starting up a franchise, you should bear in in mind the amount of capital you have, and you will be able to contribute in the long term, to keep up with the franchise terms and quality.
If you keep these tips in mind, then you are well-off to start the franchise business. As mentioned earlier, with the right capital, skills and management the franchise can boost up in an instant without any hard work or labour. You will get it profitable in no time, and will be working off well in a very short span of time.