- What is a Franchise business?
- How to Set up a Franchise Business in India?
- What Points Should Consider While Setting Up the Franchise Business?
- When is the Time to Consider the Franchise Business Model?
- How to Find Low Cost Franchise Business?
- Top 10 Low Investment Franchise Business in India
- Why You Should Choose a Low Investment Franchise Business?
- What is the Difference in Between Franchise business & Own business?
- What are the Pros & Cons of Franchise Business?
- Final words on Franchise Business
- Faq’s on Franchise Business in India
Starting a business is definitely hard to crack & it could be one of the toughest decisions ever. First, you gotta be convinced with an idea, you need to have a good amount of working capital than build a plan for marketing, branding, sales etc. Sounds like a lot of work to figure out? This is where the Franchise Business comes into play.
In this article, will cover what is Franchise Business, how it works, what you need to start a Franchise, and much more. Let’s dive in to see how you can benefit from Franchise Business opportunities and how good this is as compared to starting a business on your own.
What is a Franchise business?
A franchise business is the extension of an existing business. The franchise business owner has to execute it in exactly the same way as the parent company is executing the business. It is a business system in which a private group of individuals is sold the rights of the business model, logo, name etc of a much larger company. These private operators or business owners are referred to as franchisees. The relationship between the owner & the franchisee is contractual. We can see a lot of examples of franchisees around us like Subway, Dominos, Starbucks, Mcdonalds, Cafe Coffee Day, Pizza Hut, KFC & so on.
How to Set up a Franchise Business in India?
The initial payments, methods & policies are different for different companies to buy a franchise. Therefore to buy the franchise of any business you have to abide by their particular rules and regulations, pay the specified amount.
- Once you buy the franchise you automatically get the rights to use the company’s brand logo, name, slogan, etc.
- You also have to show a property as per the company’s requirement to set up your own franchise.
- The time period of the contract is also going to be specified in the contract.
- In general, the tenure is 5-10 years. Also, you can renew the contract applied to all terms & conditions.
- After the business takes off, there is then royalty payment settlement which might be on annual basis, monthly or it depends.
- The amount of royalty payment is calculated on the basis of total sales counted by the franchise outlet.
- A contract with all specific terms & conditions would be signed between franchisee and franchisor.
What Points Should Consider While Setting Up the Franchise Business?
- The franchisee must remember a fact that he/she has only bought the right to sell the company’s products & use the name. He/she has not brought the products.
- All the methods, processes, uniforms, pricing etc of the existing proven business system will remain the same as the actual business model.
- It is going to be a retail outlet of the existing business with exactly the same appearance & representation.
When is the Time to Consider the Franchise Business Model?
An important question is when to start with a franchise business?
The probability of falling down in any franchise business is very low as you are investing a big money into an already running proven system. Another important factor is, you don’t have to worry about the growth of your business. You don’t have to invest time in starting a business from scratch & waiting for it to grow.
When starting a new business you will have to deal with all aches and pains alone by yourself, while this is not the scene with the franchise business. All your worries will be resolved with the support of your franchisor guidance.
How to Find Low Cost Franchise Business?
As we’re living in a global village, there is n number of opportunities open in front of you. There are so many websites available that provide a list of low-cost franchise business options in India. These sites would provide you with different categories to choose from as per your requirements. You can also select from a varied price range that fits your business investment plan. You will also get location options to facilitate your business start-up.
Below is the list of websites providing franchise business opportunities in India.
You can opt for various types of franchise business ideas like starting a gym, setting up a restaurant, starting a beauty salon, retail store & more.
Top 10 Low Investment Franchise Business Idea’s in India
It has established itself as a trusted and popular Indian brand over the past few years. This is a multi-billion-dollar company. In 2006, Baba Ramdev and Acharya Balkishan founded this company.
A minimum of Rs. 1 lakh is required to open a Patanjali Distributorship Store. The company’s original product lines were herbal and Ayurvedic products. Patanjali is another one of the Best Low-Cost Franchise Businesses that has grown into other areas after being very successful in this one. It now sells beauty products, health care products, personal care products, food, and a lot more.
It’s becoming increasingly popular to use DTDC Courier services. As a result, you should consider investing in the courier industry, of which DTDC is an excellent example. DTDC was founded in 1990 and has more than 12000 franchisees in India, serving both domestic and international customers.
It’s easy to get a DTDC franchise because there aren’t many requirements. 100 square feet of space and a financial investment of Rs 1.5 Lakhs are required. For the sake of maintaining the good name of DTDC, you must employ delivery personnel to make on-time deliveries. DTDC courier is one of India’s most affordable franchise options.
When Suguna Chicken was founded in 1984, it was able to make a name for itself in the poultry industry by producing high-quality chicken at its poultry farms. Your investment in the Suguna Chicken franchise is a wise decision because of the rising demand for chicken products.
An investment of Rs 5-10 Lakhs and a space of 300-400 sqft are required for the franchise opportunity with the Suguna Chicken outlet. Operations support, staff training, on-the-ground assistance, expert consultation, and IT system integration are all included
As a low-cost franchise, you can get started here with just 5 lakhs. Pick-ups and deliveries are handled by world-class carriers that InXpress has partnered with. InXpress helps customers find the best carrier and service option for their needs at a reasonable price. In addition to being one of the most affordable franchise businesses, the brand provides entrepreneurs with the tools they need to build a scalable business.
This business offers taxi and rickshaw services. They’re rapidly growing, with nearly 29 million rides completed to date. The expected Investment for the Franchise is from 2,00,001 – 5,00,000. They are eager to expand their business and invite other franchises to join them. This is one of the best low-cost franchise businesses because they are expected to expand their business further.
In Asia and beyond, KidZee is one of the most popular pre-school franchises. Franchises like KidZee School, which specializes in business education, are available. KidZee has more than 1900 centers spread across 700 cities in India, making it a popular franchise opportunity for pre-schools.
The franchise requires a minimum investment of 12 lakhs and 2000-3000 square feet of the school area. Marketing, enrollment, infrastructure design, and accounting will all be handled by our team at KidZee!
Kake di Hatti
Kake di Hatti is a multi-generational restaurant that has been in operation for over seven decades. It began as a small shop in Chandni Chowk in Old Delhi in 1942 and quickly became a household name. The initial fee for an individual franchise unit is Rs 15 lakh, due to its high-quality eatables, Kake di Hatti has developed a loyal following. Only after ensuring that the franchise owner will be able to maintain the restaurant’s high-quality standards does Kake di Hatti issue franchise licenses at a low cost.
The Amul Ice-Cream Parlour can be a good business for you to start because of this: Amul has become a household name after nearly 75 years in business and consistently high quality. India’s largest ice cream company, Amul, has more than 1,500 locations.
For an Amul Ice-creams franchise, a minimum of 300 square feet of well-decorated, air-conditioned space is required. 2-5 lakhs of rupees are required for the initial outlay. The convenience of having your inventory delivered directly to your location is one of the biggest benefits of owning an Amul franchise. The retail sale of Amul Ice Cream is one of India’s most popular and least expensive franchise opportunities.
Shoes, sandals, floaters, and flip-flops from Paragon are well-known in the footwear industry for both casual and formal occasions. They also produce footwear for ethnic groups other than their own. This footwear company has been making its mark in the industry since 1974. If you want to get into the footwear business, Paragon is a good place to start because of its good reputation, reliability, and profitability.
A 500-1000 square foot shop and an investment of Rs 20-30 lakh are required to open a Paragon franchise. You can extend the contract for an additional five years after the initial term expires. They assist franchisees in the field as well as train them.
This is one of the greatest and best low-cost franchise businesses in India, as they own India’s largest network of tea shops. Their chai and coffee are some of the best around, as well as a variety of delectable snacks. They provide the best possible service. The typical franchise investment ranges from Rs. 5 lakhs to Rs. 20 lakhs.
Why You Should Choose a Low Investment Franchise Business?
As the studies say, after China, India is the second most populated country in the world & seventh-largest as per the area wise. In overall development, India is the second most growing market in the world. Therefore, the chances of investment from the different MNCs getting profit across the globe are very high.
On international grounds, the franchise market in India has been ranked as a very attractive market.
Good international brands are targeting the Indian market for extending their business in India.
There are specific professional organizations dealing with various problems faced by franchise owners to help them kick start their business.
What is the Difference in Between Franchise business & Own Business?
If you are planning to open a new business, you might be thinking about how a franchise business is better than starting your own business.
The biggest benefit of franchise business is venturing into an already established proven big business. Your risk related to growth & profits is comparatively low. It helps you in every step especially if you don’t have previous business experience.
The initial years of your business starting from scratch are very difficult. In fact in India, only 1% of business startups actually start & survive in the market.
So when it comes to choosing a sense of security opting for a franchise business or starting your own business, one must make the decision accordingly.
What are the Pros & Cons of Franchise Business?
Now, before moving forward let me let you the advantages & disadvantages of a franchise business before stepping into it.
- Risk: The biggest advantage of investing in a franchise business is investing in a successful business. The risk is very low regarding profit & growth.
- Training: When you buy the right of franchise you also get the advantage to get trained with the same technology the business is already using.
- Marketing Strategy: franchise marketing is already tested & proven as the parent business is already using the same marketing. You don’t need to shred extra blood brainstorming useful strategies. The marketing material & advertising pamphlets are shared by the parent company which provides your business with a quick push.
- Support: there are all kinds of support provided by the franchisor to the franchisee. Methods, market, price, location everything is set as per the parent company.
- Customer: as you sell the product of a proven business company you need not struggle for the customers. The customer is likely to come on their own as they are well aware of the brand name & are already using the product.
- Initial Fees: The initial payment required to buy the franchise rights is a must & is quite some amount. The amount & property specifications might feel challenging to fulfil at once. The cost of buying the license vary from brand to brand but at par, it is almost the same. It costs a lot. Normally, it may start from lakhs and end up to a few Crores.
- Payment of ongoing royalties: From 5% to 12% royalty against the total sales of the particular outlet which must be paid to the franchisor at regular intervals of time as stated in the contract.
- Rules must be followed: Yes right, even after you spent a huge amount & start your business. The business is a true sense is not yours, you have to follow all the rules set by the parent company. If the rules would not be followed the pizza of dominos would not taste the same all over the world.
- Funds for marketing: To maintain the company standards & your sales pouring in, you will have to do marketing. And mind here marketing is not free of cost. The parent company may share the overall marketing cost, but the franchise will have to bear 1-2% of the marketing cost.
- Selling your business- Remember you own a franchise & you’re abiding by the rules of the franchisor. Even if you wish to sell your franchise to someone he/she has to be approved by the franchisor. You just can’t sell it to any random buyer.
Final words on Franchise Business
Before proceeding with the investment in a franchise business, you must consider everything that is stated above. The idea of starting a news business is exciting but it often comes wrapped up with difficulties & challenges. If you’re not experienced & wish to start your own business without any assistance chances of your survival are slim. If you don’t have the expertise, it is advisable to go for a franchise business.
Also, consider having accounting software to manage your business digitally. Coming from an IT or accounting background you can also be a software reseller. That’s also a kind of franchise business selling the services.
Faq’s on Franchise Business in India
In India, it costs between Rs. 1 lakh and Rs. 10 lakhs to set up a franchise. If you want to start a low-cost franchise, you can do so easily with an investment of less than Rs 2 lakhs.
Franchise business in India has several benefits: lower operating costs; local business knowledge; fast expansion; branding; training; technical expertise; and the capital is easily accessible.
A franchisor can't predict your success, but they should know what a typical franchisee makes and your earning potential. The franchisor may provide gross sales figures without rent and other operational expenditures.
There are many franchises that make a lot of money in India and all over the world. But the amount of money made varies from time to time. Today, Dr. Lal Pathlabs, Subway, Amul, Lenskart, and Jawed Habib are all making a lot of money in the market as it is.
Franchising, or a business franchise model, is an agreement between a well-known brand, called the "franchisor," and an independent business owner, called a "franchisee," that lets the franchisee use the franchisor's brand, business model, and other intellectual property.
For franchisees, the benefits include a higher chance of success than with a sole proprietorship, a shorter time to opening, initial training and ongoing support, help in finding the best location, the selling power of a known brand, lower costs through group purchasing, and the use of an established business model.