Many people want to start their own business, but either doesn`t have a startup business idea or lack the entrepreneurial vision. A franchise business in India is one of the most feasible options for those who don`t want to start a business from the scratch.
Purchasing and operating a franchise is easy and is similar to coloring inside of the lines. Brands that are well established and have a strong presence already have a niche market. So, if you don`t have a problem selling burgers that are made by someone else, a franchise business may be just the ticket for you.
But the universe of a franchise is broad and diverse. It has arguably more than thousands of options, which is both good and bad news. So many choices often result in confusion and lots of intimidation.
Though franchise business in India offers a new yet practiced way of doing business, there are multiple things you should clear before choosing any franchise business.
Every year, a lot of entrepreneurs enter into a franchise business for the first time. But very few achieve success. So how will you decide which franchise is good for you?
Here are 5 questions that you must ask before investing your money in a franchise:
1. How much do I invest before entertaining customers
You may find the initial charges and investment-related information on the company website or franchise brochure, but you might incur various other costs afterward. Hence, you should ask about the initial investment in details apart from the basic information. Ask them about real estate, equipment, leases, etc.
Always ensure that you discuss these terms in detail with the franchisor so that you have a clear picture of your investment and your financial requirements to get up and running.
2. What changes did they make to support their franchises through COVID-19?
Two years ago, asking this question wouldn`t have come even in the existence. But now we are living in a changing world. Thus, you need to ask them how they supported their franchises throughout COVID-19. Knowing how things went in the worst of times will give you clear insights into how things might go in the best of times or amidst any other crisis.
Many good franchisors went out of their way to support their franchisees. Some even waived off their fees and helped them obtain paycheck-protection-program funding along with making them updated with new technology.
3. What sets your brand apart from its competition?
Competition is a part of any business. However, it is important to understand what makes one brand different from the rest. For instance, if you are thinking about buying a fitness franchise, you will want to understand what sets this brand apart from the crowd and what concept do they have as a brand. As it is your money that you want to invest, think twice before you invest. Make it a point that you understand the business model and value proposition of franchise businesses in India.
4. What is your failure rate? How many franchises have closed and why?
Even the most popular franchise brands have their franchisees closed due to one reason or another. In some cases, it’s the franchisee`s fault as they did not have the required skill set or could not adhere to the system. But in many cases, it’s the franchisor`s fault. It could be insufficient training or an inefficient business model.
As no one wants to invest in a bad business model this is why it is important to examine a brand`s failures no matter who was at fault.
5. Are there any Financial Incentives or Deals?
Franchisees often hesitate to talk about monetary incentives or deals. Many franchisors offer discounts on the franchise fee. They also offer to waive off the royalty fee for a few months to help the business take off. So before you decide to invest in a franchise business in India, ask your franchisor whether they assist you in lease negotiations, site selection, etc.? What support staff will be accessible to you and in what other ways they will assist you beyond providing initial training?
Franchise business in India often comes with less risk than starting a business from scratch and offers a path that can lead to success and profitability. However, it is important to ask the above-mentioned questions and many other things to ensure that you are putting your money in the right direction.
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