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Franchise -The right way to start your Business
Franchise is the best business model to start your own business. It ensures that the person who takes the Franchise is in the right hands. In this model the Franchiser (the owner of business) parts his ownership to the person who takes the ownership (The Franchise) with an agreement which grants the legal right to the purchaser to use the brand name and products which are tested already by the owner of the business.
But today I am going to talk that what things a purchaser needs to take while purchasing a Franchise:
1) Investment: The Franchise needs to deposit a onetime Royalty fees to the Franchiser (owner of business) for taking the Franchise which is also written down in the Franchise agreement. Sometimes in addition to the Royalty fees some Brand owners also takes a certain amount of monthly commission on the sales revenue generated. This amount is only taken by certain International players.
So the Franchise needs a certain Financial Planning to estimate the Working capital requirements for meeting the day to day operations as well as the Profitability of running the Business. This is the most basic requirement for starting the Franchise Business though the Brand name is established.
2) Location: The location of the Business also needs to be seen .Since without the location assessment the Franchise business cannot run smoothly. Though now days this location constraint is being resolved with home delivery options but still the Location advantage is to be taken into consideration before starting the Franchise business. The return on Investment depends on how the customers will be attracted to that location vis a vis the competitors. Thus in the initial planning the location of the shop needs to be considered while taking the franchise.
3) Policy of the Franchisor: Though there are various Brands available in a particular sector, considering the policy of the Franchisor is the one thing Franchises need to consider before signing the Agreement. Sometimes the agreement is not properly written by the Franchisor which leads to lack of Transparency between the two parties. Thus the Franchise needs to go thoroughly with the written agreement and then only sign. He has to take into account all the policies of the Franchisor otherwise the Franchisor can also penalize the purchaser for not following the guidelines of the agreement. In that case even the royalty fees is not given back also in some cases.
4) Risk: Though the amount of Risk is considerably reduced in case of the FRANCHISE system but still with any business without hard work Success is not guaranteed. So the Purchaser needs to take the calculated risk and need to be on toes every time. He has to plan everything for the Business from Capital to human resources and how to increase the profitability. Though he can take the guidance of the Franchisor and colleagues in the same Business, but ultimately he is the owner of a particular territory for which the strategy may need to be altered to obtain the maximum benefits.
5) Team work: The success of any Business depends on how beautifully a Business person builds his team. The team is only the decider of the success of the business. If the team is competent enough the business can rise to suitable heights in a short time span.
All these points need to be kept in mind while investing in any Franchise and of course the strengths and weaknesses of a person needs to be analyzed vis a vis the sector in which he is taking the Franchise. Of all these points are well taken care of then the Franchise can be a huge success. For a Proper guidance on how the various Franchises can be taken and which one is the right for you, Connect Franchise-ProvidingFranchise solutions is the right place for you. Connect Franchiseat Indore offers Franchise opportunities in the Right way to people all over India. So what are you waiting for, Start your own Business with the Correct Franchise approach.