Franchising is a good option for individuals who want to set up their business
idea in the food service sector. If such an individual is operating under the
umbrella of a popular brand, you can speed up your journey. After their doors
are open and they begin to earn money, the owners of a restaurant will consider
franchising with you as a means of growing their food business. In this blog, we
will learn about the benefits of franchising in India, the different kinds of
food franchises available in India, and "How to start a food franchise business
What is Franchise Business?
Franchises are companies that permit franchisees to use the names and models of
the franchisor. In a franchise business, you generally own the company, but you
must follow the rules and regulations set by the franchisor. A franchisee runs
the company under the brand of a national or international corporation.
Establishing a franchise can be beneficial if the brand already has a many loyal
customers who frequently support the business.
Furthermore, franchisees take up the franchisor's entire business model, from
pricing to marketing/branding. Once permitted, the franchisee has access to the
franchiser's brand as well as other resources such as logistics, accounting, and
Types of Franchise Business Model in India:
Franchising with multiple units:
A franchisor who permits a franchisee to own and run various units is using a multi-unit franchising model. The franchisee holds the authority of expanding the business for each of these sites. The franchisor and franchisee may opt to collaborate in the future if a unit proves to be profitable.
A managing franchisee has been given a specific power to oversee and administer the franchising operations of a particular territory by the restaurant owner (the master franchisor) under the terms of this contract. The master franchisee offers assistance to any franchisees who sign inside the boundaries of this zone.
Franchising on a single unit:
In this instance, the proprietor of the restaurant is in charge of overseeing the operation. The owner doubles as the operator, to put it simply. This is also known as direct franchising. New entrepreneurs think that starting with a single franchise location is the greatest option.
Franchising owned by the company:
In this kind of franchising, the brand sets up shop in the nation as a representative office and collaborates with the franchisee to develop a business. The franchisee and the representative office team members work together to enhance the brand's reputation and foster a positive relationship between the brand and its customers.
Franchising for area development:
Area development franchising and multi-unit franchising are quite comparable. It is unique in that it links more units, extending its reach over a wider geographic area. Area developers possess the greatest array of possibilities when it comes to raising brand awareness.
Advantages of Starting a Franchise Business in India:
- More successful than a start-up.
- The failure rate is low.
- Improved financial security.
- The reputation of the franchisee is already a known and established name.
- Customers who are loyal to the brand.
What is the process of starting a food franchise business in India?
The process of starting a food franchise business in India is as follows:
The first step is to complete the necessary documents with the franchise provider. A word of caution: if the franchisee is from another country, he must communicate with the company's international representatives.
Create a legal entity:
When all the documentation is completed, it is important to create your own legal entity so that no potential problems arise in the future. This includes having standing witnesses to avoid potential stumbling blocks.
Setting up a franchise:
Since you are filling out the licensing paperwork, the next one represents one of the most important stages of this business plan. You cannot establish a franchise if there are no licensing requirements.
HRM (Human Resource Management):
The following section is about Human Resource (HR) Management. Without the professional presence of human resources, no business will succeed, especially if you want to invest in franchise businesses that grant many customers. Moreover, you must consider and identify the different types of employees that will be required at each stage.
Taxation and other compliances:
We have reached the final stage, which is asking about tax and currency risks, since we have already explained the main essential stages. As a specialist, you should be aware of the types of taxes to be paid in the future (i.e., Goods and Services Tax, ITR filing, and other annual compliances). During this phase, you can gain control and increase your chances of saving tax.
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Investing in a food franchise business in India can yield more profits than
starting any other business. However, you should have enough knowledge to
understand the requirements of starting a franchise for ease of doing business
in the market, and the more you know, the more money you will earn.