What is a Franchise and Setting up a Franchise of any Business

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When starting a new business, what will you prefer - Setting up everything from scratch from building your brand name to promoting and marketing it or Using the name of an already established brand in your own business to be successful.

For most of the people, the latter seems an easy and interesting option and of course, it is. If you really want to save your time setting up a business and using the hit and trial method to run it, and want to be associated with a big brand name along with working for it, Franchise business is your Saviour.

What is a Franchise Business?
Precisely speaking, Franchise business is an extension of an already set up and existing successful business. Franchise businesses have the biggest advantage of an established, well-known brand and the support of a successful parent company which increases the chances of its success.

The relationship between a Franchise Owner and Seller is contractual. The examples of Franchise Businesses are Cafe Coffee Day, Subway, Macdonald’s, Starbucks, Pizza Hut, Dominos, etc.
Important Points:
● Business opportunities other than franchise are less expensive and generally don't charge ongoing royalty fees.

● The methods of the proven business system such as the uniforms, the pricing etc. would remain the same.

● Most business opportunities do not have any ongoing supportive relationship between the seller and the buyer; and after the initial package is sold, buyers are on their own, this being the biggest disadvantage.

● The franchise business is just going to be an outlet in the same city or in a different city with exactly the same representation of the already tested business operation, and hence safer and successful.
Pros and Cons of a Franchise Business
Good things first, let’s see the advantages of opening a Franchise business.

Pros:
➢ Less Risk Factor
➢ Proper Training
➢ Tested Marketing Strategy
➢ Standardized Financial and Accounting Systems
➢ Financial Assistance
➢ Uniform Packaging
➢ Proven Marketing and Sales Strategy
➢ Venue Selection Guidance
➢ Quality products and Systems
➢ National and International Advertising programs

Cons:
➢ Raising Capital
➢ Strict Rules and Regulations
➢ Cost of License
➢ Payment of Ongoing Royalties
➢ Arranging Equipment
➢ Selecting Poper Location
➢ Raising Fund for Marketing
➢ The Owner’s problems now become your problems

Having seen both sides of the coin, let us now move to our next very important topic of how we can set up a franchise business.
The process of Setting up a Franchise Business
1. The first step towards setting up a Franchise business is to Contact your desired Franchise Business(es).

So, Schedule appointments with representatives from your chosen franchises to learn the requirements to open your own franchise and see the kinds of training, marketing and operational support the franchise representative can offer you.

2. Secondly, Seek Professional Help and seriously consider taking the help of a lawyer and/ or accountant to review the specifics of your new business as setting up a new business can get creepy sometimes and hence, professional help will surely be a bonus for you.

3. Raising Investment Capital is the 3rd most important thing that you need to do. It’s well and good if you do not need any financial help in setting up the franchise business.
But if that’s not the case, it's better to take a loan from a bank or commercial lender, or you may find success with a government loan from the government's Small Business Association (SBA).

4. If everything is set up, you can now Sign your contract with the Franchise Owner. But, you will again need professional help for the same. Make sure your attorney read II the documents and details before you sign the contract and get started.
These were some of the steps in which you can set up your own Franchise. However, only setting up a Franchise is not enough as every business requires patience and hard work and so does this as these are the factors which will make your business successful.

We hope that this information would have helped you in seeking what you were looking for and that you will surely achieve your dream of starting a new business.

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