The number of businesses being franchised in India has grown at an alarming rate in the last decade. The reason behind this success lies in the fact that franchising provides several benefits to both entrepreneurs and entrepreneurs themselves. Here are some of the most important ones among them
5 Reasons Franchising Is Growing So Fast
Although franchising is common in many countries around world, India has only begun to explore its potential. According to news reports, however, it’s currently growing at a rate of 40% per year. What is making franchising so attractive to Indian businesses? Here are 5 possible reasons
Initial Capital Required
The initial capital required for franchise business is relatively low and usually depends on whether it’s a single or multi-unit franchise. A small-scale franchise can be launched with around Rs. 1 crore, while a larger setup may need anywhere between Rs. 2-5 crore. Your budget will depend on whether you want to own a single or multiple units of your franchise; consider factors like rents, cost of setting up and so on while finalizing an investment plan.
Ease of Operation
One of the best reasons for choosing a franchise over a standalone business is its ease of operation. All you need to focus on are your core strengths—because, with a franchise, most aspects of managing a firm will be taken care of by your brand’s franchisor (the company that sells you all necessary processes and procedures). This makes it much easier to run your business, thus freeing up more time to dedicate to other areas.
Low Startup Cost
The cost of starting a franchise is often much lower than starting a traditional business. If you own your own building, buying furniture and fixtures for your business could be tens of thousands of dollars. But with a franchise, these costs are covered by your franchisor (the company that owns and operates all of its franchises), so you only need to invest in an initial franchise fee to get started.
Consistent Quality Product
You can never compromise on quality. It is directly proportional to customer satisfaction. If a franchisee delivers inconsistent products and services, he will not be able to attract customers in large numbers and, therefore, will not be able to make any profit. Even if he does make some profit, it will only be for a short period of time until his reputation drops down, which may also lead to loss of sales as well as franchisees leaving his brand.
Your brand is one of your most valuable assets. Establishing a clear and consistent brand across all of your locations will help ensure customers receive a high level of service, no matter which location they visit.