Want to start your own business?

Searching for profitable business Ideas In India? OR

Searching for low investment business ideas to start your business?

Starting your own Franchise Business can be the most profitable business for you.

How?

Franchise is a strategy used by the businesses with the aim of expanding their business.

In Franchise there are two important terms one is franchiser and other one is franchisee.

Franchiser is usually the owner of the business who explains the franchisee about the business model, provides assistance

and training, and also gives rights to sell his products or services to the franchisee.

Franchisee in turn pays certain amount to the franchiser for the trademarks and licenses.

India is developing so does the economy, many companies are trying to capture the India’s business market by building businesses i.e by starting their franchise so that they can expand their business more in India’s business market place.

For eg: Most of the well-known companies like Monginis have started their franchise.

Franchise differ from industry to industry and each has the unique framework & structure.

Steps to start your own franchise business in India: 

To start your own franchise business it is necessary to follow certain necessary steps:

  • Choose Your Franchise & Franchiser Properly:

Choosing the appropriate franchise is very important before starting your own franchise business.

Accurately select the industry based on your marketing and business goals.

You will have many options because each will have unique model and framework.

Conduct a through background check of the company first before choosing.

Ask the following questions to the franchiser before choosing:

  • How they help in case of technical/ Product problem?
  • How they are going to support you?
  • What are the royalty fees?
  • In the next coming five years how many franchises they are going to start?
  • What is their long term vision?

In case if you feel an inappropriate answers feel free to choose some another franchiser. Make sure you get answers of all the questions.

  • Budget:

Most important factor of the every business is budget. Depending on your franchise industry plan out the budget while setting up.

For example if you choose Monginis franchise which comes in food and bakery sector, Investment required for starting Monginis franchise is around 10 lakhs INR. Royalty fess i.e regular fees paid to the franchiser is around 6 – 8 Lakh INR.

While designing the budget consider following important points in mind:

  • Shop Location:

You will need to setup the shop consider the rent, brokerage, shop licenses expenses in mind.

  • Interior Designing:

Once the shop location is decided, consider expenses of furniture such as chairs, tables, kitchen and designing of the shop.

  • Architect fees:

Clearly ask franchiser whether the total amount paid includes architect fees or not. Whether they would take some percentage of commission from the sales or not. Depending on this keep the separate budget for this.

  • Other expenses:

It is necessary to plan out your budget keeping in the mind about the future possibility. Since you are starting your new business, if case if it fails, you need to keep aside some amount from the budget to pay the franchiser, to your staff.

  • Plan:

Once you select your franchise, plan out based on the objectives.

Answer the following questions:

  • What will be the marketing strategy?
  • What will be the total cost?
  • How to train staff?
  • How many resources will be required?
  • Total equipment required?
  • Pros & Cons:

Research pros and Cons of the business properly before starting out your own business.

  • Form a Company:

Forming a Company will be added advantage for your business and major advantage is for starting out your own franchise any type of legal structure is suitable as along as franchiser agree is okay with it.

It is recommended to form a company to avail various tax benefits.

Following are the options:

  • Proprietorship Firm Registration:

 It is a type of legal entity which managed and controlled by one person called as sole proprietor of the firm. The owner of the firm i.e proprietor is accountable for both profits and losses with unlimited liability.

If you are just starting out, then register proprietorship firm since it is very easy to form and doesn’t require capital and any government fees.

  • Limited Liability Partnership:

Limited Liability Partnership means some or all partners have limited liabilities. It is somewhat similar to Partnership, the difference is each partner is not responsible for the misconduct or negligence did by another partner.

In this case, you can go for LLP formation because it has limited liability and at the initial stage and you don’t have to spend much of expenses and follow a lot of compliance.

  • Private Limited Company:

Private Limited Company can be formed with a minimum number of 2 members and a maximum number of 200 members and requires to follow a lot of compliance.

A Private Limited Company is only recommended if you want to create a Trusted brand of his own and requires funding from the investors or wants to scale up his business to a much larger extent.

  • One Person Company:

OPC has only one member. You can go for OPC only if you “don’t want to involve others” and you are not expecting any funding from the investors.

As for the name, you have to check under trademark website or MCA website since the Name of the company has to be unique and should not infringe upon any existing business name.

Following are the features the name should possess:

  • Unique: The name should be unique. Note the plural version is not accepted.
  • Short and Simple: The name of the company should not be too long.
  • Suffix: The name of the company should end with suffix.
  • Companies: The name of the company should not contain any financial names.
  • Review Franchiser Agreement:

Before starting your own franchise business review franchiser agreement properly.

The franchise agreement is a legal contract which includes legal terms and conditions by the franchiser which is needed to be followed by the franchisee.

Clearly specify your needs and expectation to the franchiser and negotiate if necessary.

Final Step

Final Step is starting out. Just start out. There are no shortcuts for being successful in starting out the any kind of business.

To start your own franchise business in India you only required dedication and need to follow these important steps in order to setup your own successful franchise business in India.


Subrato Mukherjee

I am Professional CA with experience of more than 10+ years. My aim is to help startups and companies to help in various financial needs which is needed to expand the business.

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Subrato Mukherjee

I am Professional CA with experience of more than 10+ years. My aim is to help startups and companies to help in various financial needs which is needed to expand the business.

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