Written By: Smita B

The franchise model has become a viable business option for Indian entrepreneurs in last few years. Therefore, India is offering a favorable environment for various franchise businesses. Additionally, the country is encouraging entrepreneurs to explore this large and diverse market of franchise businesses.

However, there are a wide range of options available in the franchise model. And franchise selection is very important step in starting a franchise business. Because choosing the right franchise model has a significant influence on the company's performance and longevity.

Therefore, this article will delve into the specifics of the franchise selection process. Here, we will acquire the knowledge necessary to identify the most suitable franchise model for the establishment of a profitable franchise business in India.. Let’s, begin the topic by gaining knowledge of the overall franchise model.

Franchise Model: Quick Overview

There are various franchise model options available in India. Aspiring franchisees need to consider these options before stepping into a franchise business. There are four broad categories used to classify the franchise model.

• Service Based Franchise

This franchise model is based on service-providing. As the businesses included under this category offer only services to clients. For instance, healthcare services, education services, consulting services, financial services, etc.

• Business Format Franchise

A business concert that is well-established is replicated in this model.. For instance, services or products and operating systems are replicated for every franchise branch. It majorly include segments like retail stores, food chains, hotel and hospitality services, etc.

• Product Distribution Franchise

Under this franchise model, a franchisor offers goods or services to their franchise partner, Where, the franchisee subsequently sells them to their clients. For example, FMCG goods, pharmaceuticals, automobile spare parts, etc.

• Investment Franchise.

In this franchise type, generally, large projects are involved. Where these types of projects require huge capital to operate businesses like hotels, restaurants, hospitals, etc. And franchisees invest in these projects with or without being active franchise partners. ( Active franchise partner invest in big projects and involve in business by setting up their operating team in those businesses. Whereas, some franchise partners prefer to support the business with only financial investment.)

Aspects To Take Into Account Before Selecting A Franchise Model

Evaluation Of Finacial Strength

The investment required for each franchise business model varies.. Therefore, aspiring franchisees have to evaluate their financial strength before diving into the franchise business.

Aspirants need to take into account the financial element of the franchise business. For instance, initial investment, franchise fees, infrastructure cost, operating capital, etc. As selecting a franchise model that fits your budget is essential to plan future goals for the business.

Assess The Area Of Interest

Aspiring franchisees should consider their passion, abilities, and areas of interest before venturing into the franchise industry. Additionally, they have to assess their comfort and experience for certain franchise opportunities before selecting them.

However, the acknowledging area of interest is a crucial step for not only the franchise business but also all other businesses too. Because it benefits an aspirant to keep involved and motivated throughout their business journey.

Perform Thorough Market Analysis

In order to determine the most suitable franchise business model, it is necessary to carefully evaluate a variety of pertinent factors.. This can only be achieved by conducting through market research about the interested franchise business.

It basically includes factors such as franchise business reliability, popularity, consumer satisfaction ratio, franchisors credibility, etc. Apart from this aspirants have to analyze the market position of the brand. As an example, expansion plan, competitive landscape, and unexplored opportunities.

In addition to this, aspirant have analyze consumer preferences, industry dynamics, supply-demand dynamics across a range of industries, and many other essential components.

Explore The Franchise opportunities

After identifying the area of interest for the franchise business, aspiring franchisees have to focus on navigating the potential opportunities. For this aspirants can investigate franchise opportunities in interested sectors or industries.

While assessing franchise business options, aspirants should consider a few things. For example, brand reputation, franchise model, franchisor support, operational support, financial capacity, etc.

Additionally, aspirants can consider some other options to evaluate franchise opportunities. For instance, they can perform extensive audits of franchise businesses by looking over FDD (Franchise Disclosure Document) and by connecting and discussing with existing franchisees.

Evaluate The Franchise Model

Franchise model evaluation is a necessary process in franchise selection. There are different types of franchise models available in the franchise sector.

Nevertheless, each franchise models has its own set of advantages and disadvantages.. And it suitability of those franchise models depends upon the franchisee’s goal and available resources. Therefore, aspiring franchisee need to examine various franchise models to choose the right franchise business. As an example, the franchise model’s flexibility, longevity, scope, etc. As they assist franchisees in determining if they fit their long-term aims and level of experience.

Assess The Level Of Support Offered By Franchise Brand

A franchisee's success in franchise business can be greatly increased by a few factors. Franchise brand support is one of the essential factors among them. Hence, franchisees have to select a franchise model with extensive training programs and strong operational support.

And, to evaluate the franchisor’s loyalty, aspirants should assess certain things. For example, marketing support, access to the brand name and its business model, and continuous support on various stages of business.

Eventually, franchisees can achieve success by selecting the right franchisor and franchise opportunity. Where they get active and constant support from the franchisor.

Ensure Legal And Regulatory Compliance

It is essential to verify that the franchisor complies with all the necessary laws and regulations for their franchise business model. As it helps to avoid any legal challenges in the future.

Therefore, franchisees have to examine the FDD,  franchise agreements, and other legal and technical aspects very carefully. In this examination process, franchisees need to be aware of their rights, responsibilities, and legal procedures.

However, franchisees can seek assistance from a franchise consultant or legal assistance while evaluating the franchise documents.

Prioritise Transparency

Every business relationship is based on transparency. Therefore, the franchisee and franchisor bond is a key component of the successful franchise business. While choosing the franchise model in India, franchisees should give preference to franchisors who respect transparency in every business-related decision.

Additionally, franchisors who encourage direct and comfortable communication will indeed build trust in the franchise business. Meanwhile, fraanchisee can evaluate the frachisors compitency and reliabilty by having open communication with the existing brand franchisees. Where they can learn about their experiences, overall satifaction and degree of support from a franchisor. All this information eventully will assist an aspirant to select the best franchise business models.

Obtain Expert Advice

Most of franchisees seems overwhelmed while handling the intricacies of franhchining. Because they barely aware of the true meaning of franchising. In those cases it is better to get expert advice from franchise consultant or advisers.

Hiring franchise experts will ease the franchise selection process. Throught the process experts may offer insightful analysis, practical advice, and industry knowledge. Ultimatly, it will help an aspiring franchisee to make well-informed decisions regarding their franchise journey.

Supplementary Tips: Strengthening Franchise Model Selection Strategy

• Anylise regional market dynamics i.e regional consumer inclination, cultural senseitivities, market size etc.
• Prefer peaceful franchise process by recruiting franchise advisers or lawyers.
• Build a strong network with active participation in franchise exhibitions and events.
• Evaluate the demand for the product and service in the markets. Along with this, research competitive landscape for the product or service category.

Conclusion

There are many types of franchise are available in the Indian market. However, many of them are running successfully by their franchise partners. Yet selection of right franchise model is essential to starting a profitable franchise business in India.

Although, aspirant can find the suitable franchise business model, they need to follow some essential tips. Along with this an aspirant have to evaluate numerous factors to understand which franchise model suits there interests and abilities.

In this write up we have, shared extensive information about the whole franhchise models and the right way to select the right franchise model. Using this cutareted information an aspirant can perform careful assessment and make well inform decisions with there franchise venture.

Ultimately, it will lead them towards franchise success in the fast-paced Indian market.

If you are prepared to move forward now? Then reach out to our experts at FranchiseBazar.

Disclaimer: The brands mentioned in this blog are the recommendations provided by the author. FranchiseBAZAR does not claim to work with these brands / represent them / or are associated with them in any manner. Investors and prospective franchisees are to do their own due diligence before investing in any franchise business at their own risk and discretion. FranchiseBAZAR or its Directors disclaim any liability or risks arising out of any transactions that may take place due to the information provided in this blog.