How Does Franchising Work?

Franchise is an agreement between a franchisor who is willing to share his trademark, brand name, patents with the franchise for a fee i.e. Royalty and a share of the profit. Both the parties are required to sign an agreement which states the terms and conditions to which they need to abide. When a company wants to expand but does not have the resources or the manpower they can opt for franchising.

Franchise business in India is a growing business model. The reason being the risk factor reduces to a large extent. As a result, many aspiring entrepreneurs are investing in this form of business. Here you can guarantee a fixed income each month and don’t need to worry about market fluctuations.

There are many franchise options in India. For instance, in the space of health and fitness in the form of gyms, hospitals, yoga centres like Studio 11, Cult, Apollo Hospital, Global hospital. Food and beverages centres are a very common franchise option. The popular ones include Dominos, Subway, Punjab Grill, Coffee by DiBella etc. In a franchise the franchisor provides the essential information to the franchisee to ensure standardisation of the product / service.

Franchise in education sector is a new concept. Earlier you could find franchise options mostly in food and goods space. But nowadays franchising is possible even in services. In service industry the standardisation of service is difficult due to various factors and there’s no way to quantify it. Here training of the staff is the responsibility of the franchisor. As a result, you can have complete quality assurance. The demand for renowned educational institution is increasing hence a franchise in this space has become popular. Here the investment is also not too high, all you need is a place - which can be a rented property also.