Are you looking to start a business but are unsure about the best business model and concerned about the potential risks? Wouldn’t you love to invest in a venture where the business model has already been proven, the brand is well-known, and you receive ongoing support from industry experts? You will surely adore this idea. Welcome to the world of franchising!
Franchising offers aspiring entrepreneurs a unique opportunity to leverage the success of established brands while minimising the uncertainties of starting a new business from scratch. Getting into the franchise business is lucrative. As reported by the Economic Times, the Indian franchise industry is valued at approximately ₹800 billion and is projected to grow at an annual rate of 30 to 35 percent in the coming years, according to the ‘FranCast White Paper on Franchise Forecast 2023-24.’
And franchise business opportunities exist in multiple industries, such as beauty (like Orane’s beauty academies), the food industry, pharma, retail, and many others. You will have a great chance to invest and earn consistent business profits. However, you may be wondering how to start a franchising business in India.
In this blog, we will explore how to start a franchise business in India, providing in-depth information on the step-by-step process to start a business franchise, benefits, and available opportunities. Let’s dive into what a franchise business is and why it is a smart choice for many entrepreneurs.
What is a Franchise Business?
A franchise business is a model in which a business owner (franchisor) grants the rights to use their brand, products, and operational model to another party (franchisee). This allows the franchisee to operate their own business under the franchisor’s established brand and guidelines. This model benefits both parties: the franchisor can expand its brand with minimal investment, and the franchisee can start a business with a proven model and strong brand recognition.
Examples of successful franchise businesses include:
- Domino’s Pizza: A global pizza delivery chain that allows franchisees to operate their own branches under its brand, providing them with a tested business model and high brand equity.
- KFC (Kentucky Fried Chicken): One of the largest fast-food chains in the world, KFC franchises provide franchisees with access to its famous recipes, global marketing, and established operational procedures.
- Max Retail: A growing brand in the fashion retail space, offering franchise opportunities to those interested in running a clothing and accessories store with an already established customer base.
- Kalyan Jewellers: A prominent name in the jewellery industry, allowing franchisees to operate luxury retail outlets with access to its vast product lines and exclusive designs.
- Orane Beauty Academy: A leader in beauty and wellness education, Orane offers franchise opportunities for individuals to open their own beauty training academies. Orane has 115+ beauty schools franchises in India. Franchisees benefit from Orane’s extensive curriculum, a strong reputation in the beauty education industry, and support systems for running a successful training centre.
In each of these cases, the franchisee gains the advantage of running a business with an established brand, operational support, and often national or global marketing campaigns, making it easier to achieve success than starting an independent business from scratch.
Before you get the comprehensive answer to the central question of how to start a franchising business in India, let’s understand why you should choose this business opportunity.
Why Choose a Franchise Business?
Franchising is a popular choice for entrepreneurs due to several reasons:
- Established Business Model: Franchises offer a tried-and-true business model, minimising the risk of failure.
- Brand Recognition: Franchisees benefit from the franchisor’s established brand and customer base.
- Training and Support: Franchisors provide training and ongoing support to ensure the franchisee’s success.
- Marketing Assistance: Franchisees often receive marketing support from the franchisor, helping them attract customers.
- Easier Financing: Banks and financial institutions are more likely to lend to franchise businesses due to their lower risk.
The Process of Starting a Franchise Business in India
Starting a franchise business in India can be an exciting opportunity, allowing you to run your business while leveraging an established brand’s reputation and support. Here’s a detailed and easy-to-understand guide on how to begin this journey:
1. Self-Assessment and Research
Before entering the world of franchising, take some time for reflection. Ask yourself questions about your interests, skills, and financial situation. Understanding what you enjoy and what you excel at will help you choose the right franchise.
Next, research different franchise opportunities available in the market. Look for brands that resonate with your goals and values. Consider factors such as industry, product offerings, and company reputation. Make a list of potential franchises that interest you.
2. Market Analysis
Once you have a few franchises in mind, it’s important to study the local market conditions. Analyse the demand for the specific franchise you are interested in. Consider aspects such as:
- Target Audience: Who are your potential customers? What are their needs and preferences?
- Competition: Who are your competitors? How many similar franchises or businesses are already in the area?
- Trends: Are there any emerging trends in your chosen industry that you should be aware of?
Conducting thorough market research will help you understand if your franchise choice is likely to succeed in your area.
3. Legal Requirements
Franchising in India comes with certain legal responsibilities. It’s crucial to familiarise yourself with these requirements. Here are some key steps:
- Business Registration: Ensure that you register your business according to Indian laws.
- Permits: Obtain all necessary permits and licences required to operate your franchise legally.
- Franchise Disclosure Document (FDD): Read and understand the FDD carefully. This document contains essential information about the franchise, including fees, obligations, and operational guidelines.
Understanding these legal aspects will help you avoid potential issues down the road.
4. Capital Requirements
Next, assess the initial investment needed to start your franchise. This will typically include:
- Franchise Fees: An upfront fee paid to the franchisor for the rights to operate the franchise.
- Setup Costs: Expenses for setting up your franchise, such as renovations, equipment, and initial inventory.
- Working Capital: Funds needed to cover your day-to-day operations until the business becomes profitable.
You should clearly understand these costs and ensure you have enough capital to support your business in the initial stages.
5. Franchise Agreement
Once you’ve chosen a franchise and are ready to proceed, you’ll need to review the franchise agreement. This is a legal document that outlines the terms and conditions of your franchise relationship. Key points to consider include:
- Duration: How long does the agreement last?
- Fees: What are the ongoing royalty fees or any other payments?
- Responsibilities: What are your responsibilities as a franchisee and the franchisor’s obligations?
Carefully reviewing this agreement is crucial to ensuring that you are comfortable with the terms before signing.
6. Training and Support
Most franchisors provide training programs to help franchisees understand the business operations. Attend these training sessions to learn about:
- Business Operations: Understand how to run daily operations smoothly.
- Brand Standards: Learn the quality standards and practices that the brand expects you to follow.
- Marketing Strategies: Get insights into how to promote your franchise effectively.
Taking advantage of the support offered by the franchisor can significantly contribute to your franchise’s success.
7. Location and Setup
Irrespective of your field in the franchise business, choosing the right location for your franchise is vital. Look for a site that is easily accessible and has good visibility. Consider factors such as foot traffic, nearby competitors, and rental costs.
Once you have secured a location, set up your business according to the franchisor’s guidelines. This may include store layout, signage, and branding elements to ensure consistency with the brand image.
8. Hiring Staff
To operate your franchise efficiently, you will need to recruit and train staff. Look for individuals who are not only skilled but also share the values of your brand.
Provide comprehensive training to your staff to ensure they understand their roles and responsibilities, as well as the quality standards expected by the franchisor.
9. Marketing and Launch
Finally, it’s time to launch your franchise! Use the marketing support provided by the franchisor to create buzz about your opening. This may include promotional materials, social media campaigns, and local advertising strategies.
Plan a grand opening event to attract customers and create awareness in your community.
By following these steps, you can successfully navigate the process of starting a franchise business in India and position yourself for success in the competitive marketplace.
After getting the information on how to start a franchise business in India, let’s now move on to learn about a popular and profitable franchise business opportunity in India.
Own a Beauty Skills Academy Franchise with Orane
The beauty industry is a thriving sector in India, offering numerous franchise opportunities. One notable example is Orane International, a leading beauty and wellness training institute. We provide comprehensive training programs in beauty, hair, makeup, and wellness, making it an attractive franchise option for those interested in the beauty sector.
With over 115 beauty schools and a presence in 22 states, Orane is already a large family offering opportunities for women, individuals, and businesses to invest and earn consistent returns while achieving profitability. The franchise business investment at Orane International for the beauty academy franchise starts at about ₹40 lakhs, and you can achieve breakeven in just 18 months or less.
Conclusion
This blog explores the concept of franchise businesses, focussing on a crucial question: How to start a franchise business in India? In conclusion, starting a franchise business in India presents a remarkable opportunity for aspiring entrepreneurs to step into a proven business model with an established brand. Franchising allows individuals to leverage the strengths of recognised brands while minimising the risks associated with launching a new venture. With the Indian franchise industry rapidly expanding and diverse opportunities available across various sectors, including beauty, food, retail, and more, there has never been a better time to invest.
By following a structured approach—from conducting thorough market research and understanding legal requirements to assessing capital needs and selecting the right franchise—you can position yourself for success. Notably, brands like ours—Orane International not only offer robust training programs and brand recognition but also provide ongoing support to help you thrive. Embracing the franchise model can pave the way for a rewarding career, making your entrepreneurial dreams a reality. Whether you are passionate about beauty or any other sector, franchising could be your pathway to success.
