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What is franchise ?

Franchise is the practice of the right to use a firm's business model and brand for a prescribed period of time.

Franchisee-Franchisor Relationship

The relationship between a franchisee and a franchisor is a unique one. It is often seen that franchising is described as a parent/child relationship, with the franchisor acting as a parent offering guidance and direction and willing the franchisee to succeed.

While this is true, it can be a little misleading too because that comparison categorises the franchisee into a secondary role. The franchisor is providing a structure for the franchisee to follow, yet it’s up to the franchisee to take responsibility for his or her busiThe franchisor will not jeopardise the greatness growth and success.

er good of the entire franchise system to see one franchisee succeed, especially if that franchisee is on a path that does not adhere to the one laid out by the franchisor. Each franchisee need to understand that he is an independent business owner. And it’s the efforts of the franchisee that will ultimately determine whether he or she succeeds or fails.

There can be a lot of discontent in a franchise relationship due to miscommunication, false expectations, or lack of involvement. If each side does its part, the relationship can be a long and healthy one and can even take the franchise owner from a single-unit owner to multi-unit powerhouse.

Keys to a Strong Bond between Franchisee and Franchisor

The world of franchising is an attractive business model to follow because it offers a proven system with tangible results already in place. It appears to be a “plug and play” scenario where one simply has to add themselves to the system and get success. But like any business, it’s not that simple. So it’s important that a franchise and a franchisor develop a healthy relationship and take it to the next level. There is a lot at stake on each side of the relationship. So let’s take a look at the top five keys to building a healthy, successful and long-term franchisee/franchisor relationship:

• Research Properly

Franchisors should go thoroughly and research every serious prospective franchisee and scrutinise personal and financial backgrounds. They should carefully evaluate each candidate’s potential for success in their system. Similarly franchisees too need to research about the franchise opportunity. They can start with a search online, spend time researching the company, and then talk to existing franchise owners, go on a site visit etc.

• Communicate

In a franchisee/franchisor relationship, communication is key to success. This is about sharing ideas and best practices and having a method for feedback and input. It is having the tools to allow the franchisor to communicate with the franchisee and for the franchisee to provide feedback.

• Right tools to Succeed

Since franchisees are buying into a successful business model, it is important that they have the proper tools and systems to replicate that success. This will include things like: an initial training program, training manuals and franchise support materials, equipment, guidance on staff training and hiring, access to the advertising and marketing programs and materials

• Be Responsible

A franchise-franchisor relationship will be strong when each side fulfills their responsibilities. While the franchisor must provide each franchisee with the necessary systems, materials and training to succeed, a franchisee needs to follow the outlined systems and training and adhere to operational standards of the franchisor.

• Plan things well

The good thing with a franchise model is that the franchisor has already done the groundwork, testing and experimenting to build a successful business model. The company has developed standards that define its brand to the public and has put systems in place to ensure that those standards are met and adhered to by each franchise owner. Now it is important that the franchisees plan things well and don’t rush for success.

Questions Every Franchisee Should Ask before Investing

The franchise industry in Delhi-NCR is on a roll. Be it quick-service restaurant chains like McDonald’s or KFC or salon chains like Lakme, Looks or Monsoon Salon & Spa, there is a sudden demand, with a host of new franchises being formed. As with any other investment, the burden is on you to research a franchise carefully. Here are few questions you should ask before buying a franchise, even an established one. Don’t be afraid to ask about the franchise’s plans:

• Are they planning to open company-owned stores as opposed to franchise outlets? Make sure they can’t put a company-owned store in your territory.

• Will they solicit customers directly via the Internet or a toll-free telephone number? Make sure the franchise will pass on to you any inquiries they may receive directly from customers in your territory.

• Will they offer new products and services through a separate, related franchise under a different trademark?

Responsibilities of Franchisee and Franchisor

A franchisee and franchisor share a very cordial relation with each other. To give a definition, a franchise is an investment in which you pay another business and gain right to use its business model and products. A franchisor is the party granting the right, and the franchisee is the party buying the right. So let’s take a look at the responsibilities these entities have to maintain a cordial business model.

Franchisor Responsibilities

• The franchisor typically helps a new franchisee get off the ground, providing advice concerning location, setup, equipment, staffing, supply sourcing, advertising, staff training, etc.

• The franchisor also gives you required training you need to carry out the day to day work.

• He guides you through various facets of the business and helps you with his experience in the field.

• The franchisor also helps you through large-scale advertising campaigns.

Franchisee Responsibilities

• The franchisee pays the franchisor a startup fee and may be a percentage of future gross revenues.

• The franchisee also follows certain rules set by the franchisor with regard to the business.

• he franchisee also need to maintain certain quality standards, keep prices in line with the franchisor’s overall business strategy.

Looking for the Best Franchise? Here’s what you Need to Know

At a time when individual opinions carry more weight because of social media and the power of the Internet and when information itself is has become a common commodity, we often tend to get confused when it comes to investing in property or business. And more often than make the wrong decision.So before investing in a business opportunity, it’s important that one understands and measures the opportunity rightly. Be it the quality of the brand or its performance in recent time, here are few steps or measures one should keep in mind before investing.

• Quality of End-consumer Product or ServiceIn this age of opportunities, one should always remember that customers are never bereft of choices. They can easily move on to some other brand if not satisfied. Therefore, the end-consumer product or service becomes very important for a franchisee to look for before investing.

• Quality of the Franchise System and MechanismsIt is important that the franchisee you are looking to invest has a transparent system in place. This will help keep all the transactions open to the franchisee and the franchisor, invoking more trust among each other.

• Quality of the FranchisorYou should also know how the franchisor deals with the commitments made. Are they having good leadership skills? Will they provide the needed support? These are few questions that should be clear before signing the agreement.

5 Mistakes New Franchisees Make

We have already discussed some of the common mistakes people make when buying a franchise. Opening a franchise may seem like a simple way to run your own business. But rarely is business simple. Whether you’re looking to open a fast food joint, a gym or even a salon, below are a few nuggets of wisdom to contemplate before taking the plunge.

• Don’t buy a franchise to ‘be your own boss’Franchising is based on conformity and uniformity. As a franchisee, you do not really hold the reins. You may technically be the boss of your shop, but you must follow the rules of the franchisor.

• Understand that franchisors can succeed even if franchisees failThough it’s true that the franchisor can make more money if its various locations do well, they can rake in plenty even when they’re not.

• Imagine failingIt takes confidence and enthusiasm to startup your own business, even if it is an established franchise. Keeping your hopes up can lead to setting aside the idea that you could fail. Do not do that.

• Consider doing it yourself How much are you really getting from a larger franchise organisation? Is it worth the monthly payments to the franchisor? A lot of franchisees come to feel that it isn’t but the reality is the opposite.

• Imagine failingIt takes confidence and enthusiasm to startup your own business, even if it is an established franchise. Keeping your hopes up can lead to setting aside the idea that you could fail. Do not do that.

5 Characteristics of Successful Franchisees

It is often seen that people are confused before buying a franchise. And the most common confusion that they have in mind is what it takes to succeed as a franchisee. What are some of the characteristics or skills that he/she needs to increase his/her chances of success?

This is a right question, and one of the most important things to focus on as you contemplate a move into franchising. There are five key characteristics that can determine your success as a franchisee. They are:

Risk Aversion: Many people think that to succeed as a franchisee, you need to be a gambler. However, that’s not the case. It’s a proven model and success will come soon.

System Orientation: Don’t shy away from franchising because you assume you need a burning entrepreneurial spirit to become a franchisee. That’s simply not true.

Coachability: The motto of franchising is ‘Business for yourself, but not by yourself’. Successful franchisees learn from others in their franchise system.

Hard-worker: Successful franchisees have a willingness to do whatever it takes to get the job done.

Management Skills: Successful franchisees always have excellent interpersonal skills and can effectively interact with their employees and customers.

How to Succeed as a Franchise Owner?

While franchising’s prevalence in the Indian economy indicates that franchisees can succeed, hundreds of franchisees fail each year. And the most frequent reasons for their fall is lack of funds, poor people skills, reluctance to follow the formula, a mismatch between franchisee and the business and poor management. Often, it’s the small stuff that separates winners from losers.Among the most common mistakes new franchisees make is signing on before adequately researching the business. Study what it will take to run the business successfully. And be realistic. Owning a franchise is rarely a get-rich-quick scheme.Choosing the right business to own from the start is enormous. Do your research, call all the franchisees, understand the investment, dig in to all the information you can, and be sure. Make sure you have buy-in from people who will affect your success (husband, wife, partner, etc.). Choose the business you can commit time to building, be a passionate, engaged operator, follow the path laid out for you and make your dreams of ownership successful.Don’t forget: You have to follow the rules, too. Franchises aren’t designed for the independent-minded. They depend on a by-the-book execution of a business plan, adherence to time-tested systems and a willingness to follow directions.

For more information visit : https://www.monsoonsalon.com/franchise/