| One of the business options open to India's first time or | | | | franchisors adopt different models. We know that (at |
| small entrepreneurs is to take up a franchise. Buying a | | | | least some years ago) leading garment retailer Arvind |
| franchise of an established brand is a good alternative | | | | would place goods on consignment and pay |
| to starting on a new idea from scratch or could offer | | | | franchisees a commission on the value of the sale. On |
| a faster way to take an existing business to the next | | | | the other hand, the training and education company |
| level. | | | | CADD Centre charges a territory based flat franchise |
| This option offers several advantages - not the least | | | | fee, regardless of volume. |
| of which is an opportunity to latch on to a tried and | | | | When you start negotiating, the franchisor is likely to |
| tested model. A well established franchise brand also | | | | sell you some dreams and their ROI calculations will |
| affords instant visibility, and with most rules being laid | | | | likely focus on initial franchise fee, royalty payments if |
| out already by the franchisor. | | | | any and capital expenditure for setup. However, |
| However, you need to consider several factors before | | | | remember, that the business is not likely to pay for |
| deciding on a franchise business: | | | | itself for a while, so the ongoing requirements will be |
| Start with the motive - Prioritize your reasons for | | | | substantial. Don't take it up unless you have the |
| wanting to enter this business. What do you expect to | | | | resources to hang in there for three years. If you still |
| get in terms of return on investment or annual income? | | | | have conviction in the idea, but are strapped for funds, |
| Most important, do you have the commitment to go | | | | rope in some partners; in any event, don't start still you |
| the distance? It is very important to be sure that you | | | | have enough resources. |
| really need the brand to make a business. Many | | | | Be sure you can handle it - Even with a franchise |
| franchises are generic in nature, and not much is | | | | business, some basics don't change. As with any |
| offered by way of specialized knowledge or support. If | | | | venture, the success of a franchise will depend on |
| there's a chance you can enter the business by | | | | whether you and your team have the requisite skills to |
| yourself, minus all the franchise costs, maybe it is | | | | run it. A good franchisor is choosy about who they |
| better to go it alone. | | | | sign up as a franchisee. In the same way, you should |
| Don't do it unless you have adequate funds - The | | | | choose a franchise opportunity that draws upon your |
| better known brands come at a hefty price. The | | | | capability or passion or leverages the strengths of the |
| annual franchise fee itself can run into several hundred | | | | existing business in some way. |
| thousand rupees, and will vary with territory. Different | | | | |