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If you want to grow your brand in India rapidly, franchising your business is a good way to start. However, whether you should convert your brand into a franchise or not requires some serious thought.<\/p>\n\n\n\n
Are you planning to license out franchisees of your brand? If so, here are the two things to consider before going down this road.<\/p>\n\n\n\n
There are several franchisee models in India. These include:<\/p>\n\n\n\n
If you want to award franchisees by outsourcing the actual process, choose this model. Here, you can grant exclusive rights to a local entity to establish your franchise network. However, when you outsource your franchise development process, you must back your vendor with a significant monetary investment. If you fall short on funds, you can opt for a business loan<\/a> to ensure you can timely invest in brand scalability through master franchising. <\/p>\n\n\n\n In such a case, the outsourced company becomes the master franchisee responsible for doling out your franchisee to individuals who want it.<\/p>\n\n\n\n This model works much like the master franchising one, except it covers only specific geographies. Here, you can award exclusive franchise distribution rights to a state-specific entity. Given that different states in India have their own set of rules and fees for licensing, you can leverage this approach for seamless expansion.<\/p>\n\n\n\n Additional Read: <\/strong>Can you get a business loan for opening up a franchise in India?<\/a><\/strong><\/p>\n\n\n\n As you may have guessed, direct franchising is when a brand directly establishes its network of franchisees. If you feel confident about preparing a revenue model, policy documentation, and adhering to legal compliances, this model is for you.<\/p>\n\n\n\n Here you retain more control over what is happening and how than other models. However, this model can prove to be challenging if you plan on taking your brand abroad. <\/p>\n\n\n\n Presently, India does not have specific legislation governing franchises. Simply put, as a franchisor, you won’t come across many restrictive laws. However, there are a few scattered regulations you need to comply with before entering into a franchisor-franchisee relationship. These include:<\/p>\n\n\n\n \u00b7 The Indian Contract Act, 1982<\/p>\n\n\n\n \u00b7 The Designs Act, 2000<\/p>\n\n\n\n \u00b7 The Trademarks Act, 1999<\/p>\n\n\n\n \u00b7 The Foreign Exchange Management Act, 1999<\/p>\n\n\n\n \u00b7 The Copyright Act, 1957<\/p>\n\n\n\n \u00b7 The Consumer Protection Act, 1986<\/p>\n\n\n\n \u00b7 Income Tax Act, 1961<\/p>\n\n\n\n \u00b7 The Arbitration and Conciliation Act, 1996<\/p>\n\n\n\n \u00b7 The Competition Act, 2002<\/p>\n\n\n\n \u00b7 The Patents Act, 1970<\/p>\n\n\n\n So, before drawing up your franchising contract, make sure to go through these Acts or have your legal department review them.<\/p>\n\n\n\n Additional Read: <\/strong>Tips & Tricks to Grow your Business<\/a><\/p>\n\n\n\n Once you’ve got your entry strategy and legal compliances sorted, it’s time to start franchising your business.<\/p>\n\n\n\n If you are already all set with these two tips but need finances for franchising, turn to Tata Capital and get a loan at competitive business loan interest rates<\/a>. We extend business finance at flexible repayment terms, minimal documentation, and relaxed business loan<\/a> eligibility criteria.\u00a0\u00a0\u00a0\u00a0<\/p>\n\n\n\n Whether you require funds for starting a franchise or for daily working capital needs, we\u2019ve got you covered. So, don\u2019t wait any longer! Instead, use our business loan EMI calculator<\/a> and chalk out your business plan today.<\/p>\n\n\n\n#2 Regional franchising<\/strong><\/h3>\n\n\n\n
#3 Direct franchising<\/strong><\/h3>\n\n\n\n
Ensure legislative compliances<\/strong><\/h2>\n\n\n\n
The final word<\/strong><\/h3>\n\n\n\n