Starting a franchise business is better and easier than building a startup from scratch. Luckily, there are plenty of franchising opportunities available today in almost every sector such that practically any business can be franchised successfully based upon different factors.
The phenomenal growth of the Indian franchise industry
Do you know that the Indian franchise industry is expected to hit USD 140-150 billion in the next five years? As per a report by the ‘FranCast Whitepaper on Franchise Forecast 2023-24, the Indian franchise industry is valued at around INR 800 billion and is expected to continue growing in the coming years at a healthy rate of 30 to 35% per annum. India is currently the second-largest franchise market globally. Five years from now the franchise industry in India is looking to touch USD 140-150 billion. Currently, there are 4,600 active franchisors across all sectors operating nearly 2 lakh outlets. More than 300 companies are starting franchising every year, and 53% of all franchises are by multi-unit franchisees.
“Whether you are an aspiring entrepreneur, studentpreneur, homepreneuer, or homemaker, luckily today, there are plenty of opportunities to invest in and start a franchise business.” – Iyyappan, Franchise Consultant
Concept of Franchising
In recent times, franchising has evolved as one of the most promising and popular business options, among both high and low investor groups. Franchising is a process where an individual, known as the franchisee, enters into a legal agreement with the franchisor, who is the owner of a business brand, to sell the products or services of the particular brand under its trademark. The franchisee has to invest to achieve this legal right over the products/services as well as professional training and support from the franchisor.
Iyyappan Rajendran, Founder of Chennai-based Strategizer Franchise Consulting Services says, “Franchises are available in almost all business sectors, which enable one to choose a business that best suits his needs, passion, competence, and investment capacities. If you are tired of making money for others and dream of running an organization of your own, you must consider and evaluate the business opportunities available in franchising.” He adds, “For this, you must first be aware of the various types of businesses that offer franchises. That is quite important.”
Starting a Franchise business is better than creating a Startup, why?
Iyyappan, who has been the franchise consultant to several South Indian brands including Fresh N Juicy, Orange Surgicals, TIK TALK Cafe, MUD Cups, Tea Talkies, 5k Car Care, just to name a few, has 23+ years of experience with the successful completion of 50+ franchise development projects, explains why starting a franchise business is better compared to creating a startup from the scratch.
The main benefit of purchasing a franchise business is that it allows a franchisee to use a franchise’s already-established brand (recognition) to attract a pre-existing customer base. A franchise is a license to use an existing company’s name, trademarks, products or services, and other resources in return for agreeing to use that company’s existing business formats, providing a percentage of the franchise’s income and earnings. An established company, with its products or services, can appeal to a set market, already waiting to buy its offerings!
Working Operations & Procedures
He explains, “When you purchase a franchise, you gain the privilege of not only being able to sell the franchisor’s company’s products or services but also the right to use its established industry practices.” These practices may include training programs, marketing strategies, trade secrets, accounting systems, etc. This cuts down any problems you will encounter in trying to establish business systems on your own.
Lower Startup Costs
Usually, the initial fee of purchasing a franchise is substantially lower than the investment involved in establishing an enterprise from the ground up. Combining this with the pre-established operation formats that will be provided to franchisees, they have saved themselves considerable money and energy.
“Though you are your own boss starting a franchise, in some respects, you will never have to worry about being on your own.”
While the initial advantages of operating a franchise have been already explained, one of the most important aspects of having a franchisee is the fact that the franchisor will provide a franchisor with ongoing support throughout the franchising journey. Iyyappan clarifies, “You will never have to worry about being on your own.”
In addition, most of the financial aspects of running a company will be much more straightforward. The franchisor will be able to provide the franchisee with the details of both startup and operational costs, taking much of the guesswork out of operating a business.
These economies of scale provide a sliver of percentage to make the franchisor more profitable to re-invest in its brand and the services it provides to its franchisees, whilst still providing hopefully lower investment and operational costs for them. A small independent business just cannot run pace for pace with a franchised outlet; they have to work harder and smarter than their franchised outlet competitors.
Iyyappan advises, “When considering any franchise opportunity, you must remember that one of its key advantages over any other small business is economies of scale”. The economies of scale often allow a franchised business to compete head-on with a large corporation with multiple outlets, as they too have economies of scale. Yet, the franchised outlet also often has an owner or operator with the skin in the game.
If you were to rely on a business or a brand, which is local, regional, or national, you should rely on the franchise company, as they have all the advantages including one of the most important of all—economies of scale. Because in the end size does matter, it matters a lot, so think about this!
Iyyappan concludes, “Whether you are an aspiring entrepreneur, studentpreneur, homepreneuer, or homemaker, luckily today, there are plenty of opportunities to invest in a franchise business. At the same time, any brand can be franchised, though its success rate may depend on other factors.”
Call Iyyappan Rajendran at +91-9094142366, visit the website, or email if you are a franchisor looking to franchise your business, a potential franchisee looking for any franchising opportunities, or an investor looking to invest in any franchise.