Month: October 2019

Important Aspects Of A Franchising Contract

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Franchising is a popular business model world wide and over 21 million jobs in the Us are generated by franchising which is a approximately USD 2.3 trillion industry.

In any venture or business the foundation to security and success is the contract or agreement. While a franchising business will run on organizational ability, commitment and passion the peace of mind will come from having a contract that protects you legally and takes care of your interests.

A franchising contract lays down the rules and is binding for both the franchisor and the franchisee (you). It is advisable to get efficient legal counsel during the buy/sell process of a franchise. An experienced lawyer will help ensure that the contract covers all important aspects of the venture.

The most important/ crucial things are:

1. The purchase agreement must define clearly the franchising package; the services; and the price.

2. The license part must cover: the rights of the franchise; the obligations of the franchisor; the responsibilities of the franchisee; the trade restrictions; the termination conditions and so on.

3. Ensure that the agreement permits you to use patents and trade marks, any secret methods/ formulae, recipes, copyrighted materials, identified suppliers and so on.

4. Understand the franchisee promises. There will be restrictions pertaining to operations, advertising, training, insurance, corporate image, look and feel and so on. Be clear that you will be able to toe the line. If you have any questions clarify them before signing the contract.

5. The contract must define clearly what the franchise package will include. It would cover aspects like equipment, inventory, training, accounting procedures, collaterals and so on.

6. Be clear about what the initial services umbrella covers. These may include site selection assistance, marketing services, setting up on signage, look and feel of interiors and so on.

7. Arrive at an agreement about termination policies. Define the terms clearly. Understand the laws and regulations that apply. Define the minimum advance notice period. The termination clauses should be fair for both you and the franchisor.

8. Make sure the contract includes a assignment/death clause. In event of death a representative or dependant should be allowed to keep the business going.

Before signing a contract it is important to read through a draft contract with an experience lawyer. Know what clauses are negotiable. Determine clearly what your responsibilities will be and find out about what kind of hand holding is on offer. Many franchisors offer help until the franchisee is well settled and understands the ropes. Be sure to examine aspects like business background, litigation history, bankruptcy and insolvency information, and financial statements. Familiarize your self with franchising laws and regulations that apply to your state.

Begin a franchising business smartly and on the right foot understand the pros and cons clearly.

Play School Franchising In India

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The concept of preschool franchising has become an appealing overture for the upcoming class of edupreneurs. Each day more and more people are getting inclined to the education sector as this sector offers immense scope for growth & development. Although at first, opening a preschool seemed a pretty tedious task but with the advent of preschool franchising, it has simplified a lot. Without the franchise model, good quality preschools would have been restricted to limited areas and limited schools. Moreover, the quality of preschool education in our country had been of very poor quality & standards for a long period of time. But with the appearance of so many different companies in the preschool franchise sector, the situation has improved a lot. The franchise model has contributed loads towards the growth and development of the education sector in India.

Usually the parents sent their kids to the nearby play school at their early stages of education. This unorganized sector comprising of neighborhood preschools captured almost 75 per cent of the market as per some estimates. But due to the growing number of preschool franchisees in our nation, the parents inclination towards a branded play school for their tiny tot is on the rise. They prefer to have their kids go to a school which provides them a whole new experience in life & increase their inclination towards education & other co-curricular activities. With the increasing number of people in the middle and the upper-middle class in the Indian society, the number of parents preferring a branded play school for their kids has achieved new heights.

Earlier people were hesitant of entering into the education sector due to the complications of running a school. Around 20 years back, there were hardly any people who were aware of the term franchising. A decade later when several companies were offering franchisees to people, their main concern was to choose whether to own a franchise or run a business on their own. But with the growing number of companies in the preschool sector in todays world, people are mainly confused choosing between various brands offering franchise. Their major worry is to select the right franchisee for starting their school. The idea of opening a school on ones own almost seems impossible in todays world with the numerous options of franchisee available.

Moreover, owning a play school franchise & entering the education sector seems to be the wisest business decision in todays world because the demand for playschools will remain strong. With practically no barriers, growing middle class population, increasing income of the people & the growing number of working women, the education sector is most beneficial to invest in. There is increase in the need for quality preschool educational institutions.

The sector is even more appealing to people because of the flexible work timings. Especially women are much more comfortable & relaxed working in an environment where they can easily manage work & home. Moreover, the people working in the education sector get a lot of regard in the society due to their valuable contribution to the society.

On the part of franchisor, it is definitely a great deal offering tremendous growth. There are not many regulations on entering into the preschool business and it always yields good results & profit. Not just that, it is a relatively safe business proposition due to the low capital investment requirement & the constant returns. Pre-schools are quite evident in society and the success in pre-school arena can clearly predict the success of many upcoming brands and entrepreneurs in this field. So, all these factors result in a constant stream of new franchisors wanting to cash in on this boom.

However, the sector is plagued with the greedy franchisors where the issues spill over into disputes. Major reasons of disputes include over commitments before signing ,not giving each pre-school adequate space, renewal charges on agreements, hidden charges, etc. So, at the time of royalties payment, all these issues surround the franchisor of the school and hamper their goodwill. At the end, all these disputes results in the exit by the players who are unable to reach a critical mass of happy franchisees!

Popularity Of Food-cart Franchise Businesses In The Philippines

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What are the kinds of businesses are popular in the Philippines today? According to many experts, franchise businesses had become a popular trend in the Philippines. And part of the reason why businesses is because of the many new franchise available in the market, such as food-cart and food-stall businesses which are considered today as some of the most wide-spread businesses in the Philippines today.

Popularity of Franchise Businesses in the Philippines
According to many experts, franchise businesses became popular in the Philippines because of the many new franchising concepts which gave Filipinos the opportunity to own a profitable business. This is when food-cart and food-stall businesses were introduced in the Philippine market. And unlike other franchise businesses, these franchises are far simpler and smaller.

Benefits of Small Franchising Businesses
Unlike in the past in which most franchise businesses in the Philippines were large businesses, such as convenient stores, fast-food restaurants, and many more, food cart-and food-stall businesses are smaller, which could only occupy a small space in a high foot-traffic location, such as in malls, shopping centers, bus and train terminals, and even in wet markets and sidewalks.

Because of its versatility and flexibility, these types of franchising businesses became popular among many Filipinos who are looking for a simple business that they can easily manage by themselves.

But other than its simplicity, another reason why food-cart and food-stall businesses became popular is because of its lesser expensive franchising cost compared to other franchise businesses in the Philippines, allowing more Filipinos to have the same opportunities that many wealthier Filipinos have had with Franchising business Philippines.

No Requirements Needed
Unlike larger franchise businesses, which normally requires one to have experience in management as well as have attained an MBA, these small and simple franchise businesses usually don”t require anything other than the franchising fee. And although its more expensive than starting a business from scratch, these businesses, however, can offer Filipinos the profitability that start-up businesses usually lack.

Business Loans for Franchise Businesses
Business loans had also gained a lot of popularity in the Philippines because of franchise businesses. A popular example of those that offer such services is Ka-Negosyo (business-partner) by BPI. It is a branch in BPI which give Filipinos the advantage of franchising a business, or starting their own business, by giving them the capital they needed.

Ka-Negosyo is one of the few popular loan firms in the country that can offer Fast cash loan Philippines which gives them the opportunity to acquire their capital faster compared to other loan firms in the Philippines.

Franchising – Best Profit Solutions In Marketing

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Do your customers love your products & Services & often tell you that you should take your presences nationwide? (Global)

Do you have a unique business concept that if you could just get people to sell it for you know it would be huge hit?

Do you have a great product or service but you are struggling to get / find commissioned sales people that will sell it for you?

There are common questions/ challenges faced by small / medium business owners.

When we try to find strategic Solution to any of above problems one sample solution emerge which answers all above fretrationr for growth the solution ties in franchising our business.

Franchising is a very effective route to expand your business operations in fastest time frame.

Lets see our market place to identify 3 major business brands which are highly successful today in playing a dominant role in the market.

1. Delhi Public School
2. Career Launchers
3. Mothers Pride’s Play School

We know these businesses have grown fantastically taking franchising route to success.
It is very successful at profitable method, why very few small business owners utilized franchise method.
The reasons are given below:-

1- People think it is too complicated

2. They fear they will lose control.

3. They believe it is very expensive

4. They don’t think they have a business that can be franchised.
or
5. Most importantly they don’t know how to proceed ahead. They never got started.

All the above fears are incorrect. The fact is that all businesses can be franchised to grow phenomenally.

There are 10 business areas that make your business ready to franchise route to success:-

1. You need to have good business concept- products/ services. It need not be completely new ideas. Look around to notice how may CAT coaching centers/ playschools are franchised profitably.

2. You need good operational system. This means many of your operations have set procedures/ systems/ methods.

3. Business must be sample to understand. You should be able to teach it to other people in short period of time.

4. Your business needs to make money. If business is not profitable, No point in franchising. You should know if your franchisee can earn at lease 15% profit / return on investment.

5. You must plan by to manage a corporation. You will be managing larger business. So mindset of franchiser and management skills are keys to success.

6. Your business must have some VSP (unique selling proposition) so it looks attractive to investors.

7. Your business must have appeal to people in other cities / regions/ states. The demand of the product must be widespread.

8. Your business plan does not complete with any very large dominant competitor.

9. The inventory used in your business must need finance. You must create financial leverage so it is best to have assets that can be financed.

10. You must be willing to take professional advice you will need to franchise your business.
It is a new give to super success and it has its own rules.

Franchising is a strategic marketing step to expand your business in shortest possible time.

You will be surprised to know that despite downturn in the economy, franchising route to growth has proved successful. Its a winning strategy.

Low-cost Franchises Fetching High Returns

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Buying a low cost franchise is a good option for those who do not have surplus capital to buy and set up a large franchise, as it needs a lot of investment in terms of fees, real estate, marketing, merchandise etc. Low-cost franchises require low initial investment of less than Rs 10 lakh. So aspiring entrepreneurs who were in a quandary due to lack of finances can take a breather and relax.

Franchising offers variety in low-cost franchises

With the evolution of franchising to its present stature, many companies have adopted the franchise route for expansion. Even small businesses which were earlier considered inapt for expansion have taken the franchise route and have tasted success in their journey. Kiosks are the best way to enter franchising in the low-cost way. Apart from taking a kiosk these are the best segments to enter franchising with low investments.

Food industry

F&B industry always gives an impression of a hefty investment for taking any franchise. However this can be quite misleading as there are few segments in this sector which require less than Rs 10 lakh investment. These are:

Juice bars and caf bars: Juice bars are becoming the in-thing with consumers becoming more health conscious. Tropical Sno, Mr Orange, Tornado Cocktails, Juice Lounge etc are some of franchised juice bars which come under low-cost. Similarly caf bars have become popular with more and more people preferring to have coffees and talk. The coffee culture is sure to increase in the future as well. Brewers, Coffee Day Xpress, Cupo Cofe, Caf Desire, etc are few franchise in low cost section.

Bakery and confectionery: This segment also offers great avenues in fetching high profits. Brands like, Waffle Express, Chocolate Graphics, Sweet World, Muffins Bakery, are some low cost attractive options under bakery and confectionary.

Ice-cream parlours: Kwality Walls, MiniMelts Ice-creams, Baskin & Robbins, Royal Ice-cream, Gelato Vinto etc are few some of the popular frozen desserts franchises.

Business Services

Business services also provide a low-investment and high- profit opportunity. Franchising in this sector is growing tremendously. Few segments are given below:

Financial services: As long as people continue to spend money, they’ll need financial services providers to manage finances for them. Financial services franchises are the perfect opportunity for agents, brokers and real estate dealers.

Courier Services: The typical feature of courier service includes doorstep booking, customer convenience and security of each and every consignment that has been entrusted to it. Jaguar Couriers Franchise, Blazeflash Couriers, etc are some of the franchising companies under this category.

Cartridge refilling: In the modern age of I.T, there is a constantly growing need of cartridge re-fills. A cartridge refill franchise offers to its users quality refills at a fractional cost. Current industry trends and future projections suggest that printer cartridges demand will continue to multiply at a very fast pace. Cartridge World, Cartridge Caf, Cartridge Xpress are some of the good low-cost franchise options.

Consumer Services

Services like, dry cleaning, matrimonial alliances, tour and travels fall under this category.

Dry cleaning services have come under the fold of franchise business in the last few years, and some franchisors are: White Tiger, Wardrobe Franchise etc.

Matrimonial sites: Matrimonial web sites like Shaadi point and Shadilagn are getting increasingly popular these days, and are offering franchise at low cost.

Travel companies: With the economic upliftment of the common people in last two decades, the tour and travel industry has witnessed a phenomenal growth. Some of the franchisors offering low cost opportunities are East Trip Planners, Mahindra Holiday & Resorts, Arzoo.com etc.

Retail franchising

Retail sector is another low cost franchise option for aspiring franchisees.

Artificial jewellery: It can be the best alternative to precious jewellery, if one has the interest in it. Trenz, Dia Gold, Silver Maya etc are some costume jewellery franchises.

Florist is another category calling for low investment. Ferns n petals, Florists, Fiore and many other companies are offering opportunities in setting up a florist franchise.

Before opting for any of the above options, clear all your doubts. Apart from your initial investment, take into account the ongoing costs that must be paid to your franchisor, including franchise royalties, marketing fees and other required purchases. After you are convinced go ahead and make your mark in the franchising arena!

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