How to Take any Business to a Franchise Model?

Franchise business is in craze these days. Starting from the USA to India, every business values a good franchisee model. If you’re reading this, then I am sure you also want to be a part of this Franchise world. Before understanding the ‘HOW’ to build Business Franchise in India let’s get our basics clear with our two Ws – What and Why. Let’s understand What is a Franchise.

Once again if you’re here and reading this, you must be knowing about Chai Sutta Bar – one of the fastest-growing startups in India. Also, this very tea cafe is known for its franchisee model. More than 80% of its cafe are owned and operated by franchisees.

An established brand here like Chai Sutta Bar, referred to as the “franchisor,” grants permission to an independent business owner, known as the “franchisee,” to use its branding, business model, and other intellectual property. This is known as franchising or a business franchise model. In exchange, the franchisee consents to pay the franchisor an initial franchise fee as well as monthly royalties.  

Franchise Business In India

Here are some facts about Business Franchise in India:

  1. The franchising industry in India is growing at 30-35% every year.

     

  2. India is already the second-largest franchise market in the world, after the US, with over 4,600 active franchisers.

     

  3. In India, there are 4,600 active franchisors across all sectors with a special focus on the restaurant and cafe business.

     

  4. Almost 30% of the Business Franchise in India is occupied by the food service sector. 

Although there are various kinds of franchise business models, three of them are the most popular. They are as follows:

Product Franchise: This type of franchising module is the oldest in the market. Here, the franchisees only sell or distribute the franchisor’s products in this arrangement.

Manufacturing Franchise: This business model grants third-party producers a kind of exclusive right to create and market goods using the trade name and trademark of the franchisor.

Business format Franchise: The most typical kind of franchise agreement is this one. In this business arrangement, the franchisor permits the third party to operate under their brand and employ their business strategy in return for fees and a recurring share of sales revenue.

Under this approach, franchisees are managed following the policies and regulations of the parent company. A Business Franchise in India mostly runs on this format or module. 

There are many advantages of franchising in this model. For instance, Cafe Franchise is in the boom these days in India due to the many advantages of this model.  

Here we have summed up a few of them for your understanding:

  1. Working with a well-known brand: A powerful brand will increase client loyalty, open up more sales prospects, and give your company a competitive edge.

  2. Risk reduction: When working with a reputable franchisor, your business’s failure risk is far lower than when beginning your own.

  3. Easier procurement procedures: A further benefit of franchising is having access to superior suppliers and better prices. This is crucial for the uniformity factors. Even, we at Chai Sutta Bar always provide our franchisees with the best kulhads and supplies. 

  4. Marketing: You won’t need to worry about marketing or advertising because the franchisor will run advertising campaigns and promotions that will be advantageous to your company. Additionally, the franchisor will study the greatest probable locations on the market and share the results with you. This is true with most business franchises in India.
     
  5. Low operating costs and excellent organizational standards: The franchisor will train you and assist you in choosing the best tactics for running your company’s operations efficiently and affordably.

What Benefits Does the Franchisor or Businesses Receive from Franchise Business in India?

Firms can use a variety of incentives to adopt the franchise model. For the franchisor, franchising has the following advantages:

  1. Franchising is a source of funded expansion to new and desirable places. It takes a lot of time and money to start and run a new branch to expand the business. With a franchise business model in India, new locations and appealing markets become feasible for business owners.

     

  2. Franchisees invest their capital to open a business in a desirable area rather than franchisors investing their own money in market research.

     

  3. Businesses can earn extra money through continuous royalties. Through license fees and regular monthly/quarterly royalties from the franchisee, the brand can make money and invest in more R&Ds as well as in marketing.

     

  4. Through franchisees, franchisors have access to more advertising power. Even more, the franchise business model enables the brand to enter arenas that would have been challenging for them to enter otherwise.

Now, let’s focus back on our real question that is – How to turn any business into a franchise model?

 First, we need to understand what kind of business gets into good franchise models in India. Owners mostly look for franchisees of restaurants, cafes, electronics, and others. Tea shop franchises like Chai Sutta Bar give a very good return to the Franchise owners. 

Here are a few steps to elevate any business into Business Franchise Model in India:

  • Demonstrate Leadership:

Leadership is crucial, whether franchisors are just getting started or managing an established business. Franchise business in India depends on brand power.Both franchisees and any team members will require guidance and assurance that issues are resolved, fresh ideas are implemented, and teams are managed for peak performance. Even brands need to show their organizational and leadership skills to earn the trust of franchisee owners.

  • Be visionary:

A business franchise in India needs a clear vision of the parent company. Where is the company going? What will the franchise’s future look like? How can franchisees feel secure in their investment in a forward-thinking company? The franchisor must have a vision and make sure that everyone in the company can see it. Just like we have the vision to make everyone kiss the soil of India while sipping tea from Chai Sutta Bar’s Kulhad Chai.

  • Develop communication clarity:

When it comes to promoting the company’s mission, turning the company’s vision into actionable steps, explaining a restructure, introducing new procedures, informing franchisees of marketing campaigns, updating manuals, and sharing team and franchisee successes, franchisors’ ability to communicate with all stakeholders in the business is essential.It is advantageous for franchisors to introduce transparency and open communication channels to the franchise model since poor communication or lack of communication is frequently identified as a cause of franchisee unhappiness.

  • Create a reliable system:

Any high-performing business franchise model will be built on a solid structure that can withstand the ups and downs of a business cycle. Franchisees will want to invest in an effective system, that yields profits as they are simple to sell has a dedicated network of franchisees, and has dependable support staff. Additionally, they will require manuals, training, and marketing efforts to run their firm. As a parent company, we need to provide all kinds of support to our Franchise owners.

  • Make franchisees superstars:

Who is the best ambassador for the brand? Franchisees that are content and successful draw in customers, promote the brand, demonstrate the system to potential franchisees, surpass goals, and receive recognition.It makes it logical to elevate the franchisee team to the position of the star of the company. For this reason, we consider our Franchise Owners as part of the Chai Sutta Bar Family.

  • Understand what makes the real difference:

What distinguishes a strong business franchise model in India from an ordinary franchise business? The little differences and walking an extra mile are what set great performers apart from the average. Whether it’s paying close attention to detail in-store, having a customer-service mindset, tracking COGS, cutting waste, streamlining workflows, offering real solutions, or reorganizing finances will make the difference.

  • Invest in Young Team:

Numerous franchisees outlive franchise support teams. Of course, these franchisees are priceless because of the knowledge and expertise they provide to the company, but it’s advantageous to have a diverse group of franchisees.Younger franchisees can help the firm grow as well; their passion, vigor, fresh ideas, openness to learning, and ambition all contribute to the success of the franchise system.

  • Share your enthusiasm:

Business Franchise’s ability to dream will be facilitated by franchisors who can exude enthusiasm and share it with franchisees and the support staff.

Dreams also motivate us in our daily activities. It is these dreams that built up a successful business franchise model in India.

These are some tips that can make any business into a successful Franchise module just like ours. These days, young Indian minds had seen this franchise business as a big opportunity in India as well as the international market. This idea prompts the Chai Sutta Bar Franchise to open more than 500 franchise locations across India.

The chai franchise business model used by Chai Sutta Bar is a wise choice since it offers cheaper CAPEX and higher returns. The truth is that the most successful franchise brands, Indian or global, are the ones that are contemporary, relevant, and reflective of modern consumer preferences.

chai sutta bar, chai chain

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