12 Tips for businessmen to become a Franchisor

The main criterion for identifying a potential franchisee is knowing whether the potential franchisee holder has the capital required to start a franchise. Similarly, is their location correct? This will allow you to evaluate the potential for profit. There should also be a clear discussion on how much royalty should be paid in which period. If you are a business and you want to expand your brand in a franchise way, then I must consider the 12 tips given below.

1) Vision and Goal: The franchisor needs to have a vision for his brand. Brand Vision is the foundation of the brand’s core existence and the ultimate goal for franchise expansion. E.g. A vision for a pizza chain is to serve the best quality pizza not only in our country but globally. The mission of the brand is to take corrective steps to make this vision a reality. Also some short term goals have to be set. E.g. Where will your franchise store be? In order to successfully expand your brand under the franchise model as well as create a sure process to increase the number of franchisees, it is necessary to make a good plan by thorough study of the company’s vision and mission.

2) Business Franchise Registration: Once the brand has set its goals and strategies as well as builds a good franchise model, it becomes easier to start a franchise. The brand then has to formally register its project in accordance with government policies to complete all legal formalities and obtain legal protection.

3) Requirements for brand registration:

• Brand Name: You need to have a brand name that matches the product / service for which your business is known. This will make your brand known in the market.

• Trademark: It is a recognizable symbol, design or sentence, which highlights the company’s products / services as well as the brand name. It also provides protection against unauthorized use and sale of your products / services. An individual, business association or any legal entity can be a trademark holder.

In addition to brand registration, private limited or proprietor registration, domain registration, social media presence, etc. are also required. A single name domain name is useful for brands, because it instantly identifies the brand’s products / services at any location. And also attracts the attention of customers.
• Social media Presence: In today’s world of modern technology, the brand’s social media presence is important. This has made it possible to promote the brand rapidly.

4) Prototype Development: This is an important step before expanding the brand through franchise model. That is prototype development. You need to have your own store for at least two years before you can develop a franchise model. A franchisee consultant can create a good franchise plan according to the functionality, rules and functionality of this store. If you do not have such a running store outlet, it is always a good idea to install it first and keep an eye on it. This will help in analyzing the performance of the brand and the necessary improvements.

5) Franchise Business Plan: When creating a franchise business plan, your brand needs to be the right franchisee. This business plan should include the definition of demographics to determine the exact location of the customer. Depending on the population, your business needs to be able to meet the demands of customers as well as the market.

6) Franchise Financial Model: It is important to make a financial plan for the franchisee. Create financial predictions that are beneficial to your brand and franchisee. Similarly, the required investment amount for a new franchise outlet has to be fixed. Thereafter, the calculation of return on investment (ROI), revenue generation profits and other financial matters should also be determined.

7) Franchise Model: There are four types of franchising models.
1) FOFO: (Franchise Owned Franchise Operated)
2) COCO: (Company Owned Company Operated)
3) FOCO: (Franchise Owned Company Operated)
4) COFO: (Company Owned Franchise Operated)
You can choose any of these suitable models for your brand. In order to decide this, factors like financial plan, customer, population etc. should be considered.

8) Franchise Profiling: The process of defining the roles and responsibilities of each franchisee and evaluating the work done by them daily, every month or every 15 days is called franchise profiling. The franchisor needs to understand the skill set required for the business, so that the franchise outlets can be successfully handled and operated successfully.

9) Franchise Marketing: It is important to understand which marketing platform is good for bringing your brand to the market. You also need to understand what marketing strategies to use to get the best potential leads for the franchisee. There are many options available for this, such as placing advertisements in franchises, portals, exhibitions, newspapers and franchise journals.

10) Franchise Agreements: The franchise agreement is the most important document between the franchisor and the franchisee. So the franchisor should create the franchise documents in this way, which states that both parties to the franchise have equal rights to handle the franchise separately.

11) Franchise Manual: The document prepared by the franchisor to understand the functionality of the franchisee is the franchisee manual. It has to include details about the operations of the franchisee. This manual defines the training provided to the franchisees and the training details provided to the participating employees.
The Franchise Manual guides the franchisee and its employees on the ethics of the brand, its business type and its responsibilities.

12) Commitment: Both the franchisor and the franchisee should be committed to make the franchise work successfully. In order for a brand to establish itself in the market, to survive in the market, and to operate in times of recession, both parties need to agree. The role of both the franchisor and the franchisee is important. This is clear from these 12 points.

As franchise consultants in Mumbai, we at Franchise Birbal always provide individual attention to our clients and help them to establish franchise businesses both in India and internationally. Franchise Birbal helps franchisees start, grow, and protect their franchises. By developing a franchise business with us you get the assurance that you will be able to establish your franchise business successfully. Our franchise consulting and legal documentation services start from Rs. 15000/-* onwards.

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