Starting Franchise Business in India - 12 Important FAQ

Updated On : 22-Jun-2024

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Important Faq before Starting Franchise in India.


Since we mostly discuss regarding franchise business,we thought it would be helpful to our visitors if we discuss important questions and answers.Now before starting or taking any franchise from a company you should keep in mind some crucial facts.It would help you to run franchise business smoothly.If you are not familiar with franchise term you can read our post What is franchise? in details.So lets get started,we have made a list and provide best possible answers.

Q1) How does Franchise chain start?

An entrepreneur opens an owned store and after a successful period, he likes to expand. There would be two steps.

Opening the second and third by hiring new employees and managing centralized operations. He still wants to expand without any cost incurred on stores and daily operations. He might decide to Franchise the business system with the brand established to an individual known as Franchise. He would charge an initial fees and royalty on daily sales.

Q2) How to distinguish the area is managed by a Franchiser or a Franchisee?

It is always very tough to stay as a Franchiser or Franchise would offer the same products and services to the clients because some companies despite opening the Franchises have owned stores too.

Q3) Is Franchise a wide spread?

If we see the consensus there were App – 826123 business establishment in all domestic Franchise system with employment figures of almost eleven million with a payroll of seven hundred billions. The line of Franchiser is 14.7-. 566.7. 18.2. 13.5.

Q4) Business Franchise format?

For managing and operating the business establishment the Franchiser provides a platform of a complete a business plan to a Franchise.

There is a chain of events which is taken care by the Franchiser to provide step by step procedure to manage problem confronted by the Franchise.

The advantage lies in, the system developed is tested and secure with all; flaws rectified with the brand image. This results in a successful venture more quickly then owned expansion.

Q5) Is there any specialized business which companies lend in franchising?

It would be a world of imagination that every business enterprise carrying business when see an opportunity can expand it through Franchise.

Q6) Steps before buying Franchise?

Investigations to be done:

1.l Type of experience required in a Franchised business.
2.l Do you understand the business world?
3.l Would you be able spend quality time?
4.l What Franchise you are looking for?
5.l Who the Franchise is quality back records?
6.l How other Franchise in the same sector is doing?
7.l What cost do you plan to invest in the Franchise?
8.l Financial condition of the Franchiser
9.l What products and services to be sourced and whom to supply it.
10.lTerms and condition of agreement, renewal and running Franchise.

Q7) How to ensure the information provided in the disclosure document is truthful?

Some times criminal penalties can be result of inaccuracy and misrepresentation and there is no way to be absolutely sure but document most likely makes it. But the best question is to study and take out materialistic view by evaluating the information provided in a brief manner. Study the history and growth of your company by keeping in mind every aspect.

Q8) To be a Franchise, how to get started?

Identify company offering the Franchise and the category they are into. Select a category of your interest. You should have good contacts and representatives to represent you in that company.

Step 2 to determine your affordability and place of obtaining Franchise.

Need to learn the Franchise company relationship with all Franchised company in terms of training support. Advice from a professional guy is a must.

Q9) How to ensure a successful Franchise?

The key to running a successful Franchise is following some straightforward steps and having the right outlook.

Choosing the right franchisor

Choose an established company with a proven successful profit record and a good reputation.

Maintain a good working relationship with your franchisor
Communication should be both ways, to and from your franchisor.

Monitor cash flow

Manage your business plan and review the situation in relation to your projections and forecasts.

Good time management is critical.Discipline, planning and flexibility are the keys to success when it comes to time management.

Keep up to date with paperwork

Do not attempt to do all your paperwork for the month in one day. Not only does this become a terrible chore but by the end of the day you are more likely to be tired and make mistakes

Recognize your strengths and weaknesses
It is important you recognize your own strengths and weaknesses. Use them to your advantage

Q10) Is there a possibility of losing money?

There is nothing assured in the directory of business world. Although majority of Franchise are successful but some suffered financial loss. You should constantly check on companies guarantee a specific return or profit. If this claims by company seems to be true. You need to check the track records of the company. Above all, your success would only be through hard work.

Q11) What drawbacks are challenged to own a business?

While there are many benefits to owning a Franchise, there are also some drawbacks.


The first, and most obvious drawback of a Franchise is the cost involved. It isn’t cheap to be associated with a well known name in any industry. Usually the price tag is fairly steep. You must decide if franchising is worth the cost.

Loss of Control

When you Franchise your painting company you lose a bit of your control. You no longer have total control over the way you handle your business. Signs, contracts, money handling, and advertising are all possible areas that may have to change.

Q12) Trends in Franchise?

Internationalization of Franchise:

Due to increasing globalization and competition, the issue of internationalization is becoming more and more important and relevant for companies around the world. With disruptive barriers to trade, investment opportunities and technological innovation, more and more companies are seeing new opportunities for profit and growth internationally.

Women in franchising

Many women who want to start their own businesses choose Franchises rather than entirely new business concepts. Brand new businesses have much higher failure rates than established ones. By investing in Franchises, women are maximizing the chances of success for their new businesses. Good Franchises offer extensive training programs to new Franchisees, as well as continued support for any questions or concerns that might arise during the day-to-day operations of the business.

Technology and franchising:

Technology has changed the face of franchising in terms of operations, training, and marketing. The proper use of technology can revolutionize the way you do business.

With the right mix of technical equipment and systems, your franchise can rise to the top in your industry and keep you there.

Ultimately, opportunity costs arise when you spend more time than spending on tedious and routine administrative tasks.

Today it is much easier to investigate Franchise opportunities via the Internet, and perform the necessary due diligence. Once past initial training, Franchisees can receive operational updates via the franchisor's intranet, and of course, reporting (of sales) through "point of sale" (POS) systems makes it easier for the franchisor to track income for royalty payments.

How a franchise consultant works for you ?

You can indirectly apply for franchise via a franchise consultant.Find out a reputed franchise consultancy firm and proceed with them.Fot better understand lets name it "XYZ" consultant.

Q) Services to investors?

Process of building a Franchise
Information: The hired Franchise consultant tries to understand The requirement of the Franchise. Invest in the field and then in presented with some options and the selected company information is shared with the prospect Franchise.

Evaluating and recommendation:

Then Franchise consultant evaluates financials, location of property and understanding capability. After the evaluation XYZ presents the Franchise with the suitable option.

XYZ then fill in the form of the Franchiser with all details from Franchise and show an invest.

Discovery Day:

After "XYZ" gets approval on credentials of the investor from the Franchise and official visit is organized with the company professionals to evaluate business opportunity understand the mode of operations, financial training for further evaluation of business.

Real Estate:

The major factor that plays a role in recruiting a Franchise is location in the proposed real estate. XYZ visits the real estate location and takes fees and necessary details so that they get the accurate hold of the property and is able to evaluate the foot fall possibility to enhance faster decision.

Final Meeting:

Once the opportunity seems profitable to both the organizers, final meeting is fixed. XYZ would constantly put an extended arm to support all the agreements signed.

Franchise business important faq.Read all questions and an before starting franchise with a company.We have discussed how franchise works and process.

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