Is franchising a good decision? If yes, how to do it right?

Entrepreneurship is both exciting and exhausting. It is exciting because you are creating something new and venturing into untested waters. It is exhausting because of the massive efforts that go into launching the business. Evaluating a business opportunity is one of the most tiring tasks, both intellectually and in terms of time and money involved. And at the end of it, you may still not get the picture right. Franchise opportunity owes its rising popularity to its ability to make this task superficial. A franchise offers research insights, market opportunity, and a proven brand if you are willing to invest.

Franchise opportunities are on the rise in non-metros. The chances of expansion are also much more in these small towns and cities. In fact, given the rising incomes, growing urbanisation, younger population, and availability of skilled labour, brands across all categories are expanding to Tier-2 and Tier-3 cities and looking to have their franchise store.

Choosing the right franchise is a trade-off between the brand category and the personal -area of interest.

Reasons that make franchising model the right choice


Franchising is not a new business model in the market. It has been there since ages. Take the examples of Bombay Dyeing, S Kumar, Raymond, BPL, LG, Samsung etc., who have their franchise network successfully spread over the Tier-2 and Tier-3 cities. If we talk about Bombay Dyeing particularly, then it adopted the franchise model way back and built a network of more than 600 franchisee retail outlets across the country.

Even today, franchising is considered to be one of the best ways to expand the business and this is demonstrated by the new-age brands like McDonald’s, Cafe Coffee Day (CCD), Eurokids, Subway, Dominos etc. Take the example of the Indian startup CCD which began with its first outlet in Bangalore. Today, this coffee chain is present in more than 220 cities including small towns. In fact, today companies are not only targeting Tier-2 and Tier-3 cities but brands like Raymond are looking to expand their franchise network in Tier-4 and Tier-5 towns as well.

Here are some of the benefits of taking the franchise of a reputed brand.

  • It is a successful business formula and you can reap significant revenuein the near future.
  • You can expect the best support from the franchisor in terms of branding, training support to your staff, systems, and processes to run the business smoothly et al.

Approaching the franchise opportunity, the right way

1. Choosing the right brand category

First, you need to decide on the brand category as this impacts your growth and margins. This decision lies at the cross-section of your personal passion and the opportunities available in the market. You will invest a significant amount of time and money in this venture, so if it does not excite you at a personal level, you may lose the energy to keep it growing.

2. Searching for the right opportunity

Once you have arrived at the likely areas in which you want to operate (food, education, apparel, healthcare, consumer goods, etc.) it is time to start looking out for the right opportunity in those categories. offers a complete section dedicated to franchise opportunities.

3. Discuss with franchisors

You need to shortlist all the franchisors that you feel are appropriate for you. Then prepare a proposal and get in touch with them. Franchises of reputed companies are always in demand. So you need to stand out from the crowd if you want the franchisor to read your proposal carefully and trust you with his brand. Business advisors on can help you prepare a compelling proposal.

4. Formulating the business plan

It is very important to formulate a business plan which meets the requirements of the franchisor. You may need professional help at this stage to ensure that your business interests and those of the franchisors are completely aligned. Financial planners on can help you prepare a strong business plan that foresees and factors-in future risks and opportunities.

5. Making financial arrangements

The major investments include the initial deposit to be paid to the franchisor and the cost of setting up (land, construction, design, finishing etc.). Take the help of advisors to draw a map of all investment needs and the sources of funds.

6. Sealing the contract:

Finally, it is time to sign the contract and begin your dream of becoming a franchise. A comprehensive review of all the documents with your legal advisors is a must at this stage. Do not leave anything to chance. Things that are discussed and agreed upon verbally will not stand the test of law, in case of an eventuality. People working with franchisors also move on to different organizations. The best practice is to reduce everything in black and white.

The entire process of taking up a franchise is long and tiring. Going with the right consultants will help you stay focused.

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