As a new franchisee, it is very important to work hard towards generating footfall for your store. Advertising can prove to be of great tool in helping you achieve this goal. In case the franchisors brand is a new one, then advertising becomes a necessity and even if the brand is an established one, the franchisee has to spread awareness regarding the presence of the brand in that particular area. Here we list the advantages of advertising for a franchisee

• Awareness
Advertising helps in spreading awareness about your brand in the target area. Advertising will also help in giving information about your product/service which will be useful to the consumer and help him make his purchase. You can communicate your product/service benefits through advertising.

• Recognition
A constant state of awareness leads to recognition. Recognition will in-turn lead to familiarity with the brand which matters a lot when the consumer is making his purchase decision.

• Recall
Constant state of recognition will lead to high brand recall. High brand recall ultimately leads to sales.

• Increase footfalls
Advertising will help you increase footfall in your store. The more time the consumer spends in your store the more likely he is to purchase your product/service.

• Increase consumption
Advertising can also help in increasing consumption. Packaging and presenting the product/service in a different manner can lead the consumer to buy more.

• Brand Building
Not only sales, but advertising also plays a major role in long term brand building. It helps to create a favourable impression in the minds of the consumer.

What should one do, when he/she has a great business idea which he/she thinks will work wonderfully through franchising? Nothing, because after all it’s just an idea and not a business model, Right? No, wrong! In such a case a pilot franchise is the answer. A pilot franchise is basically a franchise, where the franchisor opens and runs his first outlet himself. Pilot franchising has many advantages, let’s have a look at some of the major advantages of pilot franchising

• Turn an idea into a business model
A pilot franchise provides one with the perfect opportunity to turn a good idea into a great business model. In order to sell your business, it’s very important to have a business model, because no prospective franchisee will invest their money in an idea but many will invest in a developed business model. Hence a pilot franchise gives one a great opportunity to turn an idea into a business model.

• Test the Feasibility
A pilot franchise also gives one a great opportunity to test the feasibility and viability of the business model. If a pilot franchise can be run successfully over a long period of time with a continuous growth in business, then the model may be fit for franchising.

• Iron out flaws
Also a pilot franchise lets the franchisor iron out as many flaws as possible in the business model, before he starts franchising his business. A pilot franchise will help the franchisor fine-tune various aspects of his business such as production, finance, distribution, advertising etc. this phase will be the learning curve for the franchisor.

• Continuing Market Research
A pilot franchise also acts as a permanent ground for doing market research. Since you own the store, you can experiment with various new products lines and also provide varied product offerings. You can constantly use statistical data to analyze consumer preferences, habits and taste. Also in a pilot franchise one can also determine the seasonal variation in demand. Hence it acts as a permanent base for market research.

• Good Advertisement
A successful and a well run franchisee is the perfect advertisement for future franchisees. One can use sales figure from the store to entice aspiring franchisees. Also one can invite aspiring franchisees to visit the store and get first hand information about the work culture, customer response, brand image, brand feel etc. A visit to the store is the best way to impress a future franchisee.

In today’s highly dynamic business world, conflicts are inevitable. Conflicts occur due to various reasons such as clash of interest, negligence of duties and lack of communication. A million articles speak about how to avoid conflict, but what to do when conflict has already taken place? How should one try and resolve it? Should one try and resolve it? Yes, one should definitely try and resolve conflict as it is in the interest of both the parties concerned. But how?

• Establish communication

The first and foremost step that one should take in case of a conflict is to establish a communication network. This will show the other party that you are concerned and interested in resolving the conflict. This will also help prevent the situation from deteriorating.

• Identify the problem

Once conflict has taken place it is important to establish the root cause of the conflict. The cause can vary from being a financial one to being an assistance one. Early identification of the problem will help one resolve the conflict in less time.

• Know your rights and duties

In times of conflict it is important to be aware of ones rights and duties. This will help you determine what you deserve and what you don’t. The franchise agreement will also help you list down all the options you have.

• Legal Advice

Take expert legal advice, not to fight litigation but to determine who is right and who is wrong. An expert will help determine whether you are on a strong legal footing or not. A legal advisor will be of great help later, in case things don’t work out.

• Be considerate and listen

In times of conflict it is very important to be considerate and be understanding. It is important to listen to the other party’s point of view.

• Interact!!

After establishing communication, the next most important step is to interact face-to-face with the franchisor. Sit down and discuss the issue with an open mind.

When one finally bags the franchise that he/she so badly wanted, it feels like a dream. But in some cases this dream can quickly turn into a nightmare. This can happen for various reasons, a franchisee after all is only human. He has to deal with the franchisor, his staff, his customers and most importantly his family. Too much or too little commitment to any of the above mentioned factors can lead to a lot of stress. We give the lowdown on the most common stresses faced by a franchisee:

• A dominating franchisor

A dominating or a demanding franchisor can cause a lot of stress for the franchisee. Franchisors, who think that their business model works like magic can often cause a lot of stress by expecting too much, too early. Hence it is important to know the franchisors expectations and clearly tell him your goals and expectations. To reduce stress, constant communication with the franchisor is of utmost importance.

• Dynamic and volatile market

The market today is highly dynamic, and as a consequence the demand can vary wildly. Also constant change needs constant innovation with respect to the products and the services offered. Many businesses can’t withstand this constant demand to innovate, which in turn reduces sales and leads to stress.

• Competition

Often, competition from a good brand can lead to sleepless nights. In such cases the best things to do is concentrate on your business and try and provide your customer the best service possible.

• Family

New franchisees often get so involved in their businesses that they can’t give enough time to their family. Too much involvement can lead one to ignore his family which can prove to be detrimental. Hence it is important to distribute ones time fairly between work and family.

• Intellectual workforce

Today, the workforce is more diverse and more knowledgeable then it used to be before. In the past, workers used to follow orders from the top without putting their own brains to it. Today’s employee is not used to taking such orders blindly and hence this can lead to arguments which in turn leads to a higher rate of attrition.

• Diverse workforce

Also in today’s globalised world, the workforce in diverse in terms of nationality, background, age etc. Keeping this globalised workforce together is a big challenge. Hence it is important to have a common mechanism to deal with the entire workforce. A common method, which does leave some space for customization.

The franchise agreement is the basis on which a franchisee-franchisor relationship is built. Any irregularities in this agreement can be potentially dangerous for both the parties. All business interaction will take place within the framework of this agreement. Also with changing market dynamics, the advantages will keep shifting. Hence it is very important to have a good franchise agreement in place, which has the ability to weather a few storms and also is acceptable to both. There are a million stories of franchises going down the drain just because of a weak or inadequate franchise agreement. So, we give you a list of things to avoid in the franchise agreement.

• Lack of Flexibility

It is important that the provisions in the agreement are flexible and acceptable to both the parties concerned. The agreement should not be one-sided and for this to happen neither the franchisee nor the franchisor should be too rigid. If the agreement is one-sided it will definitely lead to future litigation which is harmful for the business. Hence both the parties should be considerate and accommodating of each others views.

• Ambiguity over accountability

The agreement should not be ambiguous about various issues such as duties of the franchisor, duties of the franchisee etc. The rights and duties of both the parties should clearly be stated, in other words ‘’ who is supposed to do what’’. All the services to be provided by the franchisor and all the fees to be paid by the franchisee should also be clearly stated.

• Inadequate exclusivity clause

This has been one of the major sources of conflict between the franchisee and the franchisor. This is because a franchisor views a new franchisee as profit, while the existing franchisee views a new franchisee in his area as loss. The physical area over which a franchisee has exclusive rights should be well defined. Also the period for which the franchisee has the exclusivity shall be mentioned. The compensation in case of violation of this right should be well stated.

• Ambiguity over royalty and fees

Ambiguity over royalty and daily fees can often lead to conflict as the franchisee establishes himself in the market. Percentage of Commission as well royalty should be clearly stated.

• Lack of a conflict resolution mechanism

In today’s highly dynamic business world, conflicts are inevitable. In such a scenario, the lack, or the absence of a conflict resolution mechanism will definitely spell doom for the business. Hence a confliction resolution should definitely be a part of a good franchise agreement.

Franchising is a business that requires a lot of commitment and hard work. Besides this, one also needs to work as a part of a team and forever be receptive to customer feedback. At times it seems to be one of the easiest form of business and at times a form which requires one to multi-task between a million things. It is, actually a mix of both, but it is a very lucrative business if one gets the hang of it. So today just for you, we reveal some of the things to avoid as a franchisee

Here we go

• Don’t over-analyse
It is very important as a franchisee not to over-analyse your business. Franchisees often tend to look at every mundane aspect of business and then try and come to a conclusion. The truth is that the franchisor is there to do all the analysis, so you should concentrate on the business and make sure you get the desired response. With time, insights will come, but with that ensuring day-to-day smooth running of the business is equally important. At least initially , you should use the franchisors expertise.

• Don’t Ignore
As a businessman it is very important for you to be a good listener. Be receptive to all your stake-holders. Take your staff’s point of view into consideration because they interact with consumers on a daily basis. You might just get some great business insight by just listening to them. Don’t try to act like a boss who doesn’t listen to his employees. You should also listen to the customer as well your franchisor because he has years of expertise.

• Don’t experiment too much
As the owner of the franchise, it is always very tempting to experiment and develop new models and systems of business. But franchising as a business is not about independence but about interdependence. You should operate within the existing business model developed by the franchisor. Too much experimentation can also damage the franchisors brand and this can lead to conflict.

• Don’t deviate from the agreement
Don’t deviate from the franchise agreement. All the business should be carried out within the framework of the franchise agreement. Also, don’t let the franchisor deny you some service which is clearly stated in the agreement. Keep your ego asides, because this is a team-business and you need the franchisor and vice-versa

• Don’t be a Miser
Don’t try to save too much money initially by cutting down on marketing and promotions. This will deprive your business of the publicity it could have attracted which will in turn reduce the foot-falls in your store. Spend money judiciously, but do spend it where it is good for your business even if it is in the long run.

• Don’t be selective
Don’t to be selective while implementing the franchisors business model because it is an already proven business model and that was the reason why you bought the franchise in the first place. Hence apply the franchisors business model whole-heartedly. Be transparent in the way you do your business.

• Don’t think just money
Don’t think just about money, think about taking your business forward and then, money will automatically come in.

After months of hard-work and research, you have finally decided on a franchisor but still having a few hiccups. Then we tell how to best judge, a franchisor. One of the best ways to judge a franchisor is through his franchise prospectus. A prospectus can reveal a lot about the franchisors motives and objectives. A thorough analysis of the prospectus would give one a good idea of the franchisors business. We give you a low-down on some of the things to look for in a franchisor prospectus.

• Franchisors Mission and Vision
The future franchisee should closely look at the franchisors vision and mission because the real motives of any businessman manifest itself in the mission and vision of the company.

• History
It should give details of the franchisors history. This would help one judge the franchisors origins and also help in judging the growth of his business over the years.

• Progress Report
The prospectus should also contain a progress report of the franchisors business. This report should contain various details such as profits margin, sales growth, advertising & marketing costs etc.

• Resources required
The prospectus should clearly detail the resources that should be possessed by the franchisee. The prospectus should list down various criteria such as initial investment, man-power as well as all other requirements.

• Franchisee list
It should ideally contain a list of all the current franchisees and their addresses. This will help you to talk to these franchisees and obtain first-hand information about the franchisors business.

• Advantages of being a franchisee
It should list down all the advantages of being a franchisee.

• Rights and duties
The prospectus should also clearly state the rights and duties of the franchisee as well as the franchisor.

Are you someone, who has already purchased a franchise and now are looking to set things into motion? The initial period in any new business is very critical and the same holds true for a franchised business. The initial period will set the tone for the rest of the journey and hence the beginning is crucial. The saying ‘’ Well begun is half done’’ fits franchising perfectly. The initial phase is also critical because as a franchisee you are very excited as well as anxious and in all this, it is very easy to forget the basics. Hence, we give you a few tips on how to get your new franchise going…

Her we go…..

• Purpose
In-spite of all the brain-storming sessions and the research you went through, it is very important to keep your purpose as well as objectives in mind. Going through your objectives and purpose once before starting would be of great help in guiding your business in the right direction.

• Set goals
Set long-term as well as short term goals, for your staff as well as yourself. The initial period is very demanding and hence it is very important to stay focused. These goals will help you focus your energy in the right direction.

• Staff
Hire the right kind of staff. In order to be the best, hire only the best. Your staff will represent your franchise to the consumer and hence it is very important to hire the right people and then provide them with the right training. Make sure that the franchisor provides your staff with all the necessary training.

• Systems
Put systems and processes in place to ensure smooth functioning of day-to-day business. These systems might be the ones, already developed by the franchisor or otherwise they should be developed by you. These systems will ensure efficient running of the business. These can be in terms of production, delivery, accounting etc.

• Marketing and Advertising
A new franchisee needs to advertise aggressively in order to create recognition in his area of operation. Even in cases where the franchisors brand is well known, one still needs to advertise and market the product well to the target consumer. A new franchisee should have a well thought-out marketing and advertising strategy in order to increase footfalls in his store.

• Legal
You should make sure that you have all the necessary permits in order to ensure smooth functioning of your business. In some states using residential property for commercial purposes is not legal, hence hire a good lawyer and make sure he completes all the necessary legal formalities.

You have already decided that for you, franchising is the way to go. You have thought-out everything, just one aspect remains in question, finance. Procuring finance for your business is a very important activity. Without proper finances, a franchise can’t survive in the long run. Hence raising finance is a very important activity when one is considering buying a franchise.

We list down a few tips to help you in procuring finance for your franchise

• Sort out your own finances
Since loans require big down-payments and high interest rates, it is advisable for one to try and finance much of his business through his own money. For this it is very important to carry out a personal financial audit. List down your assets and liabilities and determine how much money you can put in the franchise. Also this will prove to be of great help, in case you approach financial institutions.

• Apply for a loan
When it becomes clear that you won’t be able to finance the entire business on your own, then apply to a financial institution for a loan. You should apply to such institutions with a thorough business plan. Usually financial institutions will be more willing to finance franchisees than to finance a complete start-up.

• Approach your personal banker
Also in such cases it is good to approach your personal banker because he can provide you good references of commercial bankers. You can also take his help in determining your approach towards raising finance.

• Ask the franchisor
Nowadays most of the franchisors have started providing loans to their franchisees. Although they would not cover the entire cost, they do cover some major costs like purchasing real-estate, purchasing office machinery etc. The finance policy varies from franchisor to franchisor.

• Approach people
Start approaching people with your business plan. Give them some stake in your business in return for the money, which they invest in your business. The list would include corporates, investors, friends and your extended family.

It is every individuals dream to be successful, but very few reach there, why? It’s only, because of planning. Similarly, even in the franchise business, one needs to plan, one needs to have a business plan to be successful. Creating this plan is like building the road to success, only if the road is good, will the journey be smooth. So it is very important to have a very good business plan. But how shall one make a good business plan? We teach you how to make a good franchise business plan

Here we go…

• Objectives
It is very important for the individual to list down his purpose for being in the business. He should also list down his goals and objectives in the form of Mission and Vision statements. These will forever guide you in developing your business in the right way.

• Strengths and Weaknesses
The individual should also assess his strengths and weaknesses. He should clearly list down what he brings to the table. The business will not run on its own and hence the strengths and weaknesses of the owner become the strengths and the weaknesses of the business.

• Resources
It is very important to evaluate ones resources before preparing a business plan because, a business plan can be rendered inefficient due to lack of resources. During this evaluation it is very important to evaluate various resources such as man power, finance, distribution, technology etc. the business plan can only be executed if the needed resources are adequately available. Hence an evaluation of the resources is very essential to prepare a good business plan.

• Research
A good and credible market research should be carried out in the target market. The research should try and assess various aspects such as

Who is the target consumer?
His demographics and psychographics
Number of competitors
State of demand and future forecast
The state of the market

These things will help prepare a business plan which is in-sync with the needs and aspirations of the market.

• Finance
Although finance is a resource, it is such a critical aspect that it deserves to be considered separately. The following questions should be answered with respect to finance

How much money needs to be invested?
How will it be raised?
How will it be spent?
How will it be repaid?

These are things that one needs to keep in mind in order to prepare a good business plan.