What are the Types of Franchises Available in India?

. 7 min read
What are the Types of Franchises Available in India?

Details on investment and opportunities

India ranks third in the consumption of products and services globally. It is an excellent opportunity for an international brand to open its franchise in India. Beauty, education, automobiles, wellness, fashion, and medicine are the most demanding product ranges in India. There is a different small franchise business that is working in another part of India.

India is a hot market for the best franchise business. The main reason for the expansion of the franchise business is that both the franchisor and the franchisee meet their business goals successfully.

Before investigating some types of franchises in India, it is essential to understand the franchise business and how to start it.

How does franchise business work?

There are two elements in the franchise process: one is the franchisor, and the second one is the franchisee. As everybody knows, that franchise business is different from other businesses, because, in this type of business, an international company (Franchisor) opens their company branch on the same name, but under other's (franchisee) supervision. This franchise business works in different concepts. The franchisee gets structural, legal, conceptual, and advance training help from the franchisor, and gives royalty charges to the franchisor.

Both the franchisor and franchisee gain benefits from the franchise business. When the franchisee gets control over the franchise with the practical and legal support of the franchisor, then the franchisee can work independently. After establishing a franchise business in other countries, the franchisor can expand business and revenue with the help of the franchisee.

Before proceeding with the franchise business model, it is essential to take care of legal documentation. Such a type of business model is secure for both because both parties have promoted the brand. And both can gain significant benefits from it.

Some significant types of franchise business in India: Many franchise business types own well-known brands and expand in India. Indian market is vast and open for everyone, so international companies approach Indian people to connect with them for open franchise business in India. These types of franchises business are as follows -

1. Manufacturing franchise

In this case, franchisees are free to produce the same products with the legal authority and promote it in the market with the owner's confirmation. The franchise can also give advertisements in national broadcasts and other mediums of promotion of his manufactured product.

In this model, the franchisor company will provide franchise fees and all-expense incurred by franchises for manufacturing the product. The specific business has allowed doing such types of a franchise that add all conditions in the agreement. The food and beverage industry is an excellent example of such a type of franchise business.

2. Product franchises

Product franchises are different from other franchise businesses because, in this type of business, franchisees use contracts to decide the distribution of the products. It works on the supplier-dealer model in which franchisees distribute franchisor’s products. Franchisors only give their brand name to the franchisee.

For example – If the franchisee manufactures the cake and gives the name to the franchisor brand, the franchisee can distribute the cake where he wants to sell it. The franchisor will not influence him.

The franchisee will pay some amount to the franchisor mentioned in the agreement. Such franchise businesses usually deal in significant products like vending machines, car spare parts, equipment, etc. Such types of franchises give big sales and excellent benefits.

3. Business franchise ventures

Business franchise ventures are such a type of franchise business where franchisees purchase products or services from the franchisor and sell it. The franchisor will provide customers leads that franchisees have to maintain for future trade. The best example of such a type of franchise business is vending machines. The franchisee purchases it from the franchisor and sells it to the customer with the service promise after the sale.

4. Business format franchise

It is the most popular franchise business in India. In this franchise, the business franchise gets a proper business structure made by the franchisor. The franchisor will provide appropriate training to keep the business going and get a royalty fee against it.

The franchisor is also liable to provide product and raw material frequently without compromising the product quality. Everything will be mentioned in agreement which can help both sides to proceed with their business. It is the safest way to do franchise business. The best example of such an industry is retail, fitness, fast food, business services, and restaurants.

5. Investment franchise

This is a high-level franchise business because it needs a massive amount of investment. Usually, franchisees invest money in it and hire their own staff, or else franchisors help franchisees for investment and benefits from it. Examples of such franchise business are restaurants and hotels.

6. Job franchise business

This is a low-cost franchise opportunity; it means the franchisee can run it from home. Anyone can start a franchise business alone and begin a job franchise business. Such types of franchise are generally handled by one person, and they ensure the selling and purchasing of the product. Usually, franchisees are required to buy small quantity stock and a vehicle for distribution. Job franchises businesses are widely spread everywhere; some examples are – coffee vans, drain cleaning, travel agency, commercial cleaning, domestic cleaning, real estate service, event planning, mobile phone part repairing, and many more.

7. Conversion franchise

Conversion franchise is an adjustable relationship between the franchisor and the franchisee in which many models exist for building a business as a trademark. This type of business develops in the franchise industry and takes all training programs, marketing, and promotional programs in franchise units. In this way, franchisors gain more royalty fee and ensure the growth of the brand. Examples of conversion franchises are home services, real estate brokers, etc.

Conclusion

Many franchise business models provide lucrative deals for franchisees and franchisors. The Indian market is open for all types of business, and franchise business is one of the hot business ideas in India. Small and big companies open their franchises to get royalty fees and establish their brand in other countries. The most important thing to understand is that a franchise business depends on recall value, brand name, market, etc. Investment is a must, whether it is in a small amount or a significant amount. If you get success and grab a franchise opportunity, you need to investigate all factors and demand of the product and services.

Also read:

1) Things You Need About Franchise Business In India
2) How Does the Franchise Model Work?
3) Franchises: What Differentiates them from Businesses "From Scratch"?
4) How To Start Your Own Franchise?
5) OkCredit: All you need to know about OkCredit & how it works.

Stay updated with new business ideas & business tips with OkCredit blogs in English, Hindi, Malayalam, Marathi & more!
Download OkCredit now & get rid of your bookkeeping hassles.
OkCredit is 100% Made in India.

FAQs

Q. What are the standard franchise terms?

Ans. There are some term associates with a franchise business, which are as follows-

  • Disclosure statement
  • Business format franchise
  • Franchise disclosure document (FDD)
  • Franchise
  • Franchisor
  • Franchise agreement
  • Franchising
  • Royalty fee
  • Trademark

Q. How much capital do I require to purchase a franchise?

Ans. Every franchise has its terms. Money for investment also depends on the type of business you want to do. It could range from INR 20 thousand to crores.

Q. Most common franchise business in India?

Ans. Some categories are highly recommended for doing franchise business; some are as follows –

In service sector –

  • Carpet cleaning
  • Home repair or reconstruction
  • Maintenance and cleaning services
  • Home furnishings

In business assistance services –

  • Advertising services
  • Accounting
  • Backend services
  • Mail processing
  • Printing services
  • Package shipping
  • Personnel services

Other franchise business –

  • Hair salons
  • Automotive services and repairs
  • Health services
  • Environmental services
  • Clothing stores
  • Children’s services
  • Mobile and computer parts repair services

Q. Can purchase a franchise make me rich?

Ans. Nobody can predict how the business will run and stand. If you handle a franchise business independently with a good income at that time, you can only get the confidence to run a franchise business. The great way to become rich with the franchise is to choose the right company for the franchise and research it with existing examples.

Q. Can I start a franchise business without any investment?

Ans. No, you can't start a franchise business without any investment. You need to pay some advance fees to start a franchise business. Franchisors always need money to use their brand name.