How to start a franchise business in India? Steps you need to follow

Franchise business is one of the fastest-growing business ideas in India. People are investing in well-established brands and earning good money. Here's how you can start a franchise business in India

Starting a new business demands a lot of planning, and the first step is to find the right business opportunity that adds significant value to the life of a customer. The second step is to plan branding, marketing, hiring, and sales. In the end, it comes to making a product strategy and working capital requirements. 

What is a franchise business?

A franchise business is a type of business where the owner allows its business rights and operations to the franchisee. The franchisee is allowed to know the franchisor's business knowledge, trademark and processes.

Beyond using the name and trademark, the franchisee also has the right to sell products or services on behalf of the franchisor. In return for all these facilities, the franchisor will get annual licensing fees, royalties, and some start-up fees from the franchisee.

How to start a franchise business in India?

Here are the steps to start a franchise business in India:

Identify your niche

The first step to starting your franchise business is to identify your niche or identify the industry that interests you the most. This could be anything such as apparel, cosmetics, automobiles, or electronics. You just have to understand the market conditions and do proper market research before finalising any business niches.

Also read: Top 10 Business Tips for Beginners to start their entrepreneurship journey

Find franchisor

After finalising your niche, the next step is to find the best franchise in India and start shortlisting top franchisors who can cater to business needs. Here's why you need to meet the franchisors to understand the business:

• How does business actually work?
• What are the challenges to face while running the business? 
• What are the available business loans available?

Complete formalities

Another important thing here is to complete the formalities with the Ministry of Corporate Affairs after you enter into contracts with the franchisor. If the franchisee is based outside India, then the franchisee needs to connect with international brokers for registration formalities. 

Licensing

Another significant task is to set up a franchise business in India, and in pursuance of this, one needs several relevant licences to open a franchise outlet in the public domain. You can also take expert advice to understand how the licensing process works.

Understand taxes

The other critical thing to have in mind while starting a franchise business in India is to understand the taxation process in India, which is quite different from other businesses. You have to ensure that you have some time to identify the different layers of taxes. If you want to apply for loan assistance, make sure you check the eligibility criteria first and then choose the business that suits you.

Start Operations 

After completing all the formalities and legal procedures, all you need to do is to kickstart your franchise business operations. Just make sure your business is aligned with the franchisor, and that you have received all the necessary details about the business from the franchisor.