Starting a franchise business. Franchise: how to open, features, pros and cons. Franchise VS self-discovery

01Jun

Hello! In this article, we will talk about starting a franchise business.

Today you will learn:

• What are the benefits of running a franchise business?
• What is the best franchise business to start.

What is a franchise

Let's start with the main thing - the definition of a franchise.

Franchise - a set of benefits that allow a legal entity or individual to use the company's brand.

More simple:

Franchise – the right to use the brand, technology and experience famous company.

The person who buys a franchise is called a "franchisee". The franchisor is the one who grants the right to use the brand.

That is, the very concept of a franchise implies the purchase of the right to work under the name of a well-known company. At the same time, you can buy not only the brand, but also all the marketing and strategic developments that will allow you to start a business.

Also, most companies are responsible for equipment, selection of a place for doing business, development of the initial advertising plan and many other things that allow you to succeed.

It is worth talking about advertising separately. Since in most cases you buy already ready brand, then the market has already taken care of. And a developed network of franchises allows you to advertise the same product by several businessmen, which significantly reduces the cost of promotion.

The franchising system is widely used in public catering. The brightest representative is McDonald's. The company has been promoting its services on a franchise model for over 30 years.

Franchise types

Specialists subdivide several types of franchises:

1. classical. The most popular type of franchise in Europe. The owner pays the initial amount for the purchase of the franchise, regular contributions in the form of a % of the yield and operates under close supervision by the franchisor.
2. Free. The most popular type of franchise in Russia. The owner gets almost complete freedom of action, an approximate business plan of action and minimal contributions. Characterized by an average down payment.
3. Import-substituting. Creating products that are similar to well-known brands.
4. Full construction. When choosing this model, the franchisor himself creates a business and transfers it to the manager for a fee. The profit is divided depending on the terms of the contract between the manager and the franchisor.
5. Rent. Almost the same as a turnkey business, with the only difference being that the business is leased out for a fixed period.
6. Master Franchise. Purchase of monopoly rights to conduct business in the region. The franchisee has the right to decide how to conduct business. He receives only general advice on how to conduct business, but under this model, intervention from the company will be minimal.
7. Corporate. The owner simply creates under the name of a well-known brand, but makes most of the decisions on his own. The franchisor can only tell him his suppliers, the main activities of the company and the range. The businessman himself is responsible for everything else.

The chosen type of franchise will depend on the number, experience and aspirations of the franchisee.

At the same time, for Russian economy more characteristic is the free type of franchise, in which the franchisor is only interested in the down payment - the purchase of the brand. For this, he gives a recipe for a successful business, as well as contacts for most suppliers.

This is where the collaboration almost ends. The franchisee and the franchisor will only discuss issues together and promote common goods and services.

But Europeans often choose a stricter classical model due to the fact that it provides constant assistance from the franchisor, and, accordingly, supervision over the quality of doing business. With this option, freedom is lost, and with it the probability of making a mistake.

Pros and cons of a franchise

In order to explore the positive and negative sides opening a franchise business, you need to touch on the statistics. Official data says that about 80% of start-up entrepreneurs are weeded out in the first year. And from the remaining 20 - 15 after 5 years of work.

Of course, this statistic considers the sale of rights, the purchase by large companies and other transactions beneficial for the businessman to be a failure. But the general trend is this - about 1/3 of real businesses are successful with start-up entrepreneurs.

And from here follows the main positive side of the franchise - reliability. In fact, after the purchase, you get a ready-made recipe for how to run a working business. With all the suppliers, the choice of products and services, a multi-year team of analysts and a clear one that includes all the little things, down to the heating requirements of the building.

Buying a franchise of a well-known brand, you will receive a clear plan on how to make successful business, which will bring profit within a few years.

According to official statistics, aspiring entrepreneurs who have chosen a franchising model as the development of their business save up to 5 years for the development of their own company.

Of the implicit pluses, one can still distinguish:

• from the franchisor;
• Availability of trusted suppliers;
• Advertising campaign within the brand.

Franchising statistics are somewhat different than in real business. About 60% of franchise businesses are successful. At the same time, 30 out of 40 were at a loss due to their own mistakes, due to deviation from the franchisor's business plan.

And the remaining 10% incorrectly chose the region for business promotion. That is, if you choose the right region and fully follow the advice of the company, then the business will bring a stable income.

But in addition to the pros, there are several significant disadvantages that can weed out most novice businessmen.

Minuses:

• Price;
• Ease of doing business.

And if everything is clear with the first - for example, it may take up to 30 million rubles to open a small McDonald's restaurant, then with the second everything is not so clear.

On the one hand, everything is simple - there are working tips that must be followed, and the profit will not be long in coming. On the other hand, an entrepreneur will not gain experience by trying different strategies, “filling bumps” and coping with crises.

A franchise business is more like a game according to predetermined rules - do it and you will get a stable business and income. After a few years, you may be allowed to "change the menu" or "add a small shop."

And now we have reached the restrictions and requirements that most franchisors impose on potential buyers of the brand.

If we touch on the most popular - franchised fast food, then there are a lot of requirements:

• To buildings;
• to the staff;
• To the menu;
• To the franchisee.

And also a lot of restrictions like: do not change the menu, train the first employees strictly from the franchisor, buy equipment from such and such a manufacturer, purchase only from these suppliers for the first time, etc. Each has individual conditions, but the essence is approximately the same: do the same, as well-known representatives of the brand.

But at the same time, one should not think that such actions according to the template will be unprofitable. Most large companies that are concerned about their franchisees being successful conduct analytical work, during which they identify the needs of the region, features, which product should be launched, what is the most convenient time for this, etc.

The team will make a full analysis of how to make a brand successful in an average city or metropolis, what is more profitable to launch in central Russia, and that in the southern regions.

Is it worth starting a franchise business?

From the previous point, it became clear that the franchise has both its pros and cons.

Summarizing all this, it can be noted that:

If you find a good franchisor and follow his advice, you will get a successful business that will bring a stable profit in 90% of cases. At the same time, a number of restrictions are imposed on the businessman, which are set by the franchisor, in an attempt to protect him from wrong decisions.

It follows that running a franchise business is a great way to start your entrepreneurial journey. But working with big brands will require a significant amount of money. Therefore, it is better to start your own business with cooperation with medium-sized franchisors.

For more experienced businessmen, working with large franchisors saves a significant amount of time on project promotion. From 1 to 3 years to get your share in the market and from 2 to 4 to be able to fully gain a foothold in it.

How to start a franchise business

Starting a franchise business is quite easy. It is enough to go through 7 steps, after which you can have a legal and highly profitable business.

Step 1. Determining the scope

Unlike the countries of Europe and America, where fast food dominates steadily and confidently, franchising promotion in the field of retail sales of non-food products is more popular in Russia.

Then comes the provision of various services and only after that comes fast food. Food retail and occupies 3% of the total volume of the Russian franchising market.

Consider each of the possible areas separately:

• Retail. Represents interaction with major brands that operate in the region. In fact, it will be the purchase of wholesale consignments of goods and retail sales. Outstanding representatives who provide their goods for sale are Lacoste, Oodji. Those who send purchased goods to their franchisees - Sportmaster, Sela, etc.;
• Catering. Everything is simple here. You either rent a place at the food court and sell food and drinks under the brand name of a well-known brand. The menu is chosen by the franchisor, he also provides a database of suppliers, checks the premises and trains the staff. The most famous representatives are Subway, McDonalds;
• Production. The most profitable and least liquid way to invest in a franchise. You can produce under a franchise: vegetables, flowers, bakery products and other similar products. The franchisor most often participates in the creation of production, shares recipes for creation and its channels for selling products in the region. A prominent representative of the production franchise is Pokrovsky bakeries;
• Clothes and shoes of famous brands. Opening stores of famous brands is quite a profitable business. You will sell a range of well-known products in your region, while receiving full advertising support from the franchisor. Basically, you just open a branch store. Well-known brands - H&M, Timeout.

The choice of the field of activity depends entirely on the preferences of the businessman. In each of the segments, you can find both franchises with a small entry threshold - 100-400 thousand rubles, and large giants - from 20 million rubles per brand. At the same time, the sphere of production remains the most difficult, and the sphere of retail trade remains the least demanding on the manager's qualifications.

Step 2. Choosing a specific franchise and completing training

After choosing a niche, you will need to carefully study all the franchise offers. To do this, you can use our. The choice you make will directly affect your profit.

The qualifications of the franchisor will depend on:

• Profitability of the enterprise;
• Stability;
• Competitiveness;
• Demand.

As mentioned earlier, with a good franchisor, you will get a working recipe for a business that will bring long-term income. But a bad partner can only take the money and give a rough plan that contains general instructions on how to create some kind of business.

Signs of a good franchisor:

• brand awareness;
• Availability of a training center;
• Research of the region;
• Availability of supplier base;
• Clear rules and requirements;
• Real profitability figures;
• Investments in advertising.

All these points show the attitude of the franchisor towards the buyers of the franchise. famous brand it makes no sense to sell a low-quality product - including your name. The learning center indicates that some of the secrets of how the company's business is conducted have not been made public and they still have to learn.

A good analytical team that researches the needs of the region and builds a supplier base speaks volumes about the quality of doing business. Only those who bet on results can afford to invest in information and analysis.

The presence of clear requirements is an invariable quality of a good franchisor. Since he is interested in the franchisee developing and not making mistakes, he will protect him by setting clear requirements.

It is also aimed at maintaining the brand. And investments in advertising mean that, for the most part, at the expense of the franchisor, a businessman will be able to get good advertising your business and quickly attract customers.

Step 3. Document preparation

At this stage, you should choose the legal form in which you will work on a franchise. There are two options for doing business: as or.

Running a business as a sole trader has a number of benefits:

• Ease and speed of opening.

But at the same time, you will be liable with your property for the obligations of your individual entrepreneur. However, even if you work at a loss, you will need to pay 35,000 a year to the social security fund.

Also, an individual entrepreneur cannot hire a large staff of workers - which can significantly slow down business development.

At the same time, the LLC has one significant plus - in the case of liability, liability can only be collected from the property of the company.

At the same time, LLC has a more complex and accounting system, and has a time-consuming state registration procedure.

When choosing a legal form, it should be borne in mind that when choosing an individual entrepreneur, all types of business related to cigarettes, etc. will not be available to you.

Step 4. Search and refurbishment of the premises

In any business, space plays a huge role. That is why every franchisor has a clear idea of ​​what it should be like for successful business.

When examining the various franchises in the conditions, the requirements for the premises will be indicated each time.

In most of them:

• Volume from ** square meters;
• The presence of a water supply;
• Compliance with all safety standards;
• Various specific features. Varies from business to business.

Some allow their franchisees to rent the premises, while others insist that it be their own.

Most franchisors operating in different regions of Russia have their own bases of suitable premises for each city. You can also use consultants from franchisors who, in short time find a place to do business. This is one of the advantages of working with medium and large brands.

Step 5. Purchase of equipment

One of the most simple steps. The franchisor issues contacts of all suppliers, or is completely independently engaged in the purchase and delivery of equipment. Also, specialists can deal with the installation of all equipment. About 80% of all costs before opening are spent on the premises and preparation of equipment own business.

At the same time, if you work with European brands, you will need to purchase quite expensive equipment, and it will not be possible to buy Russian analogues. And because of the high price, the quality of the equipment will be appropriate.

For example, for German equipment purchased by McDonald's franchisees, the warranty is from 10 to 30 years.

Step 6. Preliminary preparation

The process of preliminary preparation includes: purchase of goods, preparation of premises, holding advertising campaign and a test run of a store/restaurant. This process will be led by the franchisor's specialists: their main task is to find flaws and eliminate them even before the launch, along the way teaching the businessman various subtleties of doing business.

It can take from 1 to 3 months to prepare a business in advance.

Step 7. Starting a business

After preliminary preparation, it is time to start the business. For the first time after the launch, the franchisor's specialists and analysts will closely monitor the performance of the store/restaurant. After a few months, the franchisee will have more freedom, for example, to vary the assortment of the store.

After 1-2 years have passed, the franchisee will be able to fully take control of the business and choose suppliers of goods, train employees on their own and build a sales line as they see fit.

That is, over time, any franchisee gets much more freedom, regardless of the chosen form of franchise. Even with the classic model with such a tough franchisor as McDonalds, after 1 year you can change the menu, after a year and a half - create your own dishes, and after 2 - on the territory of the restaurant and next to it.

All about paying a franchise

Now let's talk in more detail about financial side question.

When selling a franchise, the franchisor has two options:

• Require only a down payment, which will pay off all the costs of assistance in starting a business;
• Require a down payment, as well as monthly (quarterly or annual) contributions in the amount of % of the business.

The franchise fee is called a lump-sum fee. This is a one-time payment, which is calculated from all the costs that the franchisor will have to bear to open a business, as well as payment for its services.

The monthly fee for using a franchise is called a royalty.

There are 3 types of royalties:

• Percentage of turnover;
• Percentage from the markup of goods;
• Fixed royalty.

The most commonly used percentage of turnover - from the amount of income withheld from 5 to 30% monthly, depending on how profitable the business is.

At the same time, as mentioned earlier, if the franchisor exposes only lump sum- this means that he will be less interested in developing your business.

It will be enough for him to receive a large amount once, give the business plan and leave in an unknown direction, leaving the businessman to deal with his own project on his own.

On the other hand, large royalties can negatively affect the profitability of a business. True, most franchisors take into account the profitability of their projects, so they set quite adequate rates of 5-15% of the profit per month. This makes it possible to earn money from the entire branch network, and at the same time leave them a significant amount of profit.

There is another contribution - advertising. Thanks to him, an advertising budget is formed, which is spent on promoting the whole brand in all regions. Thus, paying from 10 to 100 thousand rubles a month, depending on the volume of business, you will be able to receive full-fledged advertising in your region, as well as increase brand confidence around the world, which also has a positive effect on sales.

Franchise Examples

In the end, let's look at 3 large franchises in three different areas: McDonald's, Pyaterochka, Lacoste.

McDonald's.

Having appeared on the Russian market relatively recently, a large catering giant began to dictate its own, rather harsh conditions.

In order to be eligible to use a McDonald's franchise, you must:

• Have capital from 10 to 40 million rubles, depending on the city and the size of the restaurant. At the same time, at least 50% of the funds must be own, not borrowed. The remaining 50% you can pay within 7 years at a minimum percentage of the company itself;
• Get paid training. Tuition price - $ 10,000;
• Have extensive experience in business or catering.

In fact, in order to open a McDonald's franchise, you must either be an established businessman or have extensive experience in the food service industry.

The McDonald's lump sum is $45,000. Royalties - 12.5%. Payback period - 3-5 years.

Pyaterochka.

Retail grocery stores in Russia prefer to develop organically - not by selling franchises, but by independently expanding production areas and absorbing regional retail chains.

But X5 Retail Group, the owners of Pyaterochka, Perekrestok and Karusel stores, decided to create a franchise network in Russia grocery stores with fairly favorable conditions.

Terms:

• Availability of own premises (long-term lease is suitable);
• Positive business reputation;
• Availability trading floor from 100 sq. m.

Lump sum - 750,000 - 1,000,000 rubles. There is no legal royalty. But here lies one important detail - according to the contract, the franchisee receives a commission in the amount of 14 to 17% of the store's income. Quite a profitable scheme for start-up entrepreneurs.

The payback period for the business is 1.5-2 years. Great option for businessmen without experience.

Lacoste.

The most controversial one on this list.

There are few requirements, but they are quite tough:

• Presence of own premises - 100-150 sq. m.;
• Experience in the field retail sales and availability own stores clothes.

There are no lump-sum fees and royalties. You will buy branded clothes, shoes and accessories and sell them in your store. The franchisor will need to pay for the products and the mandatory advertising percentage.

The payback period depends on the businessman. The freest franchisor, only for the most experienced entrepreneurs.

These three franchisors show a completely different approach to franchising. One is a classic European with tight boundaries and excellent strategy. The second is a typical Russian, with a rather strange approach in the form of agency fees. And the third is an American, with favorable conditions for himself, who is looking for an experienced partner.

Each franchisor is an individual and a company with decades of experience behind it. Consider all the features when choosing a partner, up to the size of the room and the severity of the conditions.

Conclusion

Starting a franchise business is the most profitable way for aspiring entrepreneurs to start their own business. In Russia, the most popular franchises with investments ranging from 400 thousand to 4 million rubles.

If you have such capital, then literally in 1.5 - 3 years you will be able to recoup all investments and reach an income of 40 to 500 thousand rubles a month.

In Russia, business is increasingly using franchising tools (benefits for entrepreneurs) as an organization of new forms of cooperation. Most entrepreneurs initially think about how to create a franchise for their business, this is when own business a brand is created that allows you to make a profit not only from the activities of the entrepreneur, but also from the use of the name of branded products.

This type of organization of cooperation has advantages, since both buyers of a ready-to-use business project and the seller of the brand benefit from it. Consider how to choose a strategy and organize the work of creating a franchise.

Being engaged in entrepreneurial activity, each owner own enterprise thinks about its expansion, about ─ how to create a franchise of his business, to have a constant profit from the brand he created. To consider this issue, it is necessary to navigate in special definitions, namely:

Definitions	Explanation
Franchising	In translation (preferential entrepreneurship), the relationship (long-term cooperation) of a number of enterprises with a well-known brand matters.
Franchisor	Head office or company that sells well-known technologies and a license to use their trademark.
Franchisee	An entrepreneur who buys the right to use the brand of the main company in his business receives help in training staff from it.
Franchise	Ready-to-use business project, documentation and technologies in business development from the owner of the trademark.
Franchising relationships	They are based on the mutual benefit of the entrepreneur, both the participant who bought the franchise (increase in profits), and the owner of the trademark (advertising and fighting competitors).
	Monetary compensation for the use of a trademark (brand).

Having considered the main definitions that we will use, we will understand why this relationship is beneficial for the entrepreneur and the owner of the trademark. When a novice entrepreneur buys a license (franchise) to open his own business, from representatives of a well-known brand (franchisor), he becomes a franchisee for him. He is provided with training and support at work, no need to look for suppliers, as well as the opportunity to purchase equipment with big discounts from the franchisor's partners.

The franchisee (entrepreneur), having a franchise (license to use the brand), opening a business, does not remain with the obstacles that arise in business on his own, he will always be supported by the parent company (franchisor), there are fewer risks. The franchisee is an independent partner who can always have support, he is the head of his business.

A franchise geographically in the region divides the conduct of business of the same type, the distribution network coverage of the region is determined by the franchisor, issues such as:

The seller-buyer relationship is optimized.

The issue of product competition is being addressed.

Franchising relationships

It is necessary for businessmen who are thinking about how to make a franchise ─ to understand that, being the main organizer, he will have to provide partners (small business owners) with a license that gives them the right to independently conduct business activities using the organizer's trademark.

Both parties win in this relationship.:

the parent company provides technical documentation and experience, technological equipment;

the organizing company (franchisor) advertises products, supplies materials for production;

an entrepreneur who has bought a franchise remains an independent enterprise in his region, he pays monthly fees (royalties) to the franchisor.

It often happens in these relations when, in addition to advertising, leasing equipment, technology can provide funds for business development to a small enterprise (loan), on a contractual basis.

In other words, franchising relationships, ─ association big business with entrepreneurs in order to expand the market and effectively sell products.

Specialists distinguish between several types of such relationships, these are:

The provision of franchising services is a method used by foreign companies, opening in the cities of the Russian Federation by purchasing premises or renting training centers. An example of this activity is McDonald's.

Networking through product franchising - when a community service or product distribution network is required to use the brand name of the main company, it also provides new techniques, does advertising, supplies equipment, and provides training for small business employees.

Need besides positive sides consider and Negative influence for the activities of a franchise entrepreneur ─ when the contracts contain restrictions on the conduct economic activity when the franchisor creates the conditions for the relationship as much as possible for himself. Suppliers must be provided on the recommendation of the main enterprise, even if the material can be obtained cheaper in the region.

Very often, before asking how to create your own franchise, you need to understand why a novice entrepreneur, in addition to getting equipment and materials for almost nothing, is also willing to pay for the experience that you have? In other words, many who will buy a franchise are buying the right to go in their business along the path that you “trodden”. For this reason, before doing a franchise business, you need to organize your own successfully operating network, win a trademark and a part of the market for your products.

Having your own branded product and several stores will make it much easier to attract customers to buy a franchise.

How to form a franchise

Any event must begin with a theoretical justification, ─ when an entrepreneur can clearly imagine the entire format of his activity. To facilitate this task, it is necessary to answer three main questions, these are:

at what stage of development is my own business now, what are my achievements in it;

organizing new format(franchising) what I want to achieve;

what means and resources I need to use to implement the new format (personnel, finances, time, equipment and other resources).

A businessman must realistically evaluate his products, how popular they are among buyers and how much profit their sale brings through outlets. You need to understand what kind of experience you can transfer to the franchisee. Based on the answers to the questions, you can understand who will be interested in cooperation with you, and start forming a franchise.

Requirements for the franchisor

Consider the activities of a certain company that will explain ─ how to create a franchise on your own, and answer what requirements apply to franchising, as well as what goals you need to achieve. Let's take a look at the goals:

Receiving specific profit from franchising as an additional income.

Increasing the sales network, opening stores and outlets.

Achieve an increase in the turnover of products from the franchisee of at least 150 thousand rubles in 30 days per outlet.

You can specify a list of cities in which it is planned to open trade, expand business on regional grounds.

Prevent the use of a trademark without a license agreement (franchise).

Development own production and increase its products in the market share ratio to 60-80% by the end of 2016 and up to 90% by 2020.

To work on the popularity of the brand, creating a good image of it among buyers.

Increase purchases in the regions, reduce European supplies by 3-5% for every 2 years.

Load the available capacity to the maximum value.

Work with partners on the profitability of their stores is not less than 30%.

A businessman creating a franchise must understand that it is necessary to always strike a balance between the budget for the event and the available resources, ─ the main task at the initial stage of the franchise program.

There is a reasonable risk when simple goals are set, then the profit may not cover the costs that will have to be spent on promoting the franchise. Goals that are too high with big ambitions can put a franchise team into a dead end.

Russian legislation does not differ in strict measures for the activities of the franchisor, therefore, how to franchise your business ─ at the legislative level, it has advisory requirements for the main companies.

Experts say that any company on the territory of the Russian Federation can declare itself a franchisor, and there is no law prohibiting this activity, even if it is engaged not in the production of the final product, but in the supply of material. The existing means of Internet sites for a certain amount will place advertisements for these franchises, which in fact will not even survive simple requirements to be completed by the franchisor.

The presence of at least one store selling their products.

It is possible to organize an outlet depending on the seasonal demand for products.

The success of your own business, with the criteria for the payback of production, it is desirable to have detailed calculations. It is important to calculate success not by the cost of goods, but by the price of the franchisee, taking into account royalties, and other contributions in favor of the franchisor.

Have a registered trademark, sign.

If the calculations with all the deductions show a good return on production, then the franchise can be successful.

How to start a franchise without having your own brand, TK (trademark), ─ at a minimum, experts believe, submit to the patent office a package of documents on the types of products that you will work with in order to receive the priority of the application, this is your first document. Experts noted that the time interval from filing documents to obtaining a trademark takes at least 12 months.

The desire to start selling a registered franchise as early as possible encounters a circumstance ─ the status of the copyright holder, which gives the legal right to receive royalties ( compensatory contributions), from your partners.

It is also necessary to think over when the franchise is from the service sector, how to organize monthly contractual payments, in what form the claims for royalties and a one-time fee for joining your partner network (lump-sum fee) will be described in them.

At this stage, specialists recommend concluding a license agreement with partners on preliminary agreements, which reflect the signing of the main license agreement after obtaining the status of the copyright holder. This agreement acts as a guarantee of the signing of the main agreement for both parties.

Franchising package

What is needed to create a franchise - what documents, according to experts, in Russia reflect the creation of a franchise, these are:

a developed business concept, with contracts;

have your own network;

availability of documents for the conduct of franchising.

It is the concept of developing your own business that allows you to form a good relationship between the franchisee and the manager of the main company.

In the concept of your business, reflect the nuances of relations with the franchisee that cannot be shown in contracts, these are:

opening of new points, for a specific period;

increase the turnover of the products of your business and the business of the franchisee;

indicate at whose expense the training of the new employee will be carried out if the old one has left the franchisee.

Always opening a franchise, there will also be territorial issues that need to be properly regulated, because your outlet and the franchisee point can be in the same region. Resolve issues with wholesalers about the supply of materials. It is difficult for a novice franchisor to understand these issues.

Existing Franchise Standards

How to make a franchise for your business that would meet the established standards (not rigid)? Experts recommend some basis that shows how to apply the brand (logo, trademark).

Name	Requirements
Brand Description	History of creation, how the brand is positioned. For what target audience she is released. The presence of a logo. Its sketch, description of security, options for non-permissible applications. Business card with brand name. Badge for employees, company logo.
Premises for a retail outlet, organization of an enterprise	The format of the products being traded. Necessary requirements for a production facility. Selection of premises according to the required dimensions. External design of premises, buildings. Equipment and technical documentation. Required software.
Employees	Required minimum staff, its qualifications.
Products and services	Characteristics of the products sold, and what types of services are provided.
Training	Distance or face-to-face training. Certification and training in marketing.
Reporting	Necessary payments to the franchisor, the company's own documentation.
Working hours of the enterprise, outlet	The time interval of work by hours, days, months for the current year.

Operational Management Means Standards:

conclusion of an employment contract;

agreement on the material, or individual responsibility personnel;

agreement on confidentiality of all information (corporate ethics);

employee questionnaires.

Advantages when opening a franchise, possible disadvantages

A businessman who opens a franchise receives:

new investments in your business through contributions from partners;

supply conditions are improving (volume increase);

business is improved regionally due to the activities of the franchisee.

A trademark becomes more famous when the number of partners increases, which indicates successful franchise. It is necessary to control remote franchisees.

The disadvantages that may appear with the opening of a franchise are:

loss of confidential information, new techniques in technological processes;

deterioration of one's own reputation when the franchisee does not work efficiently;

profitability for franchisees is much lower when products are sold in their own network.

By opening a franchise, a businessman becomes a franchisor, and it is very important to always support entrepreneurs (partners) who have bought a franchise. Be sure to maintain constant contact with the franchisee. Conduct employee training on new methods of technological processes.

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[…] The last factor allows even inexperienced, novice entrepreneurs to count on success in their commercial projects. This article will help you understand what a franchise is, where and who uses this method of organizing a business, how you can reduce costs when buying a franchise, etc. We also recommend that you read the following articles - "what is a franchise" and "how to create a franchise of your business." […]

Franchise catalog. Turnkey business. Help in the selection. profitable franchise business Zavitinsk - franchise directory

2017-05-19 09:13:45

[…] The last factor allows even inexperienced, novice entrepreneurs to count on success in their commercial projects. This article will help you understand what a franchise is, where and who uses this method of organizing a business, how you can reduce costs when buying a franchise, etc. We also recommend that you read the following articles - "what is a franchise" and "how to create a franchise of your business." […]

Franchise catalog. Turnkey business. Help in the selection. small business franchise Akhtubinsk - franchise directory

2017-06-10 14:01:28

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Franchise catalog. Turnkey business. Help in the selection. opening a franchise business Mozhaisk - franchise catalog

How to open a franchise: advantages and disadvantages + choice of registration form + 8 steps to opening a company in this way.

Franchising is one of the most profitable and promising ways to make money, because it allows you to use a ready-made brand.

Why is this considered an advantage?

The brand, which has existed for more than a year, has passed the test of time, is in demand among buyers, and all organizational issues and advertising moves promoting the product have already been adjusted.

It is thanks to this that aspiring entrepreneurs often wonder how to open a franchise store.


This article will help you find the answer to the question how to start a franchise business and what to look for Special attention.

But first, let's find out the weak and strengths such entrepreneurial activity.

How to open a franchise: the pros and cons of this type of activity

Benefits of a Franchise

This type of earnings has huge advantages that attract beginner businessmen:

Opening a franchise store receiving guaranteed assistance and support from the franchisor.

His advice is based not only on his own knowledge and skills, but also on the experience of other people who have already experienced the franchise business.

For start-up entrepreneurs, such assistance at the development stage is simply necessary.

To start a franchise business no need to come up with a new direction or create a strategy from scratch to bring the idea to life.

It is enough to have initial capital and some knowledge in this area of ​​business.

Another plus is that a businessman, before opening a franchise store, aware in advance of the fame and popularity of a particular brand on the market.

An entrepreneur has the opportunity to evaluate and analyze the popularity of a product, a niche in the market, without losing their own resources.

Thanks to this, you can significantly reduce the cost of your marketing strategy.

An important fact is getting a large loan.

In this case, the franchise owner acts as a guarantor of the person who takes the loan.

In the usual case, it is almost impossible to receive a large amount from a bank without a guarantor or collateral.

Before starting a business, all entrepreneurs calculate business plan, in which often only approximately calculated:

• the amount of investment to open a business;
• approximate profit;
• business profitability;
• payback periods.

But thanks to the franchisor, a novice entrepreneur receives reliable and proven information on .

This minimizes the risk that the business will develop in the wrong direction or there will be unforeseen expenses.

Disadvantages of the idea of ​​\u200b\u200bhow to open a franchise business

Having considered the advantages, we turn to the disadvantages that can lead to the destruction of the case even at the start, if you do not know about their existence:

• growing vegetables and fruits;
• cultivation and subsequent sale of flowers for specialized stores;
• a bakery where products are not only manufactured, but also sold on the territory of the enterprise with the help of an additionally installed store or cafe.

A good example of the latter can serve as a trading network "Pokrovsky bakeries".

Why is this particular franchise business option successful? Few people do not know that bread is an essential commodity that is bought almost every day.

If there is a demand for production, then, accordingly, there will be a profit. So, the direction is chosen correctly!

d) Children's products.

Mixes, toys, pacifiers, and clothes, baby hygiene products - all this will be sure to be purchased by mothers for their crumbs.

But before you open a franchise in this direction, evaluate the popularity of this niche in own city so as not to start an initially unprofitable business.

e) Clothes, shoes.

These products, manufactured under the wing of recognizable brands, can also become a franchise business.

However, before the start, it is also necessary to assess the financial capabilities of the city's population. No one will buy VIP shoes or clothes if the total monthly income of the family is 60,000 rubles.

You can open a franchise store and sell accessories, Jewelry, auto parts.

The prospects for each of the directions are easily determined in your own city by analysis.

Step 2. We prepare documents

To start your business, you need to register a business.

The state provides for two forms of registration - these are IP and LLC. Let's look at the advantages and disadvantages of these types before opening a franchise:

Now consider the advantages and disadvantages, before opening a franchise store:

Advantages of LLC	Disadvantages of LLC
In court, unlike an individual entrepreneur, it will be necessary to bear responsibility only for the finances and property of the enterprise.	Requires the presence of a certain capital (at least 10,000 rubles for the authorized capital).
If the company did not work, then pay in Pension Fund do not need anything.	Strict accounting system - you will have to hire an employee or outsource the case.
The company can be called almost anything (except as prescribed by law).	Reporting is several times more than that of IP
Sold or divided at the request of the founder.	The system of penalties tax office and others government agencies much stricter than for IP.

The founder should take into account that some stores cannot be franchised as sole proprietorships. This list includes the implementation alcoholic beverages, military industry, security agencies.

Step 3. Decide on the room

The franchisor pays special attention to the choice of premises.

To open a franchise store, you must meet a number of established requirements:

• advantageous location, which contributes to the successful conduct of business;
• a large area of ​​\u200b\u200bthe store in which trade will be conducted;
• compliance of the interior decoration of the premises with the “spirit” of the business;
• availability of space to be used as a warehouse.

Of course, finding an area that meets all the requirements of the franchisor is not easy. But if you all coped with this, then you can apply to the franchisor and hope that he will allow you to open a store under your brand.

Step 4. How to open a franchise store: conditions

If a positive response was received, the entrepreneur is informed of a number of requirements that he must fulfill.

Often, famous brands put forward two requirements for a new business under their auspices:

• payment of a monthly percentage of sales;
• down payment from the entrepreneur to the brand.

This method enables the franchise founder to weed out insolvent entrepreneurs. Also, by doing so, it can prevent unjustified costs that are associated with connecting a person to a business network.

Step 5. Preparing the store for opening

After obtaining a franchise, it is necessary to make repairs in the premises under the indicated requirements and purchase the necessary equipment.

The franchisor can help with these processes by finding contractors who will carry out repairs and pointing out where equipment can be purchased at a reduced price.

Step 6. Recruitment for the store

Basically, the copyright holder himself recruits staff and trains employees according to his own developed program, while all the costs of this process are covered.

Most a prime example This is the McDonald's chain. All its employees must act according to a single brand code. And franchisors are watching this very carefully.

Step 7. Delivery of goods

An additional advantage of opening a franchise store is that all delivery issues are assigned to the franchisor.

A novice entrepreneur will only need to pay for the delivered products at the company's set price.

We bring to your attention a video on how to choose the right franchise:

Step 8 Launching the Store

The franchisor is fully interested in the fact that his business develops and generates income. Therefore, he assumes the costs of marketing and advertising, and also contributes in every possible way to the development and further promotion of the business.

In the article you received a detailed answer to the question, how to open a franchise.

It should be noted that franchising requires more capital investment than starting your own business from scratch.

But also do not forget that the franchise minimizes the risks of financial failure and provides significant support, which is especially important for newcomers to the business world.

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Many people dream of starting their own business, but cannot decide to take such a step. The main reason for indecision is the lack of ideas and the fear of risk. Therefore, the franchise business is increasingly attracting the attention of beginners. We will understand the essence of franchising and learn about its pros and cons.

What is franchising

To understand the intricacies of franchising, you need to understand what it is. A foreign word hides the ability of any person to work under the name of a brand they like. And it doesn't matter whose logo it is - Russian or foreign. The main thing is that the consumer knows him, and the owner makes it possible to earn on his name. A franchise is an agreement offered by a brand owner to an entrepreneur.

Franchising is very convenient - no need to wait for ideological inspiration, think about advertising, rating and demand. Everything has already been done for you. The franchisor (owner or representative of the brand) explains in detail to the franchisee (an entrepreneur who signs an agreement to conduct business under a certain franchise) the intricacies of doing business. All risks, estimates are calculated, and drawn up step-by-step instruction. This is what attracts people who do not have experience, or those who tried to discover something of their own, but did not work out.

A franchise is an agreement offered by a brand owner to an entrepreneur.

Financial side

So, you are offered a finished case. Take and use. But the owner of the brand is ready to share not just like that, but for a fee. These conditions may be different for each franchisor.

What do you have to pay the franchisor:

1. Lump sum.

This is the initial payment that is required to conclude the contract. This is a kind of brand rental fee or membership fee. Sometimes these contributions are so large that a novice entrepreneur simply cannot afford the amount.

2. Royalty.

Monthly payment in favor of the owner and it depends on the percentage of the franchisee's income. In other words, the entrepreneur needs to pay a kind of income tax every month to the brand owner for the opportunity to generate income.

But not all franchise forms include these concepts. Everything depends on the specific case. Some companies take only a lump-sum fee, while for others it is zero and the franchisee pays only royalties. But it also happens that the owner of the brand requires payment of both a lump-sum fee and royalties. Therefore, it is worth evaluating your capabilities in advance so that you do not have to take off rose-colored glasses at some point.

There is, of course, another way to open a franchise business - without investments. The principles of the no-investment franchise are that an entrepreneur who claims such a right must convince trademark owners that his candidacy will improve performance, but this is a lot of work. Only in rare cases does the franchisor become an investor for the franchisee.

The franchisee must pay the brand owner a lump-sum fee and royalties.

Pros and cons of a franchise

In this direction, as in any other type of business, there are advantages and disadvantages that you need to know in advance. Creating a franchise is a serious work aimed at regulating the relationship between the owner of the brand and the tenant.

pros

1. Brand awareness.

The popularity of the company inspires consumer confidence. There is no need for promotion, PR. Seeing a familiar name, the client will come himself, and not for the sake of curiosity, but to purchase a product or service. Onlookers who are not related to the desired contingent will be bypassed.

2. Business support.

The franchisee will never be left behind, necessary instructions and learning. For any reason, you can contact a specialist. At the first stage, assistance is provided even in the design of the premises, if the brand requires it. In another type of business, a beginner will have to solve all the issues on his own.

3. Guarantee to the bank.

If there is a desire to open a business, but there are not enough funds, then you need to go to the bank, but it happens to a budding entrepreneur. When choosing a franchise, the owner of the brand will support you, he will guarantee the return of credit funds to the bank. Agree that it is more reliable to give funds for an already promoted business than to look for a bankrupt client later.

Minuses

1. Harsh conditions.

Need to work on certain conditions dictated by the owner. Deviation from even one point is fraught with fines for the tenant of the brand or termination of the franchise.

2. The rights of the franchisee are distributed only in accordance with the signed agreement.

If the brand suffers losses or goes bankrupt, then the entrepreneur who leases the right to work under this brand will have to wind down, no matter how well things were going for him. The fact is that if the supplier of goods or equipment disappears, the supply of what the franchisee depends on stops. The risks are high, especially if you do not study the economic side of the prospective partner.

It is also worth paying attention to what conditions the brand owner dictates when terminating the contract. There are situations when a new business does not suit the entrepreneur only after the project has been launched or other circumstances have arisen to close the business. But some types of franchise strictly stipulate that they have the right to sell your department to another entrepreneur at a lower price.

The rights of the franchisee are distributed only according to the signed agreement.

3. Restrictions in the choice of suppliers.

It is possible to purchase equipment or raw materials only from certain persons, which may be unprofitable by location. Attempts to circumvent this clause will result in termination of the contract.

4. Expenses.

Do not forget that all the costs of registering a business, acquiring premises for work, purchasing goods, equipment or raw materials remain on your shoulders.

Legal regulation

When thinking about starting a franchise business, you need to study legal regulation such an agreement. Franchising in Russia is a relatively new direction in business, therefore, laws directly related to this type of activity have not yet been adopted. For Russian business the concept of “commercial concession” is suitable, the principles of which are spelled out in Chapter 54 of the Civil Code of the Russian Federation. But it's not serious legal form, and therefore some entrepreneurs are trying to pass off as a franchise a completely different direction in business, having absolutely nothing to do with the trademark. So it is necessary to understand that the creation of a franchise must be confirmed by a written agreement, which spells out the rights of the parties.

Registration of a franchise is carried out only by the agency that issued the right to a certain brand to its owner. If such registration of the contract is not made, then the transaction will be considered illegal.

To eliminate all risks and surprises, you need to look at a sample contract of the trade mark with which cooperation is expected. It can be requested from the company or viewed on the official website. Also standard contract franchise can be downloaded from sites where directories of companies offering franchising are compiled.

Franchise Business Lines

First you need to study the areas of franchising that are offered in Russia. There are a lot of varieties, because the development of franchises does not stand still. Entrepreneurs, opening a business very often, without having tested it on their own, begin to sell franchises.

Activities:

1. Retailing.

Network retail activity. For a franchise, it is proposed to open a store that is known in many regions. For example, the well-known stores Pyaterochka, Perekrestok, Magnit, L'Etoile.

2. Sphere of public catering.

This is a very popular type of business because food is always in demand. Successful example you can call Subway, McDonald's, Little Potato, various companies offering coffee to go.

3. Production.

This is a very diverse type of franchise that gives you the opportunity to choose a direction: in food, growing certain crops, such as exotic flowers for flower shops. Mini-bakeries or retail outlets, where production and sale of products are simultaneously carried out, are becoming widespread. An example is Russian Pies, Pokrovsky Bakeries. This direction is very profitable, because bread is bought every day. If there is a supply corresponding to demand, then the type of production is chosen correctly.

4. Goods for children.

Toys, food and baby care products. In this case, you need to study the competition in your city or other locality so as not to be at a loss.

5. Clothing and footwear.

Goods from well-known and not so famous brands also provide great opportunities for choosing the direction of franchise business development.

6. Products for women or men.

These can be specific attributes: jewelry, watches, spare parts for cars of certain brands.

A more complete classification of types of franchising in Russia is available on specialized websites that provide such information. In the franchise directory, you can select different companies and get information about ratings and reviews from existing franchisees.

To purchase a franchise, you first need to register an IP. Franchising is only allowed commercial organizations or individual entrepreneurs. Individual cannot do business without registration.

To purchase a franchise, you first need to register an IP.

First, study the situation in your city. It is possible that the type of activity of interest is already on the market. Next, evaluate your financial capabilities, because any business requires investments. If the cost of a lump-sum contribution is excluded, then you still have to spend money on premises, the purchase of goods or raw materials, equipment. Think about whether you are afraid of responsibility to the consumer and partner. To let down a respected product brand is to lose profits. Therefore, carefully study your responsibilities before signing the contract. Don't forget about statistics. Statistics is important parameter, which can be the main one when a businessman makes a choice in favor of a certain form of franchise.

Think about what the payback period might be. To do this, you need to talk with those entrepreneurs who are already in business in order to understand which technology works 100%. Although the owner of the trademark gives detailed reports and a business project, it is necessary to take into account not only the central regions of Russia, but also the outback, because the incomes of the population are different.

Let's take an example. The entrepreneur decided to expand his activities. I saw that there were few luxury furniture stores in the city and chose a narrow direction - kitchen furniture. As a partner, I chose the trademark "Kitchen Maria". Spent on rent retail space where the main samples of the factory should be placed, and purchased the samples. Brand owner gave big discount for exhibition kits, but made demands that samples from the showroom not be sold for a certain period. The entrepreneur also thought that he would need funds to spend on computers with the factory's design program, but they were also provided free of charge. After the staff was hired, who were trained by the manufacturer, the salon began work. But, despite the fact that the preparations for the opening of the salon were successful, there are no customers. And all because the entrepreneur did not take into account that the cost of a headset from the brand "Maria's Kitchen" is at least 100,000 rubles. This is practically inaccessible to the bulk of consumers in the region, where the average salary is only 20,000 rubles. It is quite another matter when the salon is open in big city where there are more high-income people.

Terminating an already signed agreement can lead to serious problems. To avoid problems, the preparation must be very thorough. In order to check the reliability of the chosen direction, you need to find contacts where you can contact representatives. If the site only has a form where you can write a message and wait for a response, you should not do business with this company.

In order to check the reliability of the chosen direction, you need to find contacts where you can contact representatives.

Summarize

Although franchising as a type of business activity for Russia is a new concept, it is gaining momentum rapidly. The pros and cons of such a business are already obvious, there is experience that entrepreneurs share with each other in order to avoid serious mistakes.

The choice of activities is very large. If you study the main types of franchises, you can choose something that will bring not only income, but also pleasure. There is no serious regulation of the process by the regulatory authorities, but with the support of an experienced lawyer, you can eliminate the pitfalls in the agreement.

Having considered the main aspects of running a franchise business, we can only say one thing: if there are no ideas for developing your own direction, then you should use the experience of those who have reached great heights and received respect from the consumer.