Opening a franchise business. Franchise: how to open, features, pros and cons. Franchise VS independent opening

01Jun

Hello! In this article we will talk about opening 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 the franchise is called the “franchisee.” Franchisor – 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 operate 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 launch your business.

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

It’s worth talking about advertising separately. Since in most cases you are already buying ready-made brand, then the market has already taken care of it. And a developed network of franchises allows several businessmen to advertise the same product, which significantly reduces promotion costs.

The franchise system is widely used in public catering. The most prominent representative is McDonald's. The company has been promoting its services through a franchise model for more than 30 years.

Types of franchises

Experts divide several types of franchises:

1. Classical. The most popular type of franchise in Europe. The owner pays an initial amount for the purchase of the franchise, regular contributions in the form of a percentage of profitability, and operates under the close supervision of the franchisor.
2. Free. The most popular type of franchise in Russia. The owner receives almost complete freedom of action, a rough action plan for running the business 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, for a fee, transfers it into ownership to the manager. Profits are divided depending on the terms of the agreement between the manager and the franchisor.
5. Rent. Almost the same as a turnkey business, the only difference is that the business is leased for a certain period.
6. Master franchise. Purchase of monopoly rights to conduct business in the region. The franchisee has the right to decide for himself how to run his business. He receives only general advice on how to conduct business, but under this model there will be minimal interference from the company.
7. Corporate. The owner simply creates under the name of a well-known brand, but makes most of the decisions himself. The franchisor can only tell him his suppliers, the main areas of the company’s activities and assortment. The businessman himself is responsible for everything else.

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

Moreover, for Russian economy A free type of franchise is more typical, in which the franchisor is only interested in the down payment - purchasing the brand. For this, he gives a recipe for a successful business, as well as contacts for most suppliers.

This is where the cooperation almost ends. The franchisee and franchisor will only discuss together issues and promotion of common goods and services.

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

Pros and cons of a franchise

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

Of course, these statistics consider the sale of rights, purchases by large companies and other transactions profitable for a businessman to be a failure. But the general trend is this: about 1/3 of real businesses are successful among novice entrepreneurs.

And from here follows the main positive side of the franchise - reliability. In fact, after the purchase you receive a ready-made recipe for how to launch a working business. With all the suppliers, the choice of goods and services, many years of experience, a team of analysts and a clear solution that includes all the little things, right down to the heating requirements of the building.

By purchasing a franchise from a well-known brand, you will receive a clear plan on how to successful business, which will bring profit within several years.

According to official statistics, budding entrepreneurs who choose a franchise model to develop their business save up to 5 years on developing their own company.

Other hidden advantages include:

• from the franchisor company;
• 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 deviations from the franchisor’s business plan.

And the remaining 10% chose the wrong region to promote their business. That is, if you choose the right region and fully follow the company’s advice, the business will generate 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 with the first everything is clear - for example, opening a small McDonald’s restaurant may require up to 30 million rubles, then with the second everything is not so clear.

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

A franchise business is more like a game according to pre-agreed rules - do this and you will get a stable business and income. In a few years, you might be allowed to “change the menu” or “add a small store.”

And now we come to the restrictions and requirements that most franchisors impose on potential brand buyers.

If we talk about the most popular - fast food franchise - there are quite a lot of requirements:

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

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

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

The team will carry out a full analysis of how to make a brand successful in a medium-sized city or metropolis, which is more profitable to launch in central Russia, and what about in the southern regions.

Is it worth opening a franchise business?

From the previous paragraph 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 imposed by the franchisor company 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 by collaborating with average franchisors.

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

How to open a franchise business

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

Step 1: Defining the Sphere

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

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

Let's consider each of the possible areas separately:

• Retail. It represents interaction with major brands that operate in the region. In fact, this will be the purchase of wholesale quantities of goods and retail sale. Prominent representatives who provide their products 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 in a food court and sell food and drinks under the name of a well-known brand. The franchisor selects the menu, he also provides a supplier base, checks the premises and trains staff. The most famous representatives are Subway, McDonalds;
• Production. The most profitable and least liquid way to invest in a franchise. You can produce as a franchise: vegetables, flowers, bakery products and other similar products. The franchisor most often participates in the creation of production, shares creation recipes and his 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 company. Essentially, you are simply opening a branch store. Famous brands – H&M, Timeout.

The choice of field of activity entirely depends on the preferences of the businessman. In each segment 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 production sector remains the most difficult, and the retail trade sector remains the least demanding of manager qualifications.

Step 2. Selecting a specific franchise and completing training

After choosing a niche, you will need to carefully study all franchise offers. To do this, you can use ours. Your profit directly depends on the choice you make.

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 generate long-term income. But a bad partner will only be able to 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 a supplier base;
• Clear rules and requirements;
• Real profitability figures;
• Investments in advertising.

All these points show the attitude of the franchisor towards franchise buyers. Famous brand there is no point in selling a low-quality product – including your name. The training 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 studies the needs of the region and compiles a supplier base speaks volumes about the quality of business. Only those who bet on results can afford to invest money in information and its analysis.

Having clear requirements is a constant 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.

This is also aimed at maintaining the brand. And investments in advertising imply that, mostly at the expense of the franchisor, the businessman will be able to receive good advertising your business and quickly attract clients.

Step 3. preparation of documents

At this stage, you should choose the organizational and legal form under which you will operate as a franchise. There are two options for doing business: as or.

Running a business as an individual entrepreneur has a number of advantages:

• Ease and speed of opening.

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

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

At the same time, an LLC has one significant advantage - in the case of liability, liability can only be recovered from the company’s property.

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

When choosing a legal form, you should take into account 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 premises

In any business, premises play a huge role. That is why every franchisor has a clear idea of ​​what it should be like to conduct business successfully.

When studying different franchises, the conditions will each time indicate the requirements for the premises.

In most of them:

• Volume from ** square meters;
• Availability of running water;
• Compliance with all safety standards;
• Various specific features. Vary from business to business.

Some allow their franchisees to rent premises, others insist that they own it.

Most franchisors that operate in different regions of Russia have their own databases of suitable premises for each city. You can also use consultants from franchisors who short time will find a place for 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 contact information for all suppliers, or is completely responsible for the purchase and delivery of equipment. Specialists can also handle the installation of all equipment. About 80% of all costs before opening are spent on premises and equipment preparation 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 due to the high price, the quality of the equipment will be appropriate.

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

Step 6. Preliminary preparation

The process of preliminary preparation includes: purchasing goods, preparing the premises, conducting advertising campaign and test launch of a store/restaurant. This process will be led by the franchisor’s specialists: their the main task– find flaws and eliminate them before launch, simultaneously teaching the businessman various intricacies of doing business.

Preliminary preparation of a business can take from 1 to 3 months.

Step 7. Starting a business

After preliminary preparation, it’s time to launch the business. During the first time after launch, the franchisor’s specialists and analysts will closely monitor what indicators the store/restaurant shows. After several months, the franchisee will have greater freedom, for example, to vary the store's assortment.

After 1-2 years have passed, the franchisee will be able to completely take control of the business and choose suppliers of goods, train employees independently and build a sales line as he sees fit.

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

All about paying the franchise

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

When selling a franchise, the franchisor can choose two paths:

• Require only a down payment that will cover all costs of assistance in starting a business;
• Require an initial payment, as well as monthly (quarterly or annual) contributions equal to a % 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 incur 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 of markup on goods;
• Fixed royalty.

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

At the same time, as mentioned earlier, if the franchisor sets as a franchise fee 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, hand over 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 business profitability. True, most franchisors take into account the profitability of their projects, so they set quite adequate rates of 5-15% of 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 one more fee - advertising. Thanks to it, an advertising budget is formed, which is spent on promoting the entire brand in all regions. Thus, by paying from 10 to 100 thousand rubles per month, depending on the volume of business, you will be able to receive full-fledged advertising in your region, as well as increase confidence in the brand throughout the world, which also has a positive effect on sales.

Examples of franchises

Finally, let’s look at 3 large franchises in three different areas: McDonald’s, Pyaterochka, Lacoste.

McDonald's.

Appearing on Russian market relatively recently, a large catering giant began to dictate its own, rather strict conditions.

In order to obtain the right to use a McDonald's franchise, you must:

• Have a capital of 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 and not borrowed. You can pay the remaining 50% over 7 years at a minimum interest rate from the company itself;
• Complete paid training. Tuition price – $10,000;
• Have extensive experience in business or food service.

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

McDonald's lump sum contribution is 45 thousand dollars. Royalty – 12.5%. Payback period is 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.

Conditions:

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

Lump sum payment - 750,000 - 1,000,000 rubles. Legally, there are no royalties. But here lies one important detail - the franchisee, according to the agreement, receives a commission in the amount of 14 to 17% of the store’s income. Quite a profitable scheme for beginning entrepreneurs.

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

Lacoste.

The most controversial on this list.

There are few requirements, but they are quite strict:

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

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

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

These three franchisors show very different approaches to franchising. One is a classic European with strict boundaries and an 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, down to the size of the room and the severity of the conditions.

Conclusion

Opening a franchise business is the most profitable way for beginning entrepreneurs to start their own business. In Russia, the most popular franchises are 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 achieve an income of 40 to 500 thousand rubles monthly.

In Russia, business is increasingly using franchising tools (benefits for entrepreneurs) as an organization for 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 the buyers of a ready-to-use business project and the seller of the brand benefit from it. Let's consider how to choose a strategy and organize work to create a franchise.

When engaged in entrepreneurial activity, every owner of his own enterprise thinks about expanding it, about how to create a franchise for his business, and have a constant profit from the brand he has created. To consider this issue, it is necessary to focus on special definitions, namely:

Definitions	Explanation
Franchising	In translation (preferential entrepreneurship), it means relationships (long-term cooperation) of a number of enterprises with a well-known brand.
Franchisor	The main office or company that sells well-known technologies and a license to use its trademark.
Franchisee	An entrepreneur who buys the right to use the brand of the main company in his business receives assistance from it in training staff.
Franchise	A ready-to-use business project, documentation and technologies for business development from the trademark owner.
Franchise relationships	They are based on the mutual benefit of the entrepreneur, both the participant who bought the franchise (increased 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 business from representatives of a well-known brand (franchisor), he becomes a franchisee for him. He is provided with training and support on the job, does not have to look for suppliers, and also has the opportunity to purchase equipment with big discounts from the franchisor’s partners.

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

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

The seller-buyer relationship is optimized.

The issue of product competition is being resolved.

Franchise relationships

It is necessary for businessmen who are thinking about how to create 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 trademark of the organizing company.

Both sides win in this relationship:

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

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

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

It often happens in these relationships when, in addition to advertising, leasing equipment, technology, it 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.

Experts distinguish several types of such relationships, these are:

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

Creating a network using product franchising, ─ when a network of services for the population or sales of products are required to use the trademark of the main company, which also provides new techniques, does advertising, supplies equipment, and conducts training for small business employees.

In addition to positive aspects consider and Negative influence for the activities of an entrepreneur under a franchise ─ when the contracts contain restrictions on conducting economic activity, when the franchisor creates the conditions of 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 the question of how to create your own franchise ─ it is necessary to understand why a novice entrepreneur, in addition to receiving equipment and materials almost for free, 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 follow in their business the path that you have “trampled.” For this reason, before starting 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, it will be much easier to attract customers to buy a franchise.

How to form a franchise

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

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 funds and resources do 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 through outlets. You need to understand what experience you can pass on to franchisees. Based on the answers to the questions, you can understand who will be interested in working with you and begin forming a franchise.

Requirements for the franchisor

Let's consider the activities of a certain company that will explain ─ how to create a franchise yourself, and answer what requirements apply to franchising, as well as what goals need to be achieved. Let's consider the goals:

Receiving specific profit from franchising as additional income.

Increasing the sales network, opening stores and retail outlets.

Achieve an increase in product turnover for franchisees of at least 150 thousand rubles in 30 days per outlet.

You can indicate a list of cities in which it is planned to open trade and expand business based on regional characteristics.

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

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

Work on the popularity of the brand, creating a good image among customers.

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

Load available capacities to their maximum capacity.

Work with partners to achieve profitability of their stores of at least 30%.

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

There is a reasonable risk that when simple goals are set, the profit may not cover the costs that will have to be spent on promoting the franchise. Going too high with too much ambition can put the franchise team in a dead end.

Russian legislation is not distinguished by strict measures regarding the activities of the franchisor, therefore, how to franchise your business ─ at the legislative level there are advisory requirements for the main companies.

Experts say that any company can declare itself a franchisor on the territory of the Russian Federation, and there is no law prohibiting this activity, even if it is not engaged 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 that the franchisor must fulfill.

Availability of at least one store selling your products.

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

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

Have a registered trademark or sign.

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

How to start a franchise without having your own brand, technical specification (trademark), ─ at a minimum, experts believe, submit to the patent office a package of documents on the types of products with which you will work to obtain priority of the application, this is your first document. Experts note that the time interval from submitting documents to receiving a trademark is at least 12 months.

The desire to start selling a registered franchise as early as possible comes up against a circumstance ─ the status of the copyright holder, which gives the legal right to receive royalties ( compensation 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 network of partners (lump sum) will be described.

Experts recommend at this stage to conclude a licensing agreement with partners based on preliminary agreements, which reflect the signing of the main license agreement after receiving the status of the copyright holder. This agreement acts as a guarantee of the signing of the main agreement for both parties.

Franchise package

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

a developed business concept with contracts;

have your own network;

availability of documents for franchising.

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

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

opening new points for a specific period;

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

indicate at whose expense the new employee will be trained if the old one leaves the franchisee.

Whenever opening a franchise, territorial issues will arise that need to be properly regulated, because your retail outlet and the franchisee’s outlet may be in the same region. Resolve issues with wholesalers regarding the supply of materials. It is difficult for a beginning franchisor to understand these issues.

Existing franchise standards

How to create a franchise for your business that meets established standards (not strict)? Experts recommend some basis that shows how to apply a brand (logo, trademark).

Name	Requirements
Brand description	History of creation, how the brand is positioned. For which target audience she is being released. Availability of logo. Its sketch, description of security, options for unacceptable uses. Business card with a trademark. Badge for employees, company logo.
Premises for a retail outlet, organization of an enterprise	Format of products traded. Necessary requirements for production premises. Selection of premises according to the required dimensions. Exterior design of premises and buildings. Equipment and technical documentation. Required software.
Employees	Required minimum staffing and their qualifications.
Products and services	Characteristics of the products sold and what types of services are provided.
Training	Distance or face-to-face learning. Marketing certification and training.
Reporting	Necessary payments to the franchisor, the company’s own documentation.
Business hours, retail outlets	Time interval of work by hours, days, months for the current year.

Operational management involves standards:

conclusion of an employment contract;

agreement on material, or individual responsibility personnel;

agreement on the confidentiality of all information (corporate ethics);

employee profiles.

Advantages of opening a franchise, possible disadvantages

The businessman who opens the franchise receives:

new investments in your business through contributions from partners;

supply conditions are improving (increasing volume);

business improves regionally due to the activities of franchisees.

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

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 perform well;

Franchisees' profitability 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 the entrepreneurs (partners) who bought the franchise. Be sure to maintain constant contact with the franchisee. Conduct employee training on new technological process techniques.

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Franchise catalogue. Turnkey business. Help in selection. profitable business by franchise Zavitinsk - catalog of franchises

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 purchasing a franchise, etc. We also recommend that you read the following articles: “what is a franchise” and “how to create a franchise for your business.” […]

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Franchise catalogue. Turnkey business. Help in selection. opening a franchise business Mozhaisk - catalog of franchises

How to open a franchise: advantages and disadvantages + choosing a registration form + 8 steps to opening a company 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 several years, has stood the test of time, is in demand among buyers, and all organizational issues and advertising moves to promote the product have already been established.

It is because of this that novice entrepreneurs often wonder how to open a franchise store.


This article will help you find the answer to the question, how to open a franchise business, and what you should pay attention to 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

Advantages of a franchise

This type of income has huge advantages, which attract novice businessmen:

Opening a franchise store means 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 a franchise business.

For beginning entrepreneurs, providing such assistance at the development stage is simply necessary.

To open a franchise business, no need to come up with a new direction or create a strategy from scratch to bring your 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, is 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 his own resources.

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

An important fact is obtaining a loan for a large amount.

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

In a normal 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 a business plan, which are often only approximately calculated:

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

But thanks to the franchisor, the aspiring entrepreneur receives reliable and practice-tested information By .

This minimizes the risk that things will go in the wrong direction or unforeseen expenses will arise.

Disadvantages of the idea of ​​how to open a franchise business

Having considered the advantages, we move on to the disadvantages, which can lead to the destruction of the business at the start if you are not aware of 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 premises of the enterprise with the help of an additionally installed store or cafe.

A successful example of the latter is the Pokrovsky Bakeries retail chain.

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 demand for production, then there will be profit accordingly. This means the direction has been chosen correctly!

d) Children's products.

Formulas, toys, pacifiers, and clothing, baby hygiene products - all this will definitely be purchased by mothers for their babies.

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.

d) Clothes, shoes.

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

However, before starting, 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 of each direction are easily determined in your own city through analysis.

Step 2. Prepare documents

To start your entrepreneurial activity, the business must be registered.

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

Now let's look at 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 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 matter.
An enterprise can be called almost anything (except for cases prescribed by law).	Reporting is several times greater than that of an individual entrepreneur
Sold or divided at the request of the founder.	Fining system from tax office and others government agencies much stricter than for individual entrepreneurs.

The founder must take into account that some stores cannot be opened as a franchise as an individual entrepreneur. This list includes the implementation alcoholic drinks, military industry, security agencies.

Step 3. Deciding on the room

The franchisor pays special attention to the choice of premises.

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

• favorable location, which contributes to successful business;
• a large area of ​​the store in which trade will be carried out;
• compliance of the interior decoration of the premises with the “spirit” of the business;
• availability of space that will be used for storage.

Of course, finding an area that satisfies all the franchisor’s requirements is not easy. But if you have dealt with this, then you can submit an application 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 is received, the entrepreneur is told a number of requirements that he must fulfill.

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

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

This method allows the franchise founder to weed out insolvent entrepreneurs. Also, in this way, it can prevent unjustified costs that are associated with joining a person to a business network.

Step 5. Preparing the store for opening

After receiving a franchise, you need to make repairs to the premises to meet the specified requirements and purchase the necessary equipment.

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

Step 6. Recruiting staff for the store

Basically, the copyright holder himself recruits staff and trains workers according to his own developed program, while covering all costs for this process.

Most shining example- This is the McDonald's chain. All its employees must act according to a single brand code. And franchisors monitor 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 budding entrepreneur will only need to pay for the supplied products at the company’s established price.

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

Step 8. Launch the store

The franchisor is fully interested in his business developing and generating income. Therefore, he bears 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 we should also not forget that a 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 opening their own business, but cannot decide to take such a step. The main reason for indecision is the lack of an idea and fear of risk. Therefore, franchise business is increasingly attracting the attention of newcomers. Let's 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. Under the foreign word lies the opportunity for any person to work under the name of the brand they like. And it doesn’t matter whose logo it is – Russian or foreign. The main thing is that the consumer knows it, and the owner gives the opportunity to make money on his name. A franchise is an agreement offered by the owner of a brand to an entrepreneur.

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

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

Financial side

So, you are offered a ready-made case. Take it and use it. But the brand owner is ready to share not just like that, but for a certain fee. These conditions may vary for each franchisor.

What you must pay the franchisor:

1. Lump sum payment.

This is the initial payment that is required to enter into a 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. Royalties.

The monthly payment is in favor of the owner and it depends on the percentage of the franchisee’s income. In other words, an entrepreneur needs to pay a kind of profit tax to the brand owner every month for the opportunity to receive income.

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

There is, of course, another way to open a franchise business - without investment. The principles of a franchise without investment are that an entrepreneur applying for such a right must convince the owners of the trademark 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 a lump sum fee and royalty to the brand owner.

Pros and cons of a franchise

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

pros

1. Brand awareness.

The popularity of the company inspires consumer confidence. There is no need for promotion or PR. Seeing a familiar name, the client will come on his own, and not out of curiosity, but to purchase a product or service. Onlookers who do not belong to the required contingent will be bypassed.

2. Business support.

The franchisee will never be left without attention, necessary instructions and training. For any reason, you can contact a specialist. At the first stage, assistance is provided even in the design of the room, if required by the brand. In another type of business, a beginner will have to solve all the issues on his own.

3. Guarantee to the bank.

If you have 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 beginning entrepreneur. When choosing a franchise, the brand owner will support you; he will guarantee the return of the loan funds to the bank. Agree that it is safer to provide funds for an already established business than to later look for a bankrupt client.

Minuses

1. Harsh conditions.

It is necessary to work according to certain conditions, which are dictated by the owner. Deviation from even one point may result in fines being imposed on the brand tenant or termination of the franchise.

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

If the brand suffers losses or goes completely bankrupt, then the entrepreneur who leases the right to work under this brand will have to fold, no matter how well things are going for him. The fact is that if the supplier of a product 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 an entrepreneur is not satisfied with a new business only after the project has been launched or other circumstances have arisen to close the business. But some types of franchises strictly stipulate that they have the right to sell your department to another entrepreneur at a lower price.

The rights of the franchisee extend only in accordance with the signed agreement.

3. Limitations in the choice of suppliers.

You can only purchase equipment or raw materials from certain individuals, which may be disadvantageous based on location. Attempts to circumvent this clause will result in termination of the contract.

4. Expenses.

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

Legal regulation

When thinking about opening a franchise business, you need to study legal regulation such an agreement. Franchising in Russia is a relatively new direction in business, so 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 prescribed in Chapter 54 of the Civil Code of the Russian Federation. But it's not serious legal form, and therefore some entrepreneurs try to pass off a completely different direction in business as a franchise, having absolutely nothing to do with the brand. 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.

Franchise registration is carried out only by the department that issued the right to a certain brand to its owner. If such registration of the agreement is not made, the transaction will be considered illegal.

To eliminate all risks and surprises, you need to look at a sample contract for the brand with which you intend to cooperate. You can request it from the company or view it on the official website. Also standard contract franchise can be downloaded from websites where catalogs of companies offering franchising are compiled.

Franchise business areas

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, when opening a business, very often, without trying it out on their own, start selling franchises.

Activities:

1. Retailing.

Network retail type of activity. For a franchise, it is proposed to open a store that is known in many regions. For example, the familiar stores “Pyaterochka”, “Perekrestok”, “Magnit”, “L’Etoile”.

2. Catering industry.

This is a very popular type of business because food is always in demand. A successful example You can name “Subway”, “McDonald’s”, “Kroshka Potato”, various companies offering coffee to go.

3. Production.

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

4. Products 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 remain at a loss.

5. Clothes and shoes.

Products from well-known and not so well-known 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 certain brands of cars.

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

To purchase a franchise, you first need to register an individual entrepreneur. Franchise activities are only permitted commercial organizations or individual entrepreneurs. Individual Can't do business without registration.

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

First, study the situation in your city. It is possible that the type of activity you are interested in is already present on the market. Next, evaluate your financial capabilities, because any business requires investments. If the costs of a lump sum contribution are excluded, you will still have to spend money on premises, the purchase of goods or raw materials, equipment. Think about whether your responsibility to your consumer and partner scares you. Letting down a respected product brand means losing 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 for your investment might be. To do this, you need to talk to those entrepreneurs who are already in business to understand which technology works 100%. Although the owner of the trademark provides 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 give an example. The entrepreneur decided to expand his activities. I saw that there were few luxury furniture showrooms in the city and chose a narrow direction - kitchen furniture. I chose the Maria Kitchens brand as a partner. Spent it on rent retail space, where the main samples of the factory should be located, and purchased samples. The brand owner gave big discount for exhibition kits, but made a requirement that showroom samples 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 for free. After staff were hired and trained by the manufacturer, the salon began operations. But, despite the fact that preparations for the opening of the salon were successful, there are no clients. And all because the entrepreneur did not take into account that the cost of a set from the Maria’s Kitchen brand 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’s a completely different matter when the salon is opened in a big city, where there are more people with high incomes.

Terminating an agreement that has already been signed can lead to serious problems. To avoid problems, 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 deal 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 is a new concept for Russia, 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 type of activity 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 regulatory authorities, but with the support of an experienced lawyer, pitfalls in the agreement can be eliminated.

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 it is worth using the experience of those who have reached great heights and gained respect from the consumer.