A Word on Franchising.

Gaurav Marya’s first book, which is currently available in its fifth re-print edition, The Science of Reproducing Success, talks about how franchising has emerged in India as a growth industry with great potential. It further tells us how franchising provides the last-mile connect in the world’s largest consumption market. Written below are parts taken out from the best-seller book’s preface and inside chapters.

Though franchising may not be suitable for all forms of businesses, or for the fiercely independent entrepreneurs, it can offer numerous opportunities to those willing to work hard for a common goal. If you take the time to do the necessary investigation and analysis, your chances of success both as a franchisor and franchisee are assured.

But the important question remains: Why Franchise? The answer is: To reproduce success. Rather than just selling a business, what franchise companies really do is sell an idea. They sell the formula that they have developed and have been successful with. This formula can come in various combinations, but generally it comprises a trademark, a uniform operating system, training and consultation, and promotion. The franchisee has to follow that formula for success for its own success. And all that it has to give in return is an initial franchise fee, and ongoing royalty payments.

So apart from acquiring the formula of a proven and efficient method of conducting business, which is provided by the franchisors, the franchisee also benefits from the management assistance and training, as well as marketing assistance, which is provided by the franchisors. Franchisors normally conduct national or regional marketing campaigns developed by professional advertising agencies and help franchisees run local ad campaigns. The acquired cumulative experience of the franchisor is available to the franchisee at a nominal cost, which further helps making his business ready for success.

Sometimes franchisees are helped by their franchisors not just in preparing business plans and strategies but also in obtaining financing for their outlets. Financial institutions too may be more willing to lend the necessary fund to the prospective franchisee if a well-known franchisor is backing the applicant. It would be easier to obtain the funds when approached as a franchisee with a well-established franchisor, than as an entrepreneur with a new business concept. In the end, franchising provides an ambitious business aspirant with the benefit of the skills, knowledge and best practices in management, from people who have run a successful business over many years.

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