Franchising differs from other ways of doing business in that 90 out of 100 franchised businesses not only live for more than one year, but also operate at a profit. For comparison, only 15 out of 100 innovation-related startups make it to the end of their first year of existence. Although 7 of them go on to make crazy profits, there is an 85% chance of going bust. To open a franchise business means to act reliably - the enterprise will bring not fantastic, but good profit, and guarantee financial stability.

Where to look for franchise offers

In what area to open a business

One of the trends in the franchising market in recent years is an increase in offers Russian companies.
Cafe and restaurant franchises remain the most popular options, especially for businesses. fast food.
The second place is occupied by franchises of goods and services for children. The number of offers in the category of sports, beauty and health increased by a third.
A proven option is to open a medical laboratory where you can quickly take tests.
Slightly less attention to options in the field retail food and household goods.

It is important to know! Lost positions for Last year apparel, footwear and jewelry franchises - business growth in these segments declined by 45%.

Evaluation of supply and demand in the selected niche

Before you open a business, it is important to decide where your business will operate. Big city or small? Assess the purchasing power of the population - if people earn little, they will not be able to afford an expensive boutique or an elite restaurant. Determine the size target audience. If the number potential clients less than 2% of the number of people living near the enterprise, the profitability of the business is at risk.

It is a risky venture to open a business in a small town that requires highly qualified specialists. As a rule, they quickly leave for megacities. In a small town, you need to carefully monitor your reputation, because information spreads quickly.

Public service business ideas

On the other hand, the big city is expensive rent, high salaries, fierce competition, including for promising premises, and additional advertising costs. Without huge investments, it is impossible to obtain exclusive rights and defeat competitors here.

Which business is better to open in a small town:

• economy class hairdresser;
• sushi shop;
• children's development center;
• casual clothing store.

How much does it cost to open a franchise business: financial assessment

The amount of initial investment is the cost of rent, design project, renovation of premises, purchase of equipment and / or products, staff training, marketing. When buying a franchise, these costs will be halved. The franchising program, as a rule, includes: a design project of the premises, employee training, a brand book with layouts of promotional materials, and much more. For this support, the future partner must pay a lump-sum fee - a one-time payment for the right to work on a franchise. It is up to 10% of the cost of starting a business. There are programs without a lump-sum fee, when the initial payment, as a rule, is included in the mandatory purchase of a minimum lot of goods or equipment.

Franchising also includes the operational support of the partner by the owner of the program - the cost of brand advertising, research, regular consultations, evaluation of the effectiveness of the enterprise. For support, the franchisee pays royalties - a payment every month in the form of a certain amount or a percentage of turnover / profit. As with the lump sum, royalties can be in the form of monthly product purchases or advertising fees.

• inexpensive sweet fast food (waffles), takeaway coffee shop;
• legal consultation;
• advertising services;
• business to business, such as certification services;
• tourist agency;
• sale of plastic cards.

Analysis of proposals and negotiations

Important! If there is no franchise offer on the official website of the company, it does not exist. The company develops the network independently.

Franchises to Avoid:

1. fakes. Fraudsters copy elements of a well-known trademark and make a similar offer. A naive entrepreneur enters into a deal to open a franchise business. Not only does a fake have nothing to do with a well-known brand, its real owner can sue the franchisee.
   Examples of such franchises: ZaraZara, Eurosvyaz, etc.
2. One-day. An offer, very tempting on paper, is created for one purpose - to sell it and disappear into the distance. In order not to fall for the trick, look at the date of creation of the franchisor company and the start date of the franchise sale. If the company and trademark were registered almost yesterday, refuse.
3. Franchises not ready. This is an offer from a young company that honestly conducts business, but it does not yet have experience, proven business processes and normal support. The company may close itself soon, and with it the franchise program.

Important advice! Don't use a business plan for a franchisee that was written by a brand owner.

In the United States, by the way, it is forbidden by law to guarantee a specific income to a franchise partner.
It is useful for the future franchisee to research the market and make calculations. Often the task of the franchising division in a company is to sell more offers, and profitability figures may turn out to be overly optimistic. Do not take the promises of the franchisor on faith - check the information.

What kind of business from scratch can be opened in the village?

A future partner should communicate not only with company employees, but with other franchisees. It will not be superfluous to come to the place and see how the enterprise functions. Feedback from franchisees - current and former - will help you make the right decision. If the owner hides the contacts and location of his franchisees, it is a bad idea to open an affiliate business with him.

Signing an agreement with the owner of the brand

When an entrepreneur is ready to buy a franchise and open a business, the parties enter into an agreement. In the legislation of the Russian Federation there is no agreement on franchising, cooperation should be regulated by a commercial concession agreement. According to statistics, only a fifth of all franchisors offer partners such an agreement. However, if you are given a supply agreement to sign or information services- this is a reason to doubt whether the relationship of the parties is franchising.

On the basis of a commercial concession agreement (CC), the franchisor transfers to the partner certain conditions intellectual property (brand, trademark, technology) without worrying about its safety. The QC agreement, in turn, secures the right of the franchisee to benefit from cooperation, while the supply agreement does not guarantee the privileges of using the brand.

The future partner needs to check the registration of the franchisor's trademark with Rospatent. The document specifies the rights and obligations of the parties, the terms of payment. A deferred payment may be granted for the payment of the lump-sum contribution. Look at the duration of the contract. For example, Subway enters into a QC contract for 20 years. But most owners prefer a period of 3 years. That is, by the time the franchisee begins to receive highest profit the agreement will come to an end.

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 legal or to an individual use the company brand.

More simple:

Franchise – the right to use the brand, technology and experience of a well-known 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, choosing a place to do business, developing an initial advertising plan, and many other things that make it possible to succeed.

It is worth talking about advertising separately. Since in most cases you are buying a ready-made brand, the market has already taken care of it. 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, rough plan business activities and minimum 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 certain fee transfers it to the property of the manager. 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 the recipe successful business, as well as contacts of 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 study the positive and negative aspects of starting a franchise business, you need to touch on 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 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 various strategies, "stuffing 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. Majority large companies, who 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 successful brand in an average city or metropolis, which 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 from this that running a franchise business is great way 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 various services And only after that comes fast food. Food retail and occupies 3% of the total volume of the Russian franchising market.

Let's consider each of 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. It makes no sense for a well-known brand to sell a low-quality product - including its 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 for his 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.

Doing business like individual entrepreneur has a number of advantages:

• 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 easiest 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 managed by the franchisor's specialists: their the main task- find flaws and eliminate them even before launch, simultaneously teaching a 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 the financial side of the issue.

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 charges only a lump-sum fee as a franchise fee, 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 a business plan and leave in an unknown direction, leaving the businessman to deal with own project on one's 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, it is formed advertising budget, 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.

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

Conditions:

• 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. A great option for businessmen with no 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 having their own clothing stores.

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.

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 By .

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 is commercial 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 goods.

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 your 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

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:

Step 3. Decide on the room

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, well-known brands put forward two requirements for a new business under their patronage:

• 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

The most striking example is the McDonald's network. 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 according to set price companies.

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.

Useful article? Don't miss out on new ones!
Enter your e-mail and receive new articles by mail

• Where to invest at interest: 5 directions
• How to Become an Entrepreneur: A Beginner's Guide
• How to fill out a tax return: 12 rules

An integrated right to use a trademark or brand, as well as technologies, business practices and other forms of intellectual property, that one company sells to another to expand its network. The franchise price consists of a lump-sum fee (basic payment) and royalties (monthly deductions).

According to the rules of franchising, the franchisor company (selling the right) undertakes to research the market in your locality and make a conclusion whether the business will be successful for the franchisee (the party buying the right). However, many companies (especially if there is a large lump-sum contribution in the contract), in an effort to make a quick profit, may intentionally not notify you of low demand for products or services. Therefore, before buying a franchise, you must independently study the product you are interested in and analyze the market and target audience.

What are the types of franchises

By type of activity, there are three main groups of franchises:

1. Production- release of products according to the company's standards and under its trademark. With this form of cooperation, the franchisor must provide you with all the technological sequences, provide a list of suppliers of raw materials and equipment to equip the production complex.
2. Trade- sale of branded goods produced by partners identified by the franchisor. With such cooperation, the franchisor determines from whom you will purchase goods and at what cost to sell it, chooses where the store will be located and what area it should be.
3. Services- provision of services under the brand of the company. The franchisor must provide you with instructions on the procedure and conditions for the provision of services, as well as train hired personnel.

Franchising can be of two types:

1. Straight- transfer of the right to open one or more representative offices in the region. Such franchises do not require large investments and make it easy to enter the market.
2. Master Franchise- transfer of exclusive rights to all representative offices in the region. By purchasing such a franchise, you will be protected from the possibility that other companies will open in your area using a similar model.

Depending on the terms of the contract, franchises of the following types are also distinguished:

• Standard- the franchisor controls all stages of the company's activities and does not allow deviations from the standards adopted by him. This format is suitable for novice entrepreneurs, as it allows you to avoid many mistakes.
• free- the rules of operation of the franchisee enterprise are established conditionally. Such a franchise is suitable for experienced investors whose main goal is to quickly enter the market.
• With substitution- technologies and methods of work are established by the franchisor, but you can choose suppliers yourself. This format is suitable for manufacturing enterprises in remote regions.
• Shelf company- the franchisor opens a representative office, fully dealing with organizational issues, and then sells or leases it to the franchisee with the subsequent payment of royalties. This model requires high starting investments in business, but it is also the easiest way that starts to make a profit in the shortest possible time.

How to choose the right franchise

After you decide on the direction and type of goods or services, you should start looking for suitable offers. To do this, you can conduct independent market research or use online catalogs(franch.biz, franshiza.ru, beboss.ru, greens-idea.com). To choose a reliable franchise, the following instructions will be useful to you:

• When choosing a destination, pay attention to the cost of the franchise. The latter includes a lump-sum fee and royalties that are paid for the right to use a trademark and business model, but do not include the costs of equipment, rental and the first purchase of goods or raw materials. This means that the business inexpensive franchise production of goods may require much more investment than trade or services with a large lump-sum contribution, since it requires additional investments.
• When choosing a specific product or service, study the competition in your area. If it is high, even the most reliable franchise may not be a profitable investment.
• Select a few offers in your direction and compare the conditions.
• Study the history of each company and personally visit the existing representative offices in your own and neighboring regions. If the company is very young (it must be at least 5 years old) and does not have its own divisions, most likely you have an unreliable partner in front of you.
• Analyze feedback from customers who buy goods or services from selected franchises. Goods or services must be real and in demand in the market.
• Negotiate with entrepreneurs from neighboring regions (in order to avoid a conflict of interest, it is better not to contact representatives in your region) working under this franchise. Learn the strengths and weaknesses of the business.
• Assess the level of investment in your own business. If you are offered to start a business under a free franchise, in most cases this is a standard offer for the supply of goods for sale.

Step 2. Concluding an agreement with the franchisor

After the initial selection of proposals, before concluding an agreement, you need to study the features of the transaction in more detail. To do this, it is required to hold a preliminary meeting with representatives of the franchisor's company and obtain legal advice on the proposed contract.

How to conduct preliminary negotiations

The first meeting with the franchisor is usually held at the office or in the co-working center if the company does not have a representative office in your area. If you are invited to a cafe, most likely you are dealing with a fictitious or unprofitable franchise. An exception may be the option when the meeting is scheduled at the cafe whose franchise you are buying.

If you are an aspiring entrepreneur, if possible, invite an experienced business consultant with you to the meeting. You should ask the franchisor for the following points:

• Availability and terms of registration of copyright for a trademark. It is not uncommon for a franchisor to sell rights to a brand that is not registered or ownership expires before the expiration of the contract with the franchisee.
• Amount and schedule of payments. You must provide detailed information on lump-sum contributions and royalties in national currency. If amounts are in convertible currencies, the exchange rate must be specified. Royalty can be a fixed amount or expressed as a percentage. Sometimes royalty is linked to the volume of the enterprise (for example, to the area of ​​the trading floor).
• Organizational expenses. Many companies, in order to attract franchisees, make the lump-sum fee minimal or do not include it at all in the contract. On the other hand, it often turns out that in this case, the franchisee is charged with the costs of creating design projects for outlets (shops, offices), training staff, and issuing permits.
• Choosing a business location. Going to a meeting with the franchisor, you can choose in advance several locations where you would like to place your enterprise, but your future partner may himself offer you cost-effective options that you cannot refuse in the event of a deal.
• Support level. Ideally, the franchisor should provide you with comprehensive assistance and advice until the business reaches the desired level. But many companies provide little to no support during the start-up period, which can be a deciding factor for newcomers.
• Level of control. You need to know how strict the rules for the franchise you are interested in are, as well as determine the boundaries for making your own decisions (what you can change and what not). This applies to the purchase of equipment, raw materials, goods, as well as pricing and overall strategy.

Many people want to start their own business, but can not decide on this important step. The reason for such indecision is the lack of an idea or the fear of failure. Therefore, as a result, newcomers stop at the option of building a franchise business.

This article provides information on how to open a franchise, what are the advantages, disadvantages and other nuances in this business.

Franchise Features

When concluding a franchise agreement, the terms of cooperation between the two parties are prescribed. The agreement guarantees the franchisee (owner) the right to exercise commercial activity on behalf of the franchisor, using ready-made schemes for the provision of services or the sale of goods under the name of a well-known brand.

The franchisor, as a rule, is a well-known company or corporation that has managed to establish itself in the market with positive side. In addition, it must have a positive image and a good reputation among consumers. Successful European, American and Chinese organizations are actively promoting the franchise, thereby expanding the geographical boundaries and opening new offices to sell their own products and services. How to open a franchise?

The franchise buyer is granted exclusive rights to carry out business activities under the brand name of the trademark. The franchisor, for its part, undertakes to ensure the following:

1. A working and efficient business project.
2. The possibility of using the results of intellectual property.
3. Form style and maintenance plan.
4. Training of employees and improvement of their qualification.
5. Constant interaction, support and advice.
6. Marketing promotion.

All of these tools allow you to guarantee a stable profit with a total payback period of a year and a half.

material side

For example, a person decided to open a franchise travel agency. To do this, he signed an agreement and received a ready-made business, it remains only to take it and start using it. But the owner of the company shares the trademark not just like that, but on certain conditions. Each franchisor is different, the most commonly used schemes are:

1. Payment of a lump sum. This is the initial payment that must be paid in order to enter into an agreement. Is it some kind of membership fee or rent for the brand. The amounts of such contributions are so large that a novice businessman simply cannot afford them.
2. Royalty. Paid monthly to the owner. The amount depends on the percentage of the franchisee's income specified in the contract. In other words, the entrepreneur must pay a kind of profit tax to the trademark owner on a monthly basis.

But not everyone includes these concepts. Conditions are case specific. Some organizations take only a lump-sum fee, while others, on the contrary, do not have it, but the franchisee is required to pay a monthly royalty. There are cases when the owner of the brand requires payment of the first installment and commissions for each month. Therefore, before deciding to purchase a franchise, you should realistically assess your own capabilities.

Is it possible to open a franchise store without investments? Yes, there is such a way. Its principle is that the entrepreneur who claims this right must convince the trademark owner of his ability to take the business to new level. This is a very difficult task. In rare situations, the franchisor is willing to become an entrepreneur's investor.

Franchise Benefits

A franchise, like any other commercial direction, has its pros and cons, which an entrepreneur should be aware of in advance. Starting a franchise from scratch is a daunting task, which involves managing the relationship between the brand owner and the businessman.

The benefits of starting your own franchise business include:

1. An entrepreneur buys a ready-made business that has managed to establish itself in the market. It includes assistance in organizing, consulting, supply of raw materials and other components. The acquired trademark is already popular in the market, so the businessman does not have to spend money on its promotion.
2. For this line of business, it is considered the norm to consult with the franchise owner, support in establishing relationships with suppliers, service companies, advertisers and so on. The franchisee does not need to reinvent the wheel, it has already been done for him.
3. A loan to open a travel agency franchise, for example, is much easier to obtain. When applying for a loan, the owner of the brand can act as a guarantor of the security of the transaction - this is a big plus. Ordinary entrepreneurs do not have such a privilege.
4. Low requirements. Franchise business does not require specific knowledge. It is enough for the buyer of a trademark to have some knowledge in the chosen area and elementary management. But you won’t be able to do without spending at all, funds will be required to improve your own business.
5. The ability to predict the financial situation. When starting your own business, it is very difficult to accurately calculate the profit. But in the event that you decide to open a coffee shop franchise, for example, everything will be much easier. The entrepreneur is provided with a large amount of data, the use of which will certainly lead him to an accurate forecast of the situation of prospects.
6. No need for market research. All necessary information collected and provided by the trademark owner. This is a huge time saver and a guarantee of getting results in the first month of work.

Franchise Disadvantages

In addition to the obvious advantages, this form of business has significant disadvantages:

1. To open a franchise store, you need big investment. Purchase ready business and its launch requires significant financial costs. As a rule, novice businessmen do not have a large amount of money or they are afraid to spend it, respectively, few people consider this option.
2. Almost complete dependence on the franchisor. This is especially true if the brand owner incurs losses. This will inevitably affect the entrepreneur as well.
3. Obligations to the franchisor. Personal earnings will have to be shared with the owner of the brand. But the percentage of his share is very small, so the entrepreneur will remain in the black.
4. Foggy prospects. The liquidation of the franchise network leads to the mandatory closure of the business. The franchisee has the right to operate only as long as the agreement is in effect.

How to open a franchise, where to start?

First of all, it is necessary to determine the direction of activity. Experts advise choosing what is of interest and what a person understands. Especially if it's the first time. If, for example, a future businessman knows nothing about computer technology, then you should not open an office equipment store. If you are interested in fashion, you can safely open an online store of stylish clothes and accessories as a franchise. If you want to use the knowledge gained over the years of study at an economic university, study the offers of credit institutions.

In addition to personal hobbies, you need to remember about the financial side. Buying a franchise business is not difficult, but they all differ in initial cost and subsequent investments. The most expensive are the offers of restaurants, hotels, fitness centers and hypermarkets. Retail Stores are much cheaper.

Purchase method

There are several ways to buy a franchise:

1. Investment of own funds.
2. Bank loan.
3. Investment by the brand owner.

The most obvious option is to buy a case on own funds. But not everyone has this opportunity. Therefore, most entrepreneurs start building their own business with money borrowed from the bank.

There is a third option that allows you to open a franchise store without investment. It involves funding from the company selling the franchise. This can only be done if the franchisee is already working in the right organization, and she practices a similar form of relationship with employees. An enterprising employee can be appointed to the position of branch manager, and after a while become its owner.

If this option is unacceptable, then you can look for an investor on the side. The mere fact of acquiring a franchise significantly increases the chances of success - businessmen are more willing to invest in established brands than in start-ups. This is explained by the fact that no one can guarantee the success of the latter.

Choosing a profitable business

There are special organizations that provide a list open franchises in Russia, but you can contact the owner of the selected trademark yourself. The choice of such companies is great, but are they all profitable? Here are the main signs that the chosen brand will be profitable:

1. Wide network of operating points. When a company has a lot open points and all of them are successful, it can be concluded that the brand has a future.
2. Lifespan. It is better to choose an organization that has been operating in the market for some time and managed to recoup the investment. Otherwise, there is a great risk of running into those who are not doing well, and they sell franchises to cover their own expenses.
3. Entrepreneur support. It is necessary to find out in detail what kind of assistance the brand owner is ready to provide to the buyer. All support measures should be recorded on paper, do not take a word.
4. Business plan. Serious institutions provide ready business plan and materials on evaluating the effectiveness of the selected project. One-day companies only assure that it is profitable to open this franchise, without indicating any specific figures and without giving guarantees.

It should be understood that even the most successful franchise cannot guarantee one hundred percent success and high income - a businessman must put in a lot of effort and effort himself. It is necessary to carefully study the market with which it is supposed to work - is there an interest in the audience for the selected services or goods, are there analogues, what are the prices and what do competitors offer.

Next steps

Don't know how to open a franchise? After all the benefits and risks have been calculated, and the choice of a franchise has been made, several more important steps will need to be overcome:

1. Commercial project update. As noted above, brand owners, focused on long-term cooperation and results, provide a ready-made business plan. It includes financial planning and an estimate of the necessary investments. This is a standard project that requires some modifications as conditions vary depending on the city and point location. The requirements for opening in Samara will certainly be different.
2. Rental and renovation of premises. Before choosing and renovating a space, as well as hiring employees, it is worth learning about the requirements from the brand owner. Many companies set strict limits on this - the area and location of the premises, design, team composition, and so on. Some franchisors help resolve all related issues and provide a ready-made design project. The most thorough organizations independently train employees, send merchandisers and organize the grand opening of the office.
3. Planned interaction with the seller. After the purchase and opening of the store, the parties are not limited to regular payments, the brand owner takes an active part in the activities of the new outlet. The franchisor provides marketing support, conducts training and retraining of personnel, develops promotions to stimulate sales (special offers and sales). Retail stores receive recommendations from buyers for the purchase of specific products. The parties regularly interact on the issue of procurement and delivery of goods.

The payback of a franchise depends on many things, but on average, these terms are much less than when starting your own business, built from scratch. And the benefit is more stable, since the entrepreneur is insured against many difficulties that will arise when doing business on his own.

Franchise cost

The cost of the selected project directly depends on the field of activity and the popularity of the selected brand. Of the huge list of options available, the most popular and cost-effective are fast food outlets and clothing stores, and you can also open a pharmacy franchise.

The amount of a lump-sum payment for a medium-sized business starts from 150 thousand rubles. A popular brand like Adidas will cost $20,000 and a StarBucks outlet will cost $150,000. Each trademark owner independently determines the final cost of the franchise, taking into account the estimated profit of the franchisee and the assessment economic efficiency for your own business.

Should you start a franchise business?

Is it profitable to open a franchise? Yes, if you do it right. Before making a decision, it is necessary to analyze the socio-demographic characteristics of the area and the level of competition. An objective assessment and detailed consideration of the market situation will prompt a novice businessman which direction to choose.

Franchising, as a form of entrepreneurial activity, is the most promising and effective way running a small business. Both parties involved in the transaction receive favorable conditions for their own development. The seller, who is the owner of the brand, gets the opportunity to expand the boundaries of sales and attract new consumers of his product. The franchise buyer receives a proven and working business scheme, as well as the active support of the franchisor and assistance in resolving important issues.