How to buy a franchise and start your own business. What you need to open a franchise business - step by step instructions. How to open a franchise store

Experienced entrepreneurs and newbies alike choose between opening a franchise store and own business plan... The main advantages and disadvantages are considered on the example of 3 most popular retail franchisors in Russia: Pyaterochka, Perekrestok and METROvskaya Fasol.

How to open a franchise store

Basic terms and concepts you need to know to open a franchise store.

Before choosing a partner, it is necessary to assess the strength. The franchisor will require the fulfillment of a number of conditions stipulated by the contract. Failure to comply - sanctions.

Experienced entrepreneurs choose by marketing packaging, get acquainted with the conditions, and make a purchase decision only after carefully reading the cooperation documents. You can ask a lawyer for help.

Franchise VS self-opening

By opening a franchise store, a businessman saves time and effort, but not money. He gets a run-in business model. This is convenient for those who are not launching their first project, and, for example, in order not to depend on one direction, they choose another, little familiar.

The lump-sum payment pays for the time that an entrepreneur would spend on identifying the nuances. However, experienced businessmen do not accept the requirements and rigid frameworks well.

Franchises save inexperienced entrepreneurs from mistakes and teach the basics of company management. The mentor guides and supports the junior partner, preventing big mistakes. At the same time, the business is shackled by the ideas and intentions of the franchise owner.

To those who are tired of hired work and the diktat of the authorities, independent discovery will do. In this case, the entrepreneur is the creator. Creates its own unique business mechanism. Saves 30% of capital and spends 1.5 times more time.

Rice. 2. Sample display in the store "Red Food"

Advantages and disadvantages

Advantages:

The franchise buyer receives guaranteed assistance from their franchisee. Consulting is valuable because the franchise seller continually calibrates the terms of their product and business format. Learns from his own and partner mistakes. Introduces changes. Leads the aspiring entrepreneur to the first result.
No need to come up with new ideas and development strategies. You only need basic knowledge in the area that the franchisee chooses.
Before opening a franchise store, there is already an idea of the popularity of the product, the promotion of the brand. Niche testing and loss of test resources are unnecessary. Reduction marketing costs.
There are cases of obtaining a loan to finance the start-up capital of a junior partner. The collateral for such loans is the property of the senior partner and the surety. Otherwise, it is impossible to get money from a bank for a startup.
The franchisee receives a detailed business plan. Calculated profitability and initial costs. The payback period and return on investment is clear.
Large franchises limit the number of partners per locality. This partially removes dependence on competitors.
Advertising support. Founder of the franchise at the expense of own funds conducts advertising campaigns and brand promotion. This makes the chain of his stores recognizable in every city.
Ready-made bases of suppliers, goods, contractors.

Disadvantages that lead to failure or force a novice businessman to refuse to buy a franchise:

Dependence of the business on the founder of the franchise. The development strategy remains in the hands of the brand owner.
Initial requirements when opening a franchise store. Renovation of the premises in the chosen style, the uniform of the sellers, the amount of the initial investment.
Dependence on the state of affairs of the entire network in the market. The actions of other partners or the owner of the franchise can affect the reputation of the chain. Poor service or products will scare consumers away from the brand.
The cost includes the profitability for the franchise seller. Advertising costs, personnel, communications, etc. increase the price. A business in which a business is a commodity also has a profitability and a margin. In other words, a similar project will cost 25-30% less if you enter the market yourself.
Periodic royalty payments. They reduce the profitability of the store owner.
The agreement establishes the rights and obligations of the parties. In case of deviation from the agreement, the parties incur additional costs and fines.

Opening stages. Step by step plan.

Overview of three retail franchises

Reference. Reverse franchising - type entrepreneurial activity in which recurring payments are received by the person who bought the franchise. The buyer is an investor. The franchise seller opens a subsidiary at the buyer's expense.

Bottom line. The advantage of opening a franchise store is information support. A novice businessman follows a well-trodden path, and a senior partner, interested in his development and profit, tries in every possible way to protect the “junior” from problems and dangers.

Large franchisors provide round-the-clock support, hold meetings and conferences, innovate, share document templates and best practices in business processes.

Franchising is considered one of the most successful forms of entrepreneurship, in which commercial activity is based on the acquisition of rights to use a trademark and a ready-made business plan.

What it takes to open a franchise

Starting a franchise requires a certain amount of funding. To start your own business, you will need start-up capital to cover the ongoing costs of concluding a contract and making priority contributions. you can use your own funds, government subsidies or bank loans.

Interesting fact: many banks willingly help entrepreneurs open a franchise business and provide the necessary cash... Lending to franchise systems has the lowest degree of risk and is more secure than other loans to small businesses.

To open a franchise business, you first need to choose the organizational and legal form of the enterprise and register with the Federal Tax Service.

The next step is to make a one-time lump-sum payment. This amount covers the cost of using a trademark or brand for a predetermined period.

The lump-sum fee consists of the operating costs that the franchisor's side will incur in providing and registering the franchise for the second party.

The cost of the lump-sum payment will depend on:

the degree of support and the concept of the franchise system;
brand awareness and popularity;
holding marketing research and developing an operating business strategy;
lease and arrangement of premises.

Additionally, the signed agreement will indicate the amount and terms of regular periodic payment for the use of intellectual property. These payments are referred to as “royalties” and can be paid according to two conceptual schemes:

as a percentage of gross profit;
as a fixed amount.

How much does it cost to open a franchise

The acquisition cost of such a project will directly depend on the brand awareness and its position in the market. Of the entire list of things that can be opened under a franchise, fast food and fashion chains are considered the most popular and profitable.

The amount of the lump-sum contribution of medium-sized franchises starts at 150,000 rubles. For comparison, the cost of the Adidas franchise is $ 20,000, while the popular StarBucks coffee chain will cost $ 150,000. Each franchisor sets its own financial bar based on the potential profit of the franchisee and economic effect for the owner of the trademark.

Is it worth opening a franchise

Franchising as a form commercial activities is the most cost-effective and efficient way to run a small business. Both parties to the contract receive profitable terms for your development. Franchisor as owner own brand, acquires the opportunity to open new sales markets and attract new customers to its products.

Meanwhile, the franchisee receives a ready-made operating scheme for starting a business, as well as active support from the franchisor and assistance in solving strategically important issues.

To avoid mistakes when opening a franchise, we recommend watching the following video:

Many people dream of starting their own business, but cannot decide to take such a step. The main reason for indecision is lack of idea and fear of risk. Therefore, more and more often the attention of newcomers is attracted by the franchise business. 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. A foreign word hides the ability of any person to work under the name of the brand they like. It doesn't matter whose logo it is - Russian or foreign. The main thing is that the consumer knows him, and the owner gives him the opportunity to make money on his name. A franchise is an agreement that a brand owner offers to an entrepreneur.

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

A franchise is an agreement that a brand owner offers to an entrepreneur.

The financial side

So, you are offered a ready-made business. Take it and use it. But the brand owner is ready to share for a reason, but for a fee. These conditions may be different for each franchisor.

What you have to pay to the franchisor:

1. Lump-sum payment.

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

2. Royalty.

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

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

There is, of course, another way to open a franchise business - no investment. The principles of a no-investment franchise are that an entrepreneur claiming such a right must convince brand owners that his candidacy will improve performance, but this is a lot of work. Only in rare cases does a franchisor become an investor for a franchisee.

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

Pros and cons of the franchise

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

pros

1. Brand awareness.

The popularity of the company inspires confidence among the consumer. There is no need for promotion, PR. Having seen the familiar name, the client will come himself, and not for the sake of curiosity, but for the purchase of a product or service. Onlookers who do not belong to the required contingent will bypass the party.

2. Business support.

The franchisee will never be left unattended, necessary instructions and learning. For any reason, you can contact a specialist. At the first stage, assistance is provided even in the design of the premises, if required by the brand. In another type of business, a beginner will have to independently resolve all issues.

3. Guarantee before 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 novice entrepreneur. When choosing a franchise, the owner of the brand will support you, he will guarantee the return of credit funds to the bank. Agree that it is safer to give funds for an already promoted business than to look for a bankrupt client later.

Minuses

1. Severe conditions.

It is necessary to work under certain conditions, which are dictated by the owner. Deviation from even one point is fraught with the imposition of fines on the renter of the brand 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 ruined, then the entrepreneur who leases the right to work under this brand will have to curtail, no matter how well his business is going. The fact is that if the supplier of the product or equipment disappears, the supply of what the franchisee depends on stops. The risks are high, especially if you don't study the economic side of the prospective partner.

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

The franchisee's rights apply only in accordance with the signed agreement.

3. Limitations in the choice of suppliers.

It is possible to purchase equipment or raw materials only from certain persons, which may be disadvantageous in terms of location. Attempts to bypass this clause lead to the termination of the contract.

4. Costs.

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

Legal regulation

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

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

To exclude all risks and surprises, you need to look at a sample of the contract of the trademark with which you intend to cooperate. It can be requested from the company or viewed on the official website. Also, a standard franchise agreement can be downloaded from the sites where catalogs of companies offering franchising are compiled.

Franchise business lines

First you need to study the directions of franchising that are offered in Russia. There are a lot of varieties, because the development of franchises does not stand still. Entrepreneurs, starting a business very often, without trying it on their own, start selling franchises.

Activities:

1. Retailing.

Network retail type of activity. For the franchise, it is proposed to open a store that is known in many regions. For example, everyone knows the shops Pyaterochka, Perekrestok, Magnit, L'Etoile.

2. The sphere of public catering.

This is a very popular type of business because food is always in demand. Successful examples include Subway, McDonald's, Little Potatoes, and various companies offering coffee to go.

3. Manufacturing.

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 shops. Mini-bakeries or outlets where the production and sale of products is carried out at the same time. Example - "Russian pies", "Pokrovskie bakery". This direction is very profitable, because bread is bought every day. If there is a supply corresponding to the demand, then the type of production is selected 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 be at a loss.

5. Clothes and footwear.

Products from well-known and not so famous brands also give great opportunities to choose the direction of business development for a franchise.

6. Goods for women or men.

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

A more complete classification of types of franchising in Russia is posted on specialized sites that provide such information. In the franchise catalog, you can select various companies and get information about the rating and reviews from existing franchisees.

To purchase a franchise, you first need to register an individual entrepreneur. Franchising is only permitted commercial organizations or individual entrepreneurs. Individual he cannot engage in business without registration.

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

First, study the environment in your city. It is possible that the type of activity of interest is already on the market. Next, assess your financial capabilities, because any business requires investment. If the costs of a lump-sum payment are excluded, then you still have to spend money on premises, purchase of goods or raw materials, equipment. Think about whether you are intimidated by the responsibility to the consumer and partner. To fail a reputable product brand is to lose profit. Therefore, carefully review your responsibilities before signing the contract. Don't forget about statistics. Statistics is an important parameter that can be the main one when a businessman makes a choice in favor of a certain form of franchise.

Think about what the payback period might be. To do this, you need to talk to those entrepreneurs who are already in business in order 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 hinterland, 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 salons in the city and chose a narrow direction - kitchen furniture. I chose trade mark Maria Kitchen. I spent on renting a retail space, where the main samples of the factory should be located, and purchased samples. The owner of the brand gave a big discount on exhibition kits, but made demands that samples from the showroom were not sold for a certain period. The entrepreneur also thought that he would need funds to spend on computers with the factory's design program, but they were also provided free of charge. After staff were hired and trained by the manufacturer, the salon began work. But, despite the fact that the preparation for the opening of the salon was successful, there are no clients. And all because the entrepreneur did not take into account that the cost of the headset from the brand "Maria's Kitchen" is at least 100,000 rubles. This is practically inaccessible to the bulk of consumers in the region, where the average salary is only 20,000 rubles. It is completely different when the salon is open in a big city, where there are more people with high incomes.

Cancellation of an already signed agreement 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 contains only a form where you can write a message and wait for a return 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 entrepreneurial activity for Russia is a new concept, it is gaining momentum rapidly. The pros and cons of such a business are already obvious, there is experience that entrepreneurs share with each other in order to avoid serious mistakes.

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

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

Comprehensive right to use a trademark or brand, as well as technology, business practices, and other forms of intellectual property that one company sells to another to expand its network. The franchise price is made up 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 an opinion 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 in the contract), seeking to quickly get their profits, may deliberately 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 conduct an analysis of the market and target audience.

What are the types of franchises

There are three main groups of franchises by type of activity:

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 technological sequences, provide a list of suppliers of raw materials and equipment for equipping the production complex.
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 them, chooses where the store will be located and what area it should be.
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.

According to the form of implementation, the franchise can be of two types:

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

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

Standard- the franchisor controls all stages of the company's activities and does not allow deviations from the standards it has adopted. This format is suitable for aspiring entrepreneurs as it avoids many mistakes.
Free- the rules for the operation of the franchisee enterprise are set conditionally. Such a franchise is suitable for experienced investors, whose main goal is to quickly enter the market.
With replacement- technologies and methods of work are established by the franchisor, but you can choose suppliers yourself. This format is convenient for manufacturing enterprises in remote regions.
Ready-made 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 a high start-up investment in the business, but it is also the easiest way to start making a profit in the shortest possible time.

How to find 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, you will find the following instructions useful:

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 the brand and business model, but does not include the cost of equipment, rent and the first purchase of goods or raw materials. This means that the business is inexpensive franchise the production of goods can require much more investment than trade or services with a large lump-sum contribution, since it requires additional investment.
When choosing a specific product or service, examine the competition in your area. If it is high, even the most reliable franchise can be a waste of money.
Select several offers in your direction and compare the conditions.
Explore the history of each company and personally visit existing representative offices in your and neighboring regions. If the company is very young (it must be at least 5 years old) and does not have its own divisions, it is most likely that you have an unreliable partner in front of you.
Analyze reviews of customers buying products or services produced by selected franchises. The product or service must be real and relevant to the market.
Conduct negotiations 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. Find out the merits and demerits of the business.
Estimate the level of investment in own business... If you are offered to start a business on free franchise, in most cases this is a standard offer for the supply of goods for sale.

Step 2. Conclusion of an agreement with the franchisor

After the initial selection of proposals, before concluding an agreement, you need to study in more detail the specifics of the transaction. This requires a preliminary meeting with representatives of the franchisor company and obtain legal advice on the proposed agreement.

How to conduct preliminary negotiations

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

If you are a budding entrepreneur, if possible, invite an experienced business consultant to your 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 the franchisor to sell the rights to a brand that is not registered or the ownership right expires before the expiration of the contract with the franchisee.
Amount and schedule of payments... You must be provided with details of the flat rate and royalties in local currency. If amounts are quoted in convertible currencies, the exchange rate must be negotiated. Royalties can be a fixed amount or expressed as a percentage. Sometimes royalties are tied to the volume of the enterprise (for example, to the area of the sales floor).
Organizational expenses... In order to attract franchisees, many companies make a lump-sum contribution with a minimum or do not include it at all in the agreement. On the other hand, very often it turns out that at the same time the franchisee bears the costs of creating design projects for outlets (shops, offices), staff training, and issuing permits.
Choosing a business location... When going to a meeting with a franchisor, you can pre-select several locations where you would like to locate your business, 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 or no support during the start of a business, which can be a decisive factor for newcomers.
Control level... You need to know how strict the rules for working on the franchise of interest are, as well as determine the boundaries for making your own decisions (what you can change and what not). This applies to the procurement of equipment, raw materials, goods, as well as pricing and overall strategy.