How to open a franchise in your city. How to open a franchise business: pros and cons, step by step instructions. Common options for "free" franchises

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).

Under the rules of franchising, the franchisor (selling the right) undertakes to research the market in your locality and decide 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 you buy a franchise, you must independently study the product you are interested in and conduct a market analysis and target audience.

What are the types of franchises

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

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.
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.
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:

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.
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 a high initial investment in the business, but it is also the easiest way to start making profits in the shortest 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 and royalties paid for the right to use trademark and business model, but do not include costs for 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) operating under this franchise. Learn the strengths and weaknesses of the business.
Assess the level of investment in 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, you need to hold a preliminary meeting with representatives of the franchisor company and get legal advice under 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 be provided with details of the lump sum and royalties in local 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 to attract franchisees do lump sum minimal or not included in the contract at all. 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.

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, especially fast food businesses, remain the most popular options.
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's 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 of the target audience. If the number of potential customers is 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, a big city means 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

Sum seed investment- these are the costs 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 trainings, 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:

fakes. Fraudsters copy elements of a well-known brand and make a similar offer. A naive entrepreneur enters into a deal to open a franchise business. Not only does fake have nothing to do with famous brand, its real owner can sue the franchisee.
Examples of such franchises: ZaraZara, Eurosvyaz, etc.
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 sales. If the company and trademark were registered almost yesterday, refuse.
Not ready-made franchises . 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 allowed to sign a contract for the supply or information services, this is a reason to doubt whether the relationship between the parties is franchising.

On the basis of a commercial concession agreement (CC), the franchisor transfers intellectual property (brand, trademark, technology) to the partner under certain conditions 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 the greatest profit, the agreement will come to an end.

Having caught fire with the idea of creating his own business and having viewed hundreds of seemingly profitable franchise offers, an aspiring entrepreneur with fire in his eyes runs to his future mentor partner to buy a franchise. And it's good if the partner turns out to be a real mentor, and the franchise offer is really profitable. And if not?

After reading this article, you will learn:

How to avoid the 12 most common mistakes new franchisees make
How not to run into scammers
What you need to know when choosing a franchise
How to negotiate with a franchisor
and much more.

So you've decided to buy a franchise. How not to make a false choice?

Beware of fakes!

To begin with, it is worth familiarizing yourself with what franchises are, selling which companies are engaged in, one might say, fraud. There are three kinds.

Firstly, shell franchise. Entrepreneurial citizens create a trademark and copy all the attributes of some popular brand - from corporate colors to the terms of the franchise package. As a rule, such a trademark is not even registered. An inexperienced franchisee takes the bait and buys a useless franchise.

In addition to external similarity, such a franchise has nothing to do with a popular brand.

It has no commercial value. The main goal of creating a shell franchise is to quickly make a profit, to push the franchisee to buy a franchise, the price of which is based on false popularity and fame. Only after signing the contract, an inexperienced entrepreneur feels all the consequences of a rash purchase.

The unfortunate franchisee pays for the mistake not only with his money, having bought a dummy, but also with his reputation. The owner of the original brand, having discovered a fake, can sue, and for both the buyer and the seller of the franchise. Using a stolen idea and delivering a low-quality product, the franchisee will forever lose the trust of customers and partners.

There are enough examples of empty franchises. So, the famous pseudo-franchise « ZaraZara» at some point had more outlets in Russia than the original Zara. Or Eurosvyaz- the prototype of Euroset, too lazy to come up with even a different logo.

Naturally, the fight against such dummies and plagiarists is carried out by the owners of real brands. For example, recently the company "PrintInstvud" I ran into a similar problem when I discovered my doppelgänger. The owners of the original product learned about the pseudo-franchise from a franchisee partner and found out that the owners of this dummy, pretending to be potential franchisees, stole the contract form, image and concept of machines from PrintInstvud.

“We developed the model ourselves, appearance of their machines and, accordingly, we produce them ourselves. In order to coordinate the appearance of the machine with the franchisee, we send him a visualization - a layout of how it will look like. On the website of the pseudo-franchise, we saw fragments directly from our presentation. Now we are working to ensure that the site of scammers is closed, ”a representative of PrintInstvud shared information.

The second enemy of a potential franchisee is one-day franchise. Very beautifully painted benefits, backed up by convincing but unverified facts. A wonderful tale that is told to the franchisee so that he pays the entry fee. Literally a week after he gives the money, the buyer will never see or hear from his “franchisor” again.

Such companies and franchises are created with the aim of making money and disappearing.

So we urge you to pay attention to the date of registration of the company and the date of opening the franchise. If both dates are doubtfully recent, then whatever they say or promise, it is better to pass such proposals by the side.

And the third, but not the most terrible enemy are "raw franchises". Young company with promising business, which, in principle, is doing well, decides to open a franchise. However, she has neither experience, nor well-developed business schemes, nor the ability to provide proper support to franchisees. That is, in this kind of franchises, again there is no thing for which people actually buy franchise offers.

“Unfortunately, there are more and more such companies in recent years. Now there is a kind of “franchise fashion”, i.e. many entrepreneurs, even if they have only recently started a business and are not yet very well versed in it themselves, are quickly trying to create a franchise and start selling it. It is clear that in this case, there is no question of any quality of materials and the transfer of real experience, verified and proven technologies. This devalues the very concept of "franchise", - the representative of the company shared his opinion Maxim Seryakov.

The “raw franchise” has two possible development paths. The first is that the business will close in a couple of years, bringing both the franchisor and its franchisee only losses and a damaged reputation. In the second case, together they will find ways out of difficult situations, checking the efficiency of the business model for errors. However, in this case, a logical question arises: why give money for a franchise if you have to go through all the same stages as when opening a business on your own?

Think with your head

A very serious mistake of a novice franchisee is excessive trust in the franchisor's forecasts. In large companies, as a rule, there are franchising departments involved in sales. It is clear that their goal, no matter what, is to sell their franchise. We do not want to say that you can not trust anyone and that everyone is completely deceitful. But given the risks that the franchise buyer takes, he should be more critical of the promises of the franchisor.

It would not be superfluous for a partner to independently analyze the market in the territory of the proposed business location. If you are considering buying a franchise for small town, then it may well turn out that the product that was in great demand in the center of the capital, in your case, will be completely unclaimed. It is also worth looking for nearby competitors, perhaps there will be so many of them that there is simply no point in opening a business in this area and in this place.

Plan your budget

Franchisees need to calculate their costs at the initial stage and acquire a monetary airbag, in the amount at least 1/3 from the initial investment. When starting a business, there are always unforeseen but necessary expenses and hidden fees. Therefore, we recommend discussing the budget in detail with your franchisor, since companies usually indicate the average amount of required investments in franchise presentations.

In turn, the company "Sweetberry" tries at the first consultation to identify such misconceptions among the franchisee.

“At the very beginning of negotiations, we give a detailed budget, detailed information on the costs of opening, on doing business for the first six months after the opening and for each future season. We don’t have hidden payments, the website publishes the calculation directly for the implementation of the project launch.” - a representative of the company shared her experience Anastasia Salova.

You need to understand that in addition to the initial investment for launch, you will have monthly expenses for salaries, rent and other expenses that are not compensated by income. On average, for three to six months, you will only invest in a business, working in the red, until you reach the break-even point. Only after that you will be able to start your way to the next frontier of the business plan - the payback point**.

*Break-even point is the sales volume at which revenue covers expenses. In fact, you go "to zero". The company will only make a profit when you start selling additional units of production.

**Payback point - the moment when the amount of earned profit covers the initial investment.

Get everything in writing

With the franchisor, you can agree on anything, but All your agreements must be in writing and signed by both parties. This is a smart way of doing things. Because relations between partners are built on documents, on what is recorded in them. Use at least e-mail correspondence, for the convenience of communication and control over the obligations taken. The promises of the franchisor, not supported by anything other than an honest word, can cost you dearly, since there will be nothing to refer to.

Read what you sign

A new partner needs to study the entire package of documents in the most detailed way. As already mentioned, this is what the entire business of the franchisee will be built on. Pay attention to the very name of the contract.

In Russia, franchising as a type of business is not legally fixed and is regulated mainly by a commercial concession agreement or a license agreement.

Be attentive to the term of the contract, it must be at least three years, as well as to the territory in which the franchisee can use the rights granted. It is important to check the company's documents for the right to own intellectual property, request copies of the trademark registration certificate and independently check its number on the Rospatent website.

If you do not understand the documents at all, then it is better not to save money and hire a professional lawyer! By saving on professionals, you can go broke.

No need to brand

Buying a franchise of a popular brand does not yet give you a 100% guarantee of success. Of course, well-known companies, as a rule, take a responsible approach to opening a franchise and really help their franchisees develop successful business. However, there were situations exactly the opposite, when partners went bankrupt by buying a popular franchise.

Chat more!

You should not limit yourself to communicating with only one representative of the company, moreover, if his main task is to convince you of buying a franchise. Talk directly to your manager and also to the people you will be working with. Your task is to get as complete a picture as possible about the franchise and the business you will be involved in.

For successful work For a franchise, at a minimum, you need to learn as much as possible about the company itself.

“Determine the scope of the company’s business, find out what way the franchisor offers to sell its products, pay attention to the type of goods and services, the advantages of the franchise, whether the company is a manufacturer, what is the quality of the products and the geography of distribution of franchised enterprises,” the representative of the company shares his opinion "NANOPROTECH" Sergei Selyakov.

Be sure to find contacts of other franchisees of this company, including former ones. We recommend that you come and see how the current business works under the chosen franchise, communicate with the franchisee, hear first-hand feedback about the company that will become your franchisor.

If you're looking to acquire a non-exclusive franchise in your region, it's worth finding out about the location of your closest fellow competitors and agreeing on a sphere of influence.

If the franchisor hides the location and contacts of his franchisees or any other information from a potential partner, it is clearly not worth doing business with him.

Ask the Right Questions

Talk to your franchisor and find out not just how many franchises the company opened, but how many closed and why. It would also be nice to know how many enterprises are reopening, that is, are franchisees limited to opening only one point? This information will be very valuable to you. Again, if the franchisor does not want to provide you with complete information, you do not need to start a business with him. You don't want to buy a pig in a poke, do you?

“Transparency and purity of relations are a priority for our company, therefore, during negotiations, we do not try to hide information about isolated cases of closed franchise stores. On the contrary, we talk about what caused the failures, what mistakes the franchisees made. We are convinced that the key to the successful development of the franchising system is, first of all, open and honest relations,” the company explained its position.

Don't Avoid Learning

Franchisees should adequately assess their strengths and knowledge. The decision to run a franchise business comes different people, with different experiences. Someone has no business practice at all, someone has experience in leadership positions, and someone already has own enterprises opened from scratch.

Whatever colossal business experience you have behind you, training from the franchisor is necessary!

He will explain how to start a franchise business from scratch in a field that is completely new to you. After all, every industry and every company has its own characteristics, which you may not even be aware of.

Learning is an important element when buying a franchise! An experienced franchisor should transfer knowledge, proven methods of work and schemes for building a business to you. Learning and developing, constantly improving, is necessary for every entrepreneur who intends to build profitable business for many years. Otherwise it is impossible to achieve success.

“When we offer franchisees to listen to our recommendations, we do not question their life and professional experience. We pay attention to the difficulties, possible difficulties, specific aspects of our business model, trying in this way to make it easier for partners to make their own way in business,” notes the co-owner and founder of the TM franchise "Orange Elephant" Zhanna Asatryan.- “As a rule, very creative franchisees start experimenting from the first month, believing that after working for 2-3 months, they understand better than the franchisor what, when and in what ratio they need to sell. Such experiences always end badly. A franchisee rarely survives a year and closes with a pile of debt to suppliers. We part with such would-be franchisees, usually mutually dissatisfied with each other.

Don't expect everything to be done for you.

In the world of franchising, there is one big myth that when acquiring a franchise, a person does not need to try and invest in work. However, a franchise business is the same business in which you need to work and think all the time - first of all, the franchisee himself. Yes, the franchisor provides already proven developments and helps the new partner avoid many mistakes, but the direct owner manages his business first of all.

Together with the franchisor, the partner should strive to optimize the business, eliminate errors and develop. Of course, to begin with, it is important to set up the work of your enterprise and learn a lot of new information. However, one cannot stop there and, together with one's mentor, it is necessary to move forward, look for new opportunities and eliminate inefficient mechanisms.

“The Personal Solution company, even at the stage of selling a franchise, tries to convey to people that our business (like everyone else) requires a lot of time and effort. We try to immediately prepare people for the fact that they will have to work hard, they will have to study and master a huge amount of information, they will have to work on themselves and rebuild their way of thinking, ”says a representative of the Personal Solution company Maxim Seryakov.“When communicating with partners, we also try to develop their independence, entrepreneurial approach and teach them to think with their own heads before taking action. Because the success of any business primarily depends on the entrepreneur himself, and even the most detailed description of work technologies cannot cover all possible situations that the franchisee may encounter.

Choose the best for your team

Company employees are the face of your business. And a very gross mistake of the franchisee is the lack of due attention to their selection and training. “Many entrepreneurs may underestimate the importance of staff. Nevertheless, competent qualified personnel is at least 60% of the company's revenue and success,” comments the head of the franchising department of the optics salon network "Happy Look" Olesya Ivanova.

The quality of work of your employees directly affects the reputation and profitability of the company. Not without reason, most franchisors have a separate system for selecting and training their staff.

“In the Happy Look company, all franchisee personnel undergo a mandatory two-week training at the company's main office. Such training has several stages and is completely free,” says Olesya Ivanova.

However, staff travel can be very expensive and inconvenient due to the fact that people are interrupted from their work. However, franchisors have found a solution to this problem. Yes, the company "Express office" conducts the entire course of study online. For this in in electronic format presents interactive diagrams and teaching aids, there is a corporate chat uniting company employees from the head office and official representative offices in the regions.

"We have a functioning The educational center which helps the staff to become highly qualified professionals. Thanks to him, everyone new employee practically from the first days, he is well versed in his work and further improves his knowledge and skills, ”said the representative of trading network office furniture Dmitry Sokolov.

Customers interact directly with your employees and judge your business by the quality of their work. Not without reason, managers are strongly advised to visit the so-called mystery shopper at their own enterprise. You will be able, based on personal feelings, to understand what opinion visitors and partners have about you.

Don't Treat the Franchise as a Hobby

A franchise business is not something you can only do in your spare time. It is work and constant work. Therefore, you should not think that this is a kind of passive income, and you can transfer all the worries into the hands of managers. As soon as you step back from business, the business will disappear. So if you are not ready to devote all your time to the development of your business, you should not buy a franchise.

In order for you to always make the right choice when buying a franchise offer, the BIBOSS business portal publishes annually, which has absorbed itself best offers for business in Russia.

Both experienced entrepreneurs and newcomers 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 METRO Fasol.

How to open a franchise store

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

Before choosing a partner, you need to evaluate the strength. The franchisor will require the fulfillment of a number of conditions enshrined in the contract. Failure to do so will result in sanctions.

Experienced entrepreneurs choose according to the marketing package, 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-discovery

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 the first project, and, for example, in order not to depend on one direction, they choose another, little known one.

The lump sum pays for the time that the entrepreneur would have spent identifying the nuances. However, experienced businessmen do not perceive requirements and rigid frameworks well.

Franchises protect inexperienced entrepreneurs from mistakes and teach the basics of managing companies. The mentor guides and supports the junior partner, not allowing them to make big mistakes. At the same time, the business is constrained by the ideas and intentions of the franchise owner.

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

Rice. 2. Sample layout in the store "Krasny Pischevik"

Advantages and disadvantages

Advantages:

The franchise buyer receives guaranteed assistance from his franchisee. Consultations are valuable because the franchiser is constantly calibrating the terms of his product and business format. Learn from your own and partner's mistakes. Implements changes. Leads a novice entrepreneur to the first result.
No need to come up with new ideas and development strategies. All you need is basic knowledge in the field 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 a surety. Otherwise, it is impossible to get money from the bank for a startup.
The franchisee receives a detailed business plan. Calculated profitability and initial costs. Understand the payback period and return on investment.
Large franchises limit the number of partners per locality. This partially removes dependence on competitors.
Advertising support. Franchise Founder own funds holds advertising campaigns and brand promotion. This gives recognition to the network of its stores in every city.
Ready bases of suppliers, goods, contractors.

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

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

Opening stages. Step by step plan.

Overview of three retail franchises

Reference. Reverse franchising - view entrepreneurial activity, in which the one who bought the franchise receives periodic payments. The buyer is an investor. The franchise seller opens a subsidiary at the expense of the buyer.

Outcome. 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 gatherings and conferences, introduce innovations, share document templates and best practices in business processes.

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

What is franchising

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

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

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

Financial side

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

What do you have to pay the franchisor:

1. Lump sum.

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

2. Royalty.

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

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

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

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

Pros and cons of a franchise

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

pros

1. Brand awareness.

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

2. Business support.

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

3. Guarantee to the bank.

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

Minuses

1. Harsh conditions.

It is necessary to work under certain conditions that the owner dictates. Deviation from even one point is fraught with fines for the tenant of the brand or termination of the franchise.

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

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

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

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

3. Restrictions in the choice of suppliers.

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

4. Expenses.

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

Legal regulation

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

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

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

Franchise Business Lines

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

Activities:

1. Retailing.

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

2. Sphere of public catering.

This is a very popular type of business because food is always in demand. Successful examples include Subway, McDonald's, Kroshka Potato, and various takeaway coffee companies.

3. Production.

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

4. Goods for children.

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

5. Clothing and footwear.

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

6. Products for women or men.

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

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

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

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

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

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

Let's take an example. The entrepreneur decided to expand his activities. I saw that there were few luxury furniture stores in the city and chose a narrow direction - kitchen furniture. As a partner, I chose the trademark "Kitchen Maria". I spent money 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 salon 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 the staff was hired, who were trained by the manufacturer, the salon began work. But, despite the fact that the preparations for the opening of the salon were successful, there are no customers. And all because the entrepreneur did not take into account that the cost of a headset from the brand "Maria's Kitchen" is at least 100,000 rubles. This is practically inaccessible to the bulk of consumers in the region, where the average salary is only 20,000 rubles. It is a completely different matter when the salon is open in a big city, where there are more people with high incomes.

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

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

Summarize

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

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

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