Opening a franchise business: new instructions, tips, reviews. Franchise: how to open, features, pros and cons Opening a franchise business

Franchising differs from other ways of doing business in that 90 out of 100 franchised businesses not only survive for more than one year, but also operate at a profit. By comparison, only 15 out of 100 innovation-related startups make it to the end of their first year. Although 7 of them subsequently achieve crazy profits, the probability of ruin is 85%. Opening a franchise business means acting reliably - the enterprise will bring not fantastic, but good profits, and guarantee financial stability.

Where to look for franchise offers

In which area to open your own business?

One of the trends in the franchising market in recent years is an increase in offers Russian companies.
Franchises of cafes and restaurants, especially fast food establishments, remain the most popular options.
The second place is occupied by franchises of goods and services for children. The number of offers in the sports, beauty and health categories increased by a third.
Proven option - open medical laboratory, where you can quickly get tested.
A little less attention to options in the field retail food and household goods.

Important to know! Clothing, footwear and jewelry franchises have lost ground over the past year - the growth of enterprises in these segments decreased by 45%.

Assessing supply and demand in the selected niche

Before you open a business, it is important to decide where your enterprise 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 your 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 in danger.

Risky venture - opening in small town a business that requires highly qualified specialists. As a rule, they quickly leave for big cities. In a small town, you need to carefully monitor your reputation because information spreads quickly.

Business ideas for providing services to the public

On the other side, big city- this is an 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.

What business is better to open in a small town:

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

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

The amount of starting investment is the cost of rent, design project, renovation of premises, purchase of equipment and/or products, personnel training, marketing. When purchasing a franchise, these costs will be halved. The franchising program, as a rule, includes: a design project for the premises, employee training, a brand book with layouts of advertising 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 under the franchise. It amounts to up to 10% of the cost of starting a business. There are programs without a lump sum payment, when the starting payment, as a rule, is included in the mandatory purchase of a minimum batch of goods or equipment.

Franchising also includes operational support for the partner from the program owner - expenses for brand advertising, research, regular consultations, and assessment of the enterprise’s effectiveness. For support, the franchisee pays a royalty - a payment every month in the form of a certain amount or percentage of turnover/profit. As with a lump sum fee, royalties can be in the form of monthly product purchases or advertising royalties.

• inexpensive sweet fast food (waffles), take-out coffee shop;
• legal advice;
• advertising services;
• business to business, for example, certification services;
• travel agency;
• sale of plastic cards.

Proposal analysis and negotiations

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

Franchises you shouldn't mess with:

1. Fakes. Fraudsters copy elements of famous trademark and make a similar proposal. A naive entrepreneur enters into a deal with the intention of opening a franchise business. Not only does a fake have nothing to do with famous brand, its real owner can sue the franchisee.
   Examples of such franchises: ZaraZara, Eurosvyaz, etc.
2. Ephemera. An offer, very tempting on paper, is created with one purpose - to sell it and disappear into the distance. To avoid falling for the trick, look at the creation date of the franchisor company and the start date of franchise sales. If the company and trademark were registered almost yesterday, refuse.
3. Not ready franchises. This is an offer from a young company that does business honestly, but does not yet have experience, proven business processes and normal support. The company itself may soon go out of business, and with it the franchising program.

Important tip! Do not use the franchisee business plan that the brand owner created.

In the USA, by the way, it is prohibited by law to guarantee specific income to a franchise partner.
It is useful for a future franchisee to research the market and make calculations himself. Often the goal of a company's franchising division is to sell more offerings, and profitability figures may be overly optimistic. Do not take the franchisor's promises for granted - check the information.

What kind of business can you open from scratch in a village?

A future partner should communicate not only with company employees, but with other franchisees. It would be a good idea to come to the site and see how the enterprise operates. Reviews from franchisees - current and former - will help you make the right decision. If the owner hides the contacts and location of his franchisees, opening a partnership business with him is a bad idea.

Signing an agreement with the brand owner

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

Based on 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 CC agreement, in turn, secures the franchisee’s right to receive benefits from cooperation, while the supply agreement does not guarantee the privilege 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 and payment terms. A deferred payment may be granted for the payment of the lump sum contribution. Check the validity period of the contract. For example, Subway enters into a QC agreement 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.

Comprehensive right to use a trademark or brand, as well as technologies, business methods and other forms intellectual property, which one company sells to another in order to expand the network. The franchise price consists of a lump sum (basic payment) and royalties (monthly payments).

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 payment in the contract), trying to quickly get their profits, may deliberately 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 an analysis of the market and target audience.

What are the types of franchises?

Based on the type of activity, there are three main groups of franchises:

1. Production- production of products according to company standards and under its brand. With this form of cooperation, the franchisor must provide you with all technological sequences and 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 the goods and at what cost to sell them, chooses where the store will be located and what size it should be.
3. Services- provision of services under the company brand. 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, a franchise 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 region using a similar model.

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

• 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 beginning entrepreneurs because it allows you to avoid many mistakes.
• Free- the operating rules of the franchisee's enterprise are established conditionally. This franchise is suitable for experienced investors whose main goal is to quickly enter the market.
• With replacement- technologies and work methods 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 initial investment in the business, but it is also the simplest method that begins to generate profits in the shortest possible time.

How to choose the right franchise

Once you have decided on the direction and type of goods or services, you should begin searching 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 direction, pay attention to the cost of the franchise. The latter includes a lump sum fee and royalties, which are paid for the right to use the trademark and business model, but do not imply the costs of equipment, rent and the first purchase of goods or raw materials. This means that an inexpensive franchise business for the production of goods may require much more investment than trade or services with a large lump sum, since it requires additional investments.
• When choosing a specific product or service, research the competition in your area. If it is high, even the most reliable franchise may not be a profitable investment.
• Select several offers in your area and compare the conditions.
• Study 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, most likely you have an unreliable partner.
• Analyze reviews of customers who buy goods or services produced by selected franchises. The product or service must be real and in demand on the market.
• Negotiate with entrepreneurs from neighboring regions (to avoid conflicts of interest, it is better not to contact representatives in your region) operating under this franchise. Find out the advantages and disadvantages 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 to supply 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 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 receive legal advice under 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, most likely you are dealing with a fictitious or unprofitable franchise. An exception may be when the meeting is scheduled at a cafe whose franchise you are purchasing.

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

• Availability and timing of copyright registration for a trademark. There are often cases when the franchisor sells the rights to a brand that is not registered or the ownership rights expire before the end of the contract with the franchisee.
• Amount and payment schedule. You must be provided with details of the lump sum and royalties in local currency. If amounts are given in convertible currencies, the exchange rate must be specified. 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. To attract franchisees, many companies make a minimal lump sum contribution or do not include it at all in the contract. On the other hand, it very often turns out that in this case the franchisees are charged with the costs of creating design projects for outlets (stores, offices), training staff, and obtaining permits.
• Choosing a business location. When going to a meeting with the 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 if the deal is concluded.
• Support level. Ideally, the franchisor should provide you with comprehensive assistance and advice until the business reaches the desired level. But many companies provide virtually no support during the formation of a business, which can be a decisive factor for beginners.
• Level of control. You need to know how much strict rules work on the franchise of interest, as well as determine the boundaries of acceptance own decisions(what you can change and what you can’t). This applies to the procurement of equipment, raw materials, goods, as well as pricing and overall strategy.

Opening a franchise business is considered more profitable and safer than starting your own business on your own without outside help and support. This method of implementation entrepreneurial activity Best suited for those without relevant experience. It is worth understanding that the business will not belong to you in full - an enterprise opened under someone else’s brand will bring a stable profit (provided proper organization), but as soon as the contract is terminated or the franchise agreement expires, you will be left without customers and without goods. But with the experience gained in doing business. All can be found in our article.

How to open a franchise business: simple steps

1. Choosing a sphere

The first step is to focus on a specific area of ​​activity. Most franchises today are concentrated in the middle of trade, catering, less in the sphere of production and services. Each has its own strengths and weaknesses. Yes, trade finished products, purchased from the franchisor, allows you to get a quick and stable profit. Franchise production - save money, since raw materials are cheaper finished goods. The service sector does not require equipment of retail outlets and maintenance storage facilities. And public catering is one of the least expensive and most highly profitable.

There are also disadvantages - in public catering you can “burn out” if the food turns out to be tasteless, the competition is too great, the influx of clients is too small. Point of sale will become unprofitable if you do not manage to sell the goods purchased from the franchisor on time (and purchases must be regular, regardless of whether you managed to sell the previous batch or not). Production is the most complex process that requires the search for specialized specialists, high startup costs, and constant monitoring of the process. And in the service sector, royalties can reach astronomical figures.

Many people want to open their own business, but cannot decide to take this important step. The reason for such indecisiveness is the lack of an idea or the fear of failure. Therefore, as a result, beginners settle on 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 of 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 activities on behalf of the franchisor, using ready-made schemes for providing services or selling goods under the name of a well-known brand.

The franchisor is usually famous company or a corporation that has managed to establish itself on the positive side in the market. In addition, it must have a positive image and good reputation among consumers. Successful European, American and Chinese organizations are actively promoting franchises, thereby expanding geographical boundaries and opening new offices for sales own goods and services. How to open a franchise?

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

1. A working and effective business project.
2. Possibility of using the results of intellectual property.
3. Corporate identity and maintenance plan.
4. Training of employees and improvement of their qualifications.
5. Constant interaction, support and advice.
6. Marketing promotion.

All of the listed tools make it possible 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; all that was left was to take it and start using it. But the owner of the company shares the trademark for a reason, but under certain conditions. They are different for each franchisor; the following schemes are most often used:

1. Payment of a lump sum contribution. This is the initial payment required to enter into the agreement. It's kind of membership fee or brand rent. The size of such contributions can be so large that a novice businessman simply cannot afford them.
2. Royalty. Paid every month in favor of the owner. The amount depends on the percentage of the franchisee’s income specified in the agreement. In other words, the entrepreneur must monthly transfer a kind of profit tax to the owner of the trademark.

But not everyone includes these concepts. Conditions vary on a case-by-case basis. Some organizations charge only a lump sum fee, while others, on the contrary, do not have one, but the franchisee is required to pay a monthly royalty. There are cases where the brand owner demands payment of the down payment 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 investment? Yes, there is such a way. Its principle is that an entrepreneur claiming this right must convince the trademark owner of his ability to bring the business to new level. This is a very difficult task. In rare situations, the franchisor is willing to become an investor in the entrepreneur.

Franchise benefits

A franchise, like any other commercial area, has its pros and cons, which an entrepreneur should know about in advance. Opening a franchise from scratch is a difficult task that involves managing the relationship between the brand owner and the businessman.

The benefits of starting your own franchise business include the following:

1. An entrepreneur buys a ready-made business that has already proven itself in the market. It includes assistance in organization, consulting, supply of raw materials and other components. The acquired brand is already popular in the market, so the businessman will not have to spend money on its promotion.
2. For this line of business, it is considered the norm for the franchise owner to provide consultations, support in establishing relationships with suppliers, service companies, advertisers, and so on. The franchisee does not need to reinvent the wheel; this has been done for him before.
3. A loan to open a travel agency franchise, for example, is much easier to obtain. When applying for a loan, the brand owner 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. No requirements for running a franchise business specific knowledge. It is enough for the buyer of a trademark to have some knowledge in the chosen field and basic management. But you won’t be able to do without spending at all; you will need funds 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 profits. But if you decide to open a coffee shop as a franchise, for example, everything will be much simpler. The entrepreneur is provided with a large amount of data, the use of which will certainly lead him to an accurate forecast of the future situation.
6. No need for market research. All necessary information is collected and provided by the owner of the trademark. This is a huge time saving and a guarantee of getting results within the first month of work.

Disadvantages of a franchise

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

1. In order to open a franchise store, you need big investment. Purchase ready-made business and its launch requires significant financial expenditure. As a rule, beginning businessmen do not have a large amount of money or they are afraid to spend it, and accordingly, 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 brand owner. But the percentage of his share is very small, so the entrepreneur will remain in the black.
4. Vague prospects. The liquidation of a franchise network leads to the mandatory closure of the business. The franchisee has the right to carry out activities only as long as the agreement is in force.

How to open a franchise, where to start?

First of all, you need to decide on the direction of activity. Experts advise choosing something that arouses interest and what a person understands. Especially if this is the first time. If, for example, a future businessman knows nothing about computer technology, then he 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 studying at an economics university, study the offers of credit institutions.

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

Purchase method

There are several ways to purchase a franchise:

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

The most obvious option is to buy a business with your own funds. But not everyone has this opportunity. Therefore, most entrepreneurs begin to build 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 financing from the company selling the franchise. This can only be done if the franchisee already works in the desired organization, and it practices a similar form of relationship with employees. An enterprising employee can be appointed to the position of head of a branch, and after some time become its owner.

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

Choosing a profitable business

There are special organizations providing a list open franchises in Russia, but you can contact the owner of the chosen brand yourself. There is a wide choice of such companies, 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, then we can conclude that the brand has a future.
2. Duration of existence. It is better to choose an organization that has been operating in the market for some time and has managed to recoup its investments. Otherwise, there is a high risk of running into those who are not doing well, and they sell franchises to cover their own expenses.
3. Entrepreneur support. You should find out in detail what kind of assistance the brand owner is ready to provide to the buyer. All support measures must be recorded on paper; you should not take their word for it.
4. Business plan. Serious institutions provide ready business plan and materials on assessing the effectiveness of the selected project. One-day companies only assure that it is profitable to open this franchise, without indicating any specific figures or giving guarantees.

It is worth understanding that even the most successful franchise cannot guarantee one hundred percent success and high income- a businessman himself must put in a lot of effort and effort. It is necessary to carefully study the market with which you intend to work - whether the audience is interested in the selected services or goods, whether there are analogues, what the prices are and what 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 franchise has been made, you will need to overcome a few more important stages:

1. Updating a commercial project. As noted above, brand owners, focused on long-term cooperation and obtaining 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 location of the point. The requirements for opening in Samara will certainly be different.
2. Rental and renovation of premises. Before choosing and renovating a premises, as well as hiring employees, it is worth finding out about the requirements of the brand owner. Many companies set strict limits in this regard - the area and location of the premises, design, team composition, etc. Some franchisors help resolve all related issues and provide a ready-made design project. The most comprehensive organizations independently train employees, send merchandisers and organize the grand opening of the office.
3. Planned interaction with the seller. After purchasing and opening a 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, and develops promotions to stimulate sales ( special offers and sales). Retail stores receive purchasing recommendations from buyers specific goods. The parties regularly interact on the purchase and delivery of goods.

The return on investment for a franchise depends on many factors, but on average these periods are much shorter than when starting your own business, built from scratch. And the benefits are more stable, since the entrepreneur is insured against many difficulties that will arise when conducting business independently.

Franchise cost

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

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

Is it worth building a franchise business?

Is it profitable to open a franchise? Yes, if you approach the matter correctly. 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 tell a novice businessman which direction to choose.

Franchising, as a form of entrepreneurial activity, is the most promising and in an efficient way running a small business. Both parties involved in the transaction receive favorable conditions for your 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 buyer of a franchise receives a proven and working business plan, as well as active support from the franchisor and assistance in resolving important issues.