Franchisors and Franchisees – Symbiotic Growth
July 16, 2019
Health Care Franchise Concept - A Medical Surgeon And Nurse Discussing About A Patient.
Is Franchising In Health Care Valuable?
May 19, 2020

A Step-by-Step Guide to Franchising a Business

Image With Regard To The GST For Franchising Industry

Image With Regard To The GST For Franchising Industry


Many in India have entrepreneur dreams but are often stuck not knowing where to start from. A Franchise business can help achieve your goal of entrepreneurship. It is essential to understand the different points to consider before setting up a franchise.

Franchise Businesses – How Does It Work

A franchise is about running a business using another company’s successful business model. It is done by taking due ownership/right to market and sell the company’s product or service in a particular region. The parent company, the Franchisor, leases out products, their trading methods and strategies to the receiver, the Franchisee.


Franchise Set up
Setting up a franchise, though easy and straightforward, involves a series of steps. You need to find the right franchisor, get into a legal agreement, register your franchise business, get a GSTregistration, Click here etc.


Let us now take you through the steps involved in setting up a franchise.


1.The first and foremost step would be to choose the right franchisor. Below are a few points to consider.


  • Choose a business area that you want to start with
  • Research on successful franchises in this area
  • Identify franchises that have clean and executable agreements and deals
  • Ensure the franchisor has a franchising option available in your region

The Image Projects The Tax Calculation To Be Done For A Business


2.Once you have chosen the franchisor, the next step is to get into an agreement. Several acts and statutes govern a franchise agreement in India. There are also industry-specific laws and state legislation that may apply. The franchisor will provide you with a franchisor disclosure document. Research and review the disclosure and make a decision about the franchise.
3.If you are an existing business owner, you can start franchising from your existing firm and no further formalities may be required. But if you are starting a new business, you will be required to register the business, based on the type of ownership – sole proprietorship, limited liability probability (LLP), limited liability company (LLC), private limited company, etc.
4.Decide on the type of business structure you want to take up and prepare the supporting document for the same
5.The franchise agreement will include clauses for payment. Review these and set up payments for the initial fee, management fees, trademark royalty, payment towards any employee training or other operational costs.
6.Get the required licences, GST registration, done for the business franchise, obtain an ID number, create a current bank account and get started.

Benefits of Franchising

Rather than starting an independent business, franchising has a host of benefits to offer for the franchisee


The franchisee has a higher chance of a successful business, with an established brand, trained employees, lower branding and marketing expenditure etc. Access to capital also becomes easier. Franchisees have their franchisor to look forward to for referral in their network banks.


It is quite easy to start a franchise business within India. Realising your dreams of running a business involves just these three steps; understand the laws and legislations, get into a foolproof agreement with a suitable franchisor, and get the franchise registered.

Leave a Reply

Your email address will not be published. Required fields are marked *

CommentLuv badge