According to analysts' calculations, there are over 2,000 franchise enterprises in Russia. And this figure is constantly growing. Working on a ready-made business model has good prospects, especially for a budding entrepreneur. In this article, we will tell you in detail what a franchise business is, how to open it correctly from scratch and avoid the most common mistakes.

What does franchise mean in business

To begin with, you need to decide what a franchise business is. This is a type of commercial cooperation that allows a merchant to work under the name of a ready-made brand (foreign or domestic).

Entrepreneurs who decide to take on a franchise get a powerful start for development. By leasing a third-party business model, they acquire an experienced and well-known partner. At the same time, the brand owner provides consulting and marketing assistance, as he is interested in making a profit and developing the company's image.

Natalia Yaroshevskaya, financial coach:

Working on a franchise is one of the most reliable options for starting your own business. Statistics show that in Russia cooperation under this scheme is more reliable than an independent business. More than 80% of "clones" are successfully operating and expanding, while an independent business is often closed within 1.5 years after the start.

Franchise terms

There is no separate concept of franchising in Russian legislation. Such activity belongs to a commercial concession and is regulated by Chapter 54 of the Civil Code of the Russian Federation. Each company has its own agreement, which specifies the terms of cooperation, conditions, rights and responsibilities of the parties, and other issues.

Now about the financial conditions. A franchise project involves three cost items:

• entrance (lump-sum) fee for a license and the right to operate under the brand name;
• investments in starting a business (costs for goods, rental of premises, equipment, personnel training);
• monthly royalties for using the franchise.

Some companies selling franchises do not charge royalties or flat fees. Or vice versa, other costs are added to the standard set - for example, for technical support.

It is better to think about accounting services in advance and decide whether you need to hire an accountant or outsource this function. If you choose the latter option, it is better to use the services of a reliable company with a good reputation, for example.

Which is better, a franchise or your own business?

Before starting a franchise business, you need to analyze its pros and cons. Let's compare this form of cooperation with an independent business.

How to open a franchise business: step by step instructions

The sequence of actions when starting a franchise business will be as follows:

1. Search for franchising projects in the niche of interest, comparison of various offers.
2. Preliminary negotiations with the franchisor, discussion of the business plan.
3. Some reputable companies require the candidate to develop and submit a business plan himself to make sure it is literate and serious. Most of the time, however, brand owners help their partners develop a business strategy.
4. Execution of documents for the purchase of a franchise (signing a commercial concession agreement).
5. Solving organizational issues for starting a business: search and rent of premises, recruitment, launching an enterprise, advertising.

Common mistakes when choosing a franchise

Before opening a franchise, you need to analyze the most common mistakes that a businessman may face:

1. Purchase from a little-known firm. It is important that the company has a successful track record and is more or less recognizable. We advise you to work with brands that have been on the market for a long time. Be sure to consult directly with franchisees (franchise buyers) who are already working with the brand you are interested in. If they show good growth and open new points, this is a strong argument in favor of the company.
2. Inattentive examination of the financial and legal terms of the franchise. Entrepreneurs often choose the option with the lowest price and read the contract superficially. And there may be unreasonably high royalties, advertising or marketing fees.
3. Lack of support from the franchisor - the inability to get advice from his lawyer, marketer, accountant. Any business will have its own difficulties, and it is important that a partner helps to overcome them.
4. Ignoring the calculation of business profitability. Franchise owners provide averaged data on expenses and income, without taking into account the specifics of the region, the permeability of the outlet, etc. Your task is to analyze the financial model, taking into account all the nuances. To do this, you need to find out how much the cost of renting premises will cost, what are the average salaries in the market, demand and competition in the market, turnover and your margin.

Read about the main mistakes that destroy a business.

Important! To be safe from fraudsters, ask the company for a copy of the franchisor's trademark registration certificate. You can check the authenticity of the document and the copyright holder on the Rospatent website. The search service by certificate number is free.

Alexey Biryukov, business analyst:

It will not be superfluous to contact a financial expert and a lawyer. The financier will assess the economic situation in the region where it is planned to open the franchise, analyze competitors, and help choose a profitable direction. A lawyer will protect you from unpleasant surprises and controversial situations. The money spent on expert services will help you win in the future.

How do I get a franchise? Paperwork

The main document that regulates the relationship between the parties in franchising is a commercial concession agreement. It must be registered with Rospatent. As a rule, this is done by the owner of the trademark, although there is no clear regulation on this issue.

To submit a franchise agreement to Rospatent, you must provide a certificate of registration of a trademark and a document confirming the payment of the state duty. A sample application for state registration of the granting of the right to use under a commercial concession can be downloaded here.

Attention! Any changes, additions and termination of the franchise agreement must be registered with Rospatent (Article 1036, Article 1037 of the Civil Code of the Russian Federation).

• the size of the lump-sum contribution;
• installment or prepayment options, if any;
• the presence and amount of royalties, as well as the frequency and method of transfer;
• the nature and scope of the franchisor's assistance (consultation, staff training, legal assistance or other support;
• territory covered by the agreement;
• availability and conditions of mandatory supplies of raw materials / goods / equipment from the franchisor;
• the term of the franchise agreement, the algorithm for its termination and prolongation.

An individual entrepreneur, having concluded an agreement, can choose a general or simplified taxation system.

After the decision to open a franchise from scratch and the signing of an agreement, it will be necessary to conclude other types of agreements with a partner. They depend on the specific business. These can be permits for your type of activity, transfer of licenses, manuals and instructions, a set of company standards, an office / outlet design project, and so on. You can find out more information at the stage of finding a partner and studying the terms of franchising.

Three months of accounting, personnel records and legal support for FREE. Hurry up, the offer is limited.

How to open a franchise: advantages and disadvantages + choice of registration form + 8 steps to open a company in this way.

Franchising is one of the most profitable and promising ways to make money, because it allows you to use a ready-made brand.

Why is this considered an advantage?

The brand, which has existed for several years, has passed the test of time, is in demand among buyers, and all organizational issues and advertising moves to promote the product have already been established.

It is because of this that aspiring entrepreneurs often wonder how to open a franchise store.


This article will help you find the answer to the question, how to start a franchise business, and what you should pay special attention to.

But first, let's find out the strengths and weaknesses of such an entrepreneurial activity.

How to open a franchise: the pros and cons of this type of activity

Franchise advantages

This type of earnings has huge advantages that attract novice businessmen:

Opening a franchise store means getting guaranteed assistance and support from the franchisor.

His advice is based not only on his own knowledge and skills, but also on the experience of other people who have already experienced a franchise business.

For aspiring entrepreneurs, such development assistance is essential.

To open a franchise business, no need to come up with a new direction or create a strategy from scratch to bring an idea to life.

It is enough to have the initial capital and some knowledge in this area of \u200b\u200bbusiness.

Another plus is that a businessman, before opening a franchise store, know in advance about the fame and popularity of a particular brand On the market.

An entrepreneur has the opportunity to assess and analyze the popularity of a product, a niche in the market, without wasting his own resources.

Thanks to this, you can significantly reduce the cost of a marketing strategy.

An important fact is obtaining a loan for a large amount.

In this case, the franchisee is the guarantor of the person who takes the loan.

In the usual case, it is almost impossible to receive a large amount from the bank without a surety or collateral.

Before starting a business, all entrepreneurs calculate a business plan, in which are often only roughly calculated:

• the size of investments to start a business;
• approximate profit;
• business profitability;
• payback period.

But thanks to the franchisor, an aspiring entrepreneur receives reliable and proven information by .

This minimizes the risk that the business will develop in the wrong direction or incur unexpected expenses.

Disadvantages of the idea of \u200b\u200bhow to start a franchise business

Having considered the advantages, we turn to the disadvantages that can lead to the destruction of the case at the start, if you do not know about their existence:

• growing vegetables and fruits;
• cultivation and subsequent sale of flowers for specialized stores;
• a bakery where not only products are manufactured, but also sold on the territory of the enterprise with the help of an additionally installed store or cafe.

A good example of the latter is the Pokrovskie Bakery retail chain.

Why is this particular franchise business successful? Few people do not know that bread is an essential commodity that is bought almost every day.

If there is a demand for production, then, accordingly, there will be a profit. This means that the direction is chosen correctly!

d) Children's products.

Mixes, toys, pacifiers, and clothes, hygiene products for babies - all this will be surely purchased by mothers for their crumbs.

But before you open a franchise in this direction, evaluate the popularity of this niche in your own city so as not to start an initially unprofitable business.

e) Clothes, shoes.

These products, produced under the umbrella of recognizable brands, can also become a franchise business.

However, before the start, it is also necessary to assess the financial capabilities of the city's population. Nobody will buy VIP shoes or clothes if the family's total monthly income is 60,000 rubles.

You can open a franchise store and sell accessories, jewelry, auto parts.

The prospects of each of the directions are easily determined in their own city by analysis.

Step 2. Prepare documents

The state provides for two forms of registration - an individual entrepreneur and an LLC. Let's take a look at the advantages and disadvantages of these types before opening a franchise:

Step 3. Determining the room

To open a store under their franchise, you must meet a number of established requirements:

• favorable location that contributes to successful business;
• a large area of \u200b\u200bthe store in which trade will be conducted;
• compliance of the interior decoration with the “spirit” of the business;
• availability of space to be used as a warehouse.

Of course, finding an area that meets all the requirements of a franchisor is not easy. But if you all coped with this, then you can apply to the franchisor and hopes that he will allow you to open a store under your brand.

Step 4. How to open a franchise store: conditions

If a positive response was received, the entrepreneur is told a number of requirements that he must fulfill.

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

• payment of a monthly percentage of sales;
• an initial contribution from the entrepreneur to the brand.

This method enables the franchise founder to weed out insolvent entrepreneurs. Also, by doing so, he can prevent unnecessary costs that are associated with the connection of a person to the business network.

Step 5. Preparing the store for opening

After obtaining a franchise, it is necessary to make repairs in the premises according to the indicated requirements and purchase the necessary equipment.

The franchisor can help with these processes: find contractors who will carry out the repairs, and indicate where the equipment can be purchased at a reduced price.

Step 6. Recruiting staff for the store

Basically, the copyright holder himself recruits staff and trains employees according to his own developed program, while all the costs of this process are covered.

The most striking example is the McDonald's chain. All of its employees must comply with a unified brand code. And the franchisors are very careful about this.

Step 7. Delivery of goods

An additional advantage of opening a franchise store is that all delivery issues are assigned to the franchisor.

A novice entrepreneur will only need to pay for the delivered products at the company's established price.

We bring to your attention a video on how to choose the right franchise:

Step 8. Launching the store

The franchisor is fully interested in his business developing and generating income. Therefore, he takes upon himself the costs of marketing and advertising, and also contributes in every way to the development and further promotion of the business.

In the article, you received a detailed answer to the question, how to open a franchise.

It should be noted that franchising business requires more capital investment than starting your own business from scratch.

But don't forget that the franchise minimizes the risks of financial failure and provides significant support, which is especially important for newcomers to the business world.

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Today in Russia there are hundreds of franchises, only a small part of them are really high quality

However, even a young and small company has every chance to create its own high-quality franchise. But for this, it is necessary to make the business concept of the company really competitive and not only at the local, but also at the federal level (are we doing honest business?).

Franchising statistics

Cafes and restaurants

Children's franchises

Retail

Market growth, number of franchises

Franchising market size in Russia, $ billion

distribution of franchising by investment

Up to 600,000 rubles.

up to 1,500,000 rubles.

more than 1,500,000 rubles.

Own example

Do it beautifully

You are unique

Draw up a contract carefully

Check and check

Learn and learn again