How owning franchising in India is beneficial?





Franchising is a substitute for capital acquisition which allows entrepreneurs to restructure their business without the risk of debt or the cost of equity. Franchisee offers all the capital needed for business restructuring and runs a unit, it permits businesses to expand using the resources of others. Franchising lets you expand your business with no contingent liability and reduction of risk to the franchise.

Benefits of owning a franchise in India-.
1.     Access to Capital: The common issue faced by businesses these days is the lack of access to capital. Investors generally find it challenging to raise funds and invest in the business, entrepreneurs found that the growth of business stops due to lack of funds. The franchise is a better option with better investment schemes and funds for restructuring your business.

2.     Inspiring Management: Entrepreneurs usually face challenges in business restructuring and retaining good managers. It takes a lot more time to invest in training employees and to make sure that managers are proficient. A franchise allows managers to outperform and inspire an organization to grow.

3.  Speedy Growth: The franchise makes sure that they capture a market leadership position before competitors invade in their space because of the franchisee performs most of these tasks. Franchising permits businesses to compete with larger companies so they can grow in markets before these companies can respond.

4.  Increased Profitability: The staffing leverage and ease of supervision permit franchise organizations to run in a highly profitable way. Since franchisers depend on their franchisees to undertake site selection, lease negotiation, local marketing, hiring, training, accounting so that a franchise organization could be more profitable.

5.  Improved Valuations: A franchise can improve its valuations by faster growth, better profitability, and increased organizational leverage. Franchisers are usually valued at a higher multiple than other business structures. When it comes time to sell and for business restructuring, the growth of successful franchises can add value for promoting a business.

A combination of the above said benefits offer a business with substantially reduced risk. Franchisers could grow to hundreds or even thousands of units with limited investment and without investing much in their capital on unit expansion.

Comments

Post a Comment

Popular posts from this blog

Get BIS Certification via ASC Group

Image
BIS Certification is a means for offering third party guarantee of quality, safety and dependability of products to the consumer. BIS Certification is voluntary and the Government of India has made BIS certification compulsory for certain products taking into concern public health. Bureau of Indian Standards BIS Certification is provided in India by Bureau of Indian Standards (BIS). The National Standards Body has been efficaciously promoting and nurturing standard program within the country since 1947. BIS came into practice in 1987 through an Act of Parliament and is involved in numerous actions like standards formulation, certification of products, hallmarking, testing and calibration scheme and more. BIS Product Certification Scheme BIS Product Certification Scheme is one of the biggest in the world. BIS Certification lets the licensees practice the popular ISI mark on their product, which is similar to quality products. As per Government notification, it is compulsory f...
Read more

What is Vendor Management Solutions?

Image
In the fa ce-pace of industrial development, the business has to work with different vendors to compete with economic and geographical barriers. Vendor management is the process that boosts the companies to suitable measures for minimizing potential risks, controlling cost associated with vendors to guarantee outstanding service deliverability, and vendor relationships. Vendor Management Solutions comprises of identifying vendor solution, vendor payment, negotiation, handling tax and legal matters, sourcing vendors, managing relationships, etc. The vendor management experts manage multiple vendors with ease, evaluate the performance according to the company standard, ensure timely payment, etc. A vendor management software is an online web-based tool acting as a single node to cope-up with all the vendor-associated tasks in a company while ensuring enhanced efficiency and continuous growth in an affordable manner. Managing multiple vendors and their matters in an effective mann...
Read more

What are the types of Advance Pricing agreement (APA)?

Advance Pricing Agreement was introduced in India by the Central Board of Direct Taxes in 2012 to minimise the dispute in the transfer pricing structure in India which required the Arm’s Length Price (ALP) for every international transaction. It was instituted by Finance Act, 2012 by adding section 92CC and 92CD that shall be read with rules 10F to 10G and rule 44GA. What is an Advance Pricing agreement (APA)? Advance Pricing Agreement is an agreement between CBDT and taxpayer to fix the transfer pricing policy to resolve the future international pricing transaction of the taxpayer. After the Advance Pricing Agreement is fixed, the policy is applied for a definite period with certain terms and conditions. The purpose of APA is to promote transparency for taxpayers with regards to tax risks, to have a check on tax evasion by big MNCs working on international level. What is the Objective of the Advance Pricing Agreement?   APAs is applied for different international transactions: In...
Read more