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Franchise business is touted as the most profitable business in Chennai which gives the opportunity in the growing economy of Tamilnadu, in which Chennai is the best place to start a franchise business. But is it truly that profitable?

Franchising is the fastest-growing business model in the Indian subcontinent. The Indian franchise industry market is valued at 800 million dollars and is expected to grow at a rate of 30 to 35% per annum.

With such exponential growth projected for franchising in India, it’s hard to deny its profitability.

Consider this: 90% of Indian startups fail within five years, as per IBM research. In contrast, the success rate of franchising is approximately 85%.

That’s why franchising is deemed more profitable in India and also for entrepreneurs who are starting their franchise business in Chennai.

Now, your concern might be: What is the best franchise business in India, and how can you choose the most profitable one?

Before exploring various ideas of franchise business in Chennai, it’s essential to understand that the profitability of a franchise business, whether it’s low investment or high investment, is determined by several metrics.

Let’s start with the basics.

What is a Franchise business?

Franchise businesses operate under a business model in which the franchisee, aspiring to run a franchise of a particular brand, pays an upfront franchise fee. This fee grants them the right to use the trademark, services, and products of the brand, allowing them to generate profits through their operations. In a franchise business, every aspect of the business model, from market establishment to branding, is already established.

Every business wants to make profits, so in the franchise business model, how do you evaluate the success of a franchise business?

Several factors come into play when determining the profitability of franchise business in Chennai:

1. Franchise Choice
2. Focus on high-foot traffic areas
3. Investments
4. Franchise fee and royalty fee
5. Legal and regulatory compliance

Considering these factors will help you gauge the profitability of a franchise business in Chennai.

Finding the Right Franchise Business in Chennai for you

In today’s business world, franchises are regarded as one of the best business opportunities available in the vibrant Chennai city. When selecting a franchise, it’s essential to understand your preferences and needs for starting your own business.

Consider your business goals. Are you aiming for a higher income, seeking a passive source of revenue, or looking to balance entrepreneurship with family time? Also, consider the domain of your franchise business depending on your interest.

Understanding your preferences and goals can guide you toward choosing a franchise business that fits your needs.

The success of a franchise business in Chennai largely depends on the brand and its market presence. Look for well-established franchise opportunities with a strong customer base in India. Conduct thorough market research to identify franchises with proven track records.

Focus on High Foot Print Areas

In the franchise business, location is everything.

Whether you run a retail store franchise, restaurant franchise, or tea franchise, being situated in high foot traffic areas means more customers walking through your doors and purchasing your products or services.

Visibility is crucial for any business.

If your franchise is located in areas with low foot traffic, such as remote highways or isolated areas, you’ll miss out on potential customers. Instead, aim to find prime locations with high foot traffic and excellent visibility to maximize your business’s potential.

Investment and Budgeting plan for your franchise business in Chennai

In the franchise business industry, opportunities range from low to high investment options. The amount you’ll need to invest in a franchise business in Chennai depends on factors like size, type, and industry. For instance, opening a restaurant franchise in Chennai typically requires a higher initial investment compared to starting a push-cart tea franchise.

When setting up a franchise business in Chennai, you’ll encounter franchise fees, royalties, and other working and operational expenses. It’s crucial to plan your budget accordingly to ensure the smooth operation of your franchise business.

Franchise Bhoomi guides you have a minimum of 6 months’ worth of operational costs to run your franchise business smoothly.

Also read this: Start a Food Franchise under 2 Lakhs in India – Choose the Best

Franchise Fee and Royalty Fee for Franchise Business in Chennai

Franchise fees act as your ticket to enter into the best franchise business space. You’re essentially paying the franchisor upfront for the complete business setup. This fee is what grants you ownership and operation rights to run your franchise business in Chennai, depending on the brand you choose.

However, don’t assume that franchise fees are the only upfront costs. The total initial investment may differ, including expenses beyond the franchise fee. For example, if the franchise fee is 3 lakh rupees, the total startup cost could be around 6 lakh rupees.

Always budget for the upfront costs when starting your franchise business.

Why do brands charge a Royalty fee?

Royalty fees are ongoing payments made by the franchisee for continued brand usage, separate from the one-time franchise fee. These fees support the brand’s ongoing operations and foster a supportive relationship between the franchisee and franchisor.

Think of it as having a mentor by your side, available when needed, for whom you’re paying a fee.

Royalty fees also contribute to the brand establishment. For instance, if the brand launches a new advertisement, it boosts visibility, leading to increased profits for both the franchisee and the franchisor.

Ensure that you have enough budget for the franchise fee and also the operational cost.

For example:

If your outlet Sales 2,50,000 Per Months, The Monthly royalty fee: 12%

2,50,000*12/100 = 30,000

30,000 You wants to give to the brand as a royalty fee of the month

***This amount will change, based on your outlet total sales***

Legal & Regulatory Compliances in Franchise business in Chennai

Operating under a unique business model, franchises heavily rely on property. To safeguard assets like trademarks, copyrights, and other business tactics, a franchise agreement must be in place. This agreement, mutually signed between you as the franchisee and the franchisor, outlines obligations and responsibilities, serving as a foundation for future dealings.

As a franchisee, it’s crucial to thoroughly understand the franchise agreement provided by the franchisor. If you have any disagreements, it’s wise to address them with the franchisor before signing.

If you’re a first-time entrepreneur or business owner unsure about reviewing a franchise agreement, seeking professional help is advisable. Franchise Bhoomi expert team is here to guide you through the legal and regulatory processes

Let’s See list of Franchise Business in Chennai

Conclusion

Navigating the world of franchising demands meticulous effort and insight. Embarking on the path to start a franchise business in Chennai can be significantly enhanced with Franchise Bhoomi’s expert guidance, paving the way for your success. From selecting the ideal brand to establishing your franchise venture, we’re here to assist you every step of the way.

At Franchise Bhoomi, we offer a comprehensive online platform designed to connect you with the franchise opportunities best suited to your aspirations. With our expertise and resources, we ensure that you find the perfect match for your entrepreneurial endeavours.

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