How to Get a Franchise in India – A Beginner’s Stepwise Checklist

Getting a franchise in India is one of the smartest ways to start your own business without building everything from scratch. Instead of struggling with branding, marketing, and customer trust, you get to partner with an already successful brand. But here’s the deal — you need a clear, step-by-step plan to avoid costly mistakes. Let’s break it down in simple terms.

Step 1: What Exactly Is a Franchise Business?

• Definition: A franchise is a business model where you (franchisee) buy the right to use another company’s brand, products, and systems in exchange for fees.
• Example: Buying a Domino’s Pizza franchise means you sell their pizzas, use their branding, follow their recipes — and in return, they give you training, marketing support, and customer trust.

Pro Tip: Think of a franchise as renting a “ready-made business model” instead of inventing one yourself.

Step 2: How to Choose the Right Franchise in India?

Picking the wrong franchise is the #1 mistake most beginners make. Don’t just go by what looks trendy on Instagram. Instead, use a structured evaluation method.

Key Factors to Consider Before Choosing

• Industry Demand
  • Food & Beverages (cafes, QSRs, tea chains) → 35% market share in India.
  • Health & Wellness (gyms, salons, Ayurveda spas) → Fastest-growing post-COVID.
  • Education & EdTech (coaching, preschools) → Huge demand in Tier-2/3 cities.
  • Retail (eyewear, fashion, grocery) → Stable long-term returns.
• Budget & Investment Range
  • Micro-franchises: ₹2–10 lakh (e.g., juice kiosks, tea stalls).
  • Mid-range: ₹15–50 lakh (e.g., Lenskart, Apollo Pharmacy).
  • Premium: ₹50 lakh – ₹1 crore+ (e.g., McDonald’s, Starbucks).
• Brand Reputation & Success Rate
  • Check online reviews, news, and franchisee feedback.
  • Avoid brands with high failure rates (>50% outlets closing within 2 years).
• Franchise Fees & Royalties
  • Franchise Fee: One-time payment for the license.
  • Royalty: Ongoing % of sales (usually 5–10%).
  • Some brands like Chai Sutta Bar charge low royalties to attract small investors.
• Support System from Brand
  • Training: Will they train you & your staff?
  • Marketing: Do they run national campaigns (TV ads, digital marketing)?
  • Technology: Do they give POS systems, CRM, and inventory tools?
  • Supply Chain: Reliable raw material supply at fixed prices?
• Territory Rights
  • Will you get exclusivity in your area (no other franchise within X km)?

Popular Franchise Options in India

Pro Tip: Always do a location test → rent a shop space in the area for a week (pop-up style) and see if people respond to the product/service.

Step 3: What Are the Costs Involved in a Franchise?

Here’s a quick breakdown

Pro Tip: Always ask for a breakdown of hidden costs like training, software, and marketing fees.

Step 4: What Legal Registrations and Licenses Do You Need?

Franchising isn’t just about setting up shop — you need the right legal paperwork to avoid penalties.

Mandatory Registrations in India

• GST Registration
  • Needed if turnover > ₹40 lakh annually or interstate sales.
  • Apply online at the GST portal.
• FSSAI License (for food businesses)
  • Must for restaurants, cafes, food trucks, bakeries.
  • Three levels: Basic (₹100/yr), State (₹2,000–5,000/yr), Central (₹7,500/yr).
• Shops & Establishments Act Registration
  • Mandatory for most retail outlets and offices.
  • Regulates working hours, wages, holidays, etc.
• Trade License
  • Issued by the local municipal authority.
  • Ensures your outlet follows local laws (sanitation, fire safety).
• MSME/Udyam Registration (Optional)
  • Helps small businesses get subsidies, loans, and govt benefits.
• Trademark/Brand Agreement
  • The franchise agreement should clearly state your right to use the brand name, logo, and IP.

Legal Checklist Table

Hack: Hire a CA or business consultant for legal compliance — saves you weeks of paperwork stress.

Step 5: How to Apply for a Franchise? (Stepwise)

This is the most practical step. Here’s the 8-step roadmap

Detailed Step-by-Step Process

• Research & Shortlist Brands
  • Use Franchise India, Franchise Bazaar, or brand websites.
  • Filter by budget, industry, and location preference.
• Submit Franchise Inquiry Form
  • Most brands have a simple “Apply for Franchise” form on their website.
  • Example: Domino’s Franchise Form.
• Attend Brand Orientation Call / Meet
  • Brands usually invite shortlisted applicants for online/offline meetings.
  • They explain costs, expectations, and the business model.
• Get Franchise Disclosure Document (FDD)
  • Legal document containing:
    • Investment breakdown
    • Franchise fees & royalties
    • Training & support offered
    • Termination clauses
• Do a Financial Feasibility Check
  • Calculate ROI (Return on Investment).
  • Ask existing franchisees about sales & profits.
• Negotiate Terms & Sign Agreement
  • Negotiate royalty % and territory exclusivity.
  • An agreement usually lasts 5–10 years.
• Complete Legal Registrations
  • Apply for GST, FSSAI, and Trade License (as explained in Step 4).
• Store Setup & Training
  • Franchise team helps with store design, staff hiring, and POS setup.
  • Training covers sales, operations, and customer service.
• Launch & Promotions
  • The brand often does grand opening promotions (social media ads, discounts).
  • Example: Chai Sutta Bar gives free tea on launch day to attract crowds.

Franchise Application Flowchart

Research → Apply Online → Orientation Meeting → FDD Review → ROI Analysis → Agreement Signing → Licenses → Setup & Training → Launch

Pro Tip: Never skip the step of talking to existing franchisees. They’ll tell you the ground reality beyond glossy brochures.

Step 6: Should You Take a Loan for Franchise Investment?

• Bank Loans: Banks like SBI, ICICI, and HDFC offer franchise loans under business loans.
• Government Schemes:
  • PM Mudra Loan (up to ₹10 lakh, collateral-free).
  • CGTMSE Scheme (credit guarantee for MSMEs).

Example: Many small tea franchises in India (like MBA Chai Wala) have started using Mudra Loans.

Step 7: What Are the Risks & Challenges in a Franchise?

Not everything is rosy — be prepared for challenges:

• High dependency on brand reputation (if the brand fails, you fail).
• Less flexibility → You must follow brand rules.
• Ongoing royalty payments eat into profit.
• Location risk (wrong site = loss-making outlet).

Pro Tip: Always run a location feasibility study before finalising.

Conclusion

If you’re wondering “How to get a franchise in India?”, the answer is simple: Research well, know your budget, follow legal steps, and partner with the right brand. With India’s booming consumer market, franchising is one of the fastest ways to enter entrepreneurship — but success depends on smart planning.

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