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An Introduction to Infinity Retail franchisee
What is franchising?
“A franchise operation is a contractual relationship between the franchisor and franchisee in which the franchisor offers or is obliged to maintain a continuing interest in the business of the franchisee in such areas as know-how and training; wherein the franchisee operates under a common trade name, format and/or procedure owned or controlled by the franchisor, and in which the franchisee has or will make a substantial capital investment in his business from his own resources.”
- Definition by International Franchise Association
What is franchising?
Legal and commercial arrangement concerning the successful business of a franchisor
Use of franchisor’s trade name, format, system and/or procedure under licence
Means to raise capital and expand quickly Assistance to franchisee
Marketing, management, advertising, store design, standards specifications
Payment by franchisee by way of royalty, licensee fee or other means
What is franchising?
Franchising is more than distributorship
Extends to an entire operation or method of business
Greater assistance, control and longer duration Distributor merely re-sells products to retailers
or customers
TYPES OF FRANCHISE
3 main types of franchise:
Product distribution franchise; Business format franchise; and Management franchise.
A product distribution franchise model is very much like a supplier-dealer relationship.
Typically, the franchisee merely sells the franchisor’s products. However, this type of franchise will also include some form of integration of the business activities.
PRODUCT DISTRIBUTION FRANCHISES
PRODUCT DISTRIBUTION FRANCHISES
Examples of famous product distribution franchise:
Produces the syrup concentrate
Sells the syrup concentrate
FRANCHISEE Produces the final drink
Retail Stores
Restaurants & F&B Outlets
Vending Machine
Operators
PRODUCT DISTRIBUTION FRANCHISES
BUSINESS FORMAT FRANCHISING
In a business format franchise, the integration of the business is more complete.
The franchisee not only distributes the franchisor’s products and services under the franchisor’s trade mark, but also implements the franchisor’s format and procedure of conducting the business.
Famous Examples
BUSINESS FORMAT FRANCHISING -
outlet in Sale, Australia
outlet in Marseille, France
MANAGEMENT FRANCHISE
A form of service agreement.
The franchisee provides the management expertise, format and/or procedure for conducting the business.
Famous Examples
Why is franchising important to SMEs?
Leveraging on a recognised brand name Enhancing business image Ensuring consistent quality Attaining higher productivity/better
motivated staff Access to good locations Economies of scale Reducing risks of failure
WHY FRANCHISE?
Franchises offer important pre-opening support: site selection design and construction financing (in some cases) training grand-opening program
WHY FRANCHISE?
Franchises offer ongoing support training national and regional advertising operating procedures and operational
assistance supervision and management support increased spending power, access to bulk
purchasing and economies of scale
Common considerations of franchisors
Developing franchise concept Market research Familiarity with local laws and
regulations Providing training and support to
franchisees
Common considerations of franchisors
Criteria for choosing franchisees Control over franchisees Supply of products/materials to
franchisees Intellectual property rights issues, e.g.
trade mark registration
Common considerations of franchisees
Demand Profitability of franchise, and length of
time required to recoup investment Track record of franchisor Support rendered to other franchisees
Common considerations of franchisees
Experience and profitability of other franchisees
Existence of competition Capital required Demands of franchisor, e.g. income
projections, deadline to open more franchise outlets
Franchisor–Franchisee relationship
Regulated by contract which usually covers: Initial fee Royalty fee/Management fee Capital required from franchisee Territory/Area of operation Duration of license and renewal IPRs Termination
BE CAREFUL
The franchisee is not completely independent.
In addition to the initial franchise fee, franchisee must pay ongoing royalties and advertising fees.
Franchisee must be able to balance restrictions and support provided by the franchisor with their own ability to manage the business
A damaged image or franchise system can result if other franchisees perform poorly or the franchisor has financial problems.
The duration of a franchise is usually limited and the franchisee may have little or no say concerning termination
BE CAREFUL
Not reading, understanding and/or asking questions about the franchisee agreement and other legal documents
Not understanding the responsibilities of a franchisee and the rights and obligations of a franchisor
Not seeking sound legal and financial advice Not verifying oral representations of franchisor
Common Mistakes of Prospective Franchisees
Not analyzing the local market in advance Not analyzing the competition Not making thorough due diligence of the
franchisor Not choosing the right location
Common Mistakes of Prospective Franchisees
Generally young and well educated 62% below 40 years old 57% had post-secondary education 32% own their own outlets 46% occupy the outlets as tenants
FRANCHISING SURVEY
FRANCHISING SURVEY
Reason for Franchising
2/3 of franchisees felt that economies of scale in bulk purchasing encouraged them to consider franchising
FRANCHISING SURVEY
Feasibility of Franchising
Franchising is a more feasible option of business expansion than starting own outlets
FRANCHISING SURVEY
Success of the Franchise
FRANCHISING SURVEY
Success of Franchising
Franchisors’ Improvement in Average Monthly Sales since Franchising
FRANCHISING SURVEY
Success of Franchising
Franchisors’ Improvement in Average Monthly Net Profit since Franchising
FRANCHISING SURVEY
Success of Franchising
Franchisors’ Improvement in Average Monthly Sales since Franchising
FRANCHISING SURVEY
Franchising helps existing businesses do better.
Franchisees’Response to the Statement:“Joining a Franchise has Helped Me to Do Better than Before.”
FRANCHISING SURVEY
Business Performance
Percentage Increase in Average Monthly Sales for Franchisees who were Previously Running a Business in the Same Trade
FRANCHISING SURVEY
Business Performance
Percentage Increase in Average Monthly Net Profit for Franchisees Previously Running a Business in the Same Trade
What is IMS ? (Infinity Marketing Services Pvt Ltd)
Started in September 2009 CIN No. U51101DL2009PTC194069 International Head office in New Delhi, India Renowned Organization in the field of Online
Education and Networkmarketing ISO 9001:2008 certified company Having a customer base of more than 6200
families in more than 50 cities across 10 major states of India
Infinity Retail Franchisee
Minimum Area Required - 1000sq ft Location – Prime location, easily
accessible Capital Required – 5 lac INR Qualification required - Higher secondary Minimum population - 50000 Families Rent to be paid by Franchisee Salary to be paid by Franchisee
Infinity Retail Franchisee
Electricity, Phone, Water and internet bill etc to be paid by Franchisee
Fixed return on capital invested 1.50% pin point (optional) -100 pins Commission on Pin Sales Minimum -100/-
per pin Stock loss will be bearded by franchisee. franchisee amount to be deposited in
full. (no token system)Terms & Conditions Apply
Infinity Retail Franchisee
Store will be started within 90 days after deposit of franchisee amount.
If the franchisee holder wants to withdraw from franchisee, a franchisee fee of 25% will be deducted from franchisee amount.
Computer system (hardware/software) will be provided by company.
Branding, color work, racks, furniture, electrical fixtures will be provided by company.
Terms & Conditions Apply
Infinity Retail Franchisee
Product Category
Associate Discount
Franchisee Commision (cash sales)
Fanchisee commison (Voucher
sales)Associate
commision
Commision upto 20 levels
Category I 0% 0% 0% 0.25 5%
Category II 5% 6% 3% 0.25 5%
Category III 10% 6% 3% 0.25 5%
Category IV 15% 6% 3% 0.25 5%
Category V 20% 6% 3% 0.25 5%
Thank You
For more details please write to us at [email protected]