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An Introduction to Infinity Retail franchisee

An Introduction to Infinity Retail franchisee. What is franchising? “ A franchise operation is a contractual relationship between the franchisor and franchisee

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Page 1: An Introduction to Infinity Retail franchisee. What is franchising? “ A franchise operation is a contractual relationship between the franchisor and franchisee

An Introduction to Infinity Retail franchisee

Page 2: An Introduction to Infinity Retail franchisee. What is franchising? “ A franchise operation is a contractual relationship between the franchisor and 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

Page 3: An Introduction to Infinity Retail franchisee. What is franchising? “ A franchise operation is a contractual relationship between the franchisor and franchisee

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

Page 4: An Introduction to Infinity Retail franchisee. What is franchising? “ A franchise operation is a contractual relationship between the franchisor and franchisee

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

Page 5: An Introduction to Infinity Retail franchisee. What is franchising? “ A franchise operation is a contractual relationship between the franchisor and franchisee

TYPES OF FRANCHISE

3 main types of franchise:

Product distribution franchise; Business format franchise; and Management franchise.

Page 6: An Introduction to Infinity Retail franchisee. What is franchising? “ A franchise operation is a contractual relationship between the franchisor and franchisee

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

Page 7: An Introduction to Infinity Retail franchisee. What is franchising? “ A franchise operation is a contractual relationship between the franchisor and franchisee

PRODUCT DISTRIBUTION FRANCHISES

Examples of famous product distribution franchise:

Page 8: An Introduction to Infinity Retail franchisee. What is franchising? “ A franchise operation is a contractual relationship between the franchisor and franchisee

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

Page 9: An Introduction to Infinity Retail franchisee. What is franchising? “ A franchise operation is a contractual relationship between the franchisor and franchisee

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.

Page 10: An Introduction to Infinity Retail franchisee. What is franchising? “ A franchise operation is a contractual relationship between the franchisor and franchisee

Famous Examples

Page 11: An Introduction to Infinity Retail franchisee. What is franchising? “ A franchise operation is a contractual relationship between the franchisor and franchisee

BUSINESS FORMAT FRANCHISING -

outlet in Sale, Australia

outlet in Marseille, France

Page 12: An Introduction to Infinity Retail franchisee. What is franchising? “ A franchise operation is a contractual relationship between the franchisor and franchisee

MANAGEMENT FRANCHISE

A form of service agreement.

The franchisee provides the management expertise, format and/or procedure for conducting the business.

Page 13: An Introduction to Infinity Retail franchisee. What is franchising? “ A franchise operation is a contractual relationship between the franchisor and franchisee

Famous Examples

Page 14: An Introduction to Infinity Retail franchisee. What is franchising? “ A franchise operation is a contractual relationship between the franchisor and franchisee

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

Page 15: An Introduction to Infinity Retail franchisee. What is franchising? “ A franchise operation is a contractual relationship between the franchisor and franchisee

WHY FRANCHISE?

Franchises offer important pre-opening support: site selection design and construction financing (in some cases) training grand-opening program

Page 16: An Introduction to Infinity Retail franchisee. What is franchising? “ A franchise operation is a contractual relationship between the franchisor and franchisee

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

Page 17: An Introduction to Infinity Retail franchisee. What is franchising? “ A franchise operation is a contractual relationship between the franchisor and franchisee

Common considerations of franchisors

Developing franchise concept Market research Familiarity with local laws and

regulations Providing training and support to

franchisees

Page 18: An Introduction to Infinity Retail franchisee. What is franchising? “ A franchise operation is a contractual relationship between the franchisor and franchisee

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

Page 19: An Introduction to Infinity Retail franchisee. What is franchising? “ A franchise operation is a contractual relationship between the franchisor and franchisee

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

Page 20: An Introduction to Infinity Retail franchisee. What is franchising? “ A franchise operation is a contractual relationship between the franchisor and franchisee

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

Page 21: An Introduction to Infinity Retail franchisee. What is franchising? “ A franchise operation is a contractual relationship between the franchisor and franchisee

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

Page 22: An Introduction to Infinity Retail franchisee. What is franchising? “ A franchise operation is a contractual relationship between the franchisor and franchisee

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

Page 23: An Introduction to Infinity Retail franchisee. What is franchising? “ A franchise operation is a contractual relationship between the franchisor and franchisee

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

Page 24: An Introduction to Infinity Retail franchisee. What is franchising? “ A franchise operation is a contractual relationship between the franchisor and franchisee

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

Page 25: An Introduction to Infinity Retail franchisee. What is franchising? “ A franchise operation is a contractual relationship between the franchisor and franchisee

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

Page 26: An Introduction to Infinity Retail franchisee. What is franchising? “ A franchise operation is a contractual relationship between the franchisor and franchisee

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

Page 27: An Introduction to Infinity Retail franchisee. What is franchising? “ A franchise operation is a contractual relationship between the franchisor and franchisee

FRANCHISING SURVEY

Reason for Franchising

2/3 of franchisees felt that economies of scale in bulk purchasing encouraged them to consider franchising

Page 28: An Introduction to Infinity Retail franchisee. What is franchising? “ A franchise operation is a contractual relationship between the franchisor and franchisee

FRANCHISING SURVEY

Feasibility of Franchising

Franchising is a more feasible option of business expansion than starting own outlets

Page 29: An Introduction to Infinity Retail franchisee. What is franchising? “ A franchise operation is a contractual relationship between the franchisor and franchisee

FRANCHISING SURVEY

Success of the Franchise

Page 30: An Introduction to Infinity Retail franchisee. What is franchising? “ A franchise operation is a contractual relationship between the franchisor and franchisee

FRANCHISING SURVEY

Success of Franchising

Franchisors’ Improvement in Average Monthly Sales since Franchising

Page 31: An Introduction to Infinity Retail franchisee. What is franchising? “ A franchise operation is a contractual relationship between the franchisor and franchisee

FRANCHISING SURVEY

Success of Franchising

Franchisors’ Improvement in Average Monthly Net Profit since Franchising

Page 32: An Introduction to Infinity Retail franchisee. What is franchising? “ A franchise operation is a contractual relationship between the franchisor and franchisee

FRANCHISING SURVEY

Success of Franchising

Franchisors’ Improvement in Average Monthly Sales since Franchising

Page 33: An Introduction to Infinity Retail franchisee. What is franchising? “ A franchise operation is a contractual relationship between the franchisor and franchisee

FRANCHISING SURVEY

Franchising helps existing businesses do better.

Franchisees’Response to the Statement:“Joining a Franchise has Helped Me to Do Better than Before.”

Page 34: An Introduction to Infinity Retail franchisee. What is franchising? “ A franchise operation is a contractual relationship between the franchisor and franchisee

FRANCHISING SURVEY

Business Performance

Percentage Increase in Average Monthly Sales for Franchisees who were Previously Running a Business in the Same Trade

Page 35: An Introduction to Infinity Retail franchisee. What is franchising? “ A franchise operation is a contractual relationship between the franchisor and franchisee

FRANCHISING SURVEY

Business Performance

Percentage Increase in Average Monthly Net Profit for Franchisees Previously Running a Business in the Same Trade

Page 36: An Introduction to Infinity Retail franchisee. What is franchising? “ A franchise operation is a contractual relationship between the franchisor and franchisee

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

Page 37: An Introduction to Infinity Retail franchisee. What is franchising? “ A franchise operation is a contractual relationship between the franchisor and franchisee

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

Page 38: An Introduction to Infinity Retail franchisee. What is franchising? “ A franchise operation is a contractual relationship between the franchisor and 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

Page 39: An Introduction to Infinity Retail franchisee. What is franchising? “ A franchise operation is a contractual relationship between the franchisor and franchisee

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

Page 40: An Introduction to Infinity Retail franchisee. What is franchising? “ A franchise operation is a contractual relationship between the franchisor and franchisee

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%

Page 41: An Introduction to Infinity Retail franchisee. What is franchising? “ A franchise operation is a contractual relationship between the franchisor and franchisee

Thank You

For more details please write to us at [email protected]