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Opening an Archies Paper Rose ShoppeFranchise Store

Buying a franchise is just like buying a business but with a difference. A franchisee enters

into a long-term relationship with the franchisor in which he will have to rely on the

franchisor to a large extent for the success of his own business. The franchisee will not be

allowed to run his business in what-ever way he thinks fit. He will have the obligation to run

it precisely in accordance with the franchisors system.

In assessing a franchise opportunity, the following factors shall be considered :

1. Examine the franchisors financial position in great detail. It should be evident thatthe franchisor has spent money on providing that his concept works in practice and

that he is adequately capitalized and financed to run the business in future.

2. Check how thoroughly the franchisor has market tested the business.3. Asses how well the system works in practice. Are the existing franchisees (if any)

pleased with their businesses and the performance of the franchisor?

4. Does the business have staying power, or is it based on something which istemporarily fashionable?

5. No one should buy a franchise from any other than the franchisor. Do not deal withfranchise brokers. They tend only to be interested in making sales and are not around

later when problems may arise.

6. Ask a lawyer to check the franchise agreements, preferably one who has experience inthe field. A franchisor needs to have controls in the agreement to ensure the

uniformity of the system and the quality of his products or service. The agreement

should be fair to you and the franchisor, and it should cover the services which youhave been told you will get from him. However, by nature the contract will be one-

sided.

7. It must be understood that there is always the risk that a franchisee might not besuccessful in the business, despite the success of others.

A visit was made to an Archies Paper Rose shop owned by M/s Daily Picks , Ber Sarai

market for getting the insights. Based on the above factors and facts gathered from the visit

following steps can be listed for opening an Archies franchise.

1. Archies has more than 2000 outlets and franchises spread across 120 cities and 6countries which sells soft toys, printed mugs, greeting cards, wallets and watches,fashion accessories, perfumes and deodorants, fresh flowers, personalize gifting

options etc. At this stage gather all relevant information about the company and its

business. In this case the shop owners brother was already in this business who

provided him sufficient information about the business, the company and the

performance.

2. The next step is to estimate the initial investment which would be required and theprimary requirements of franchisor (Archies in this case).

3. For an Archies Paper Rose Shop, an initial investment of Rs 9-10 lacs is requiredwhich includes the following.

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Miscellaneous and Administrative expenses, Rs 75,000/- which is non-refundable. Security deposit of Rs 75,000/- which is interest free and refundable. Cost of interior designing which is approximately Rs 1,400/- per square ft. Accessories like air conditioners, computer, music system etc (Rs 50,000/- to

75,000/-approx). First consignment of Rs 3 lacs to 4 lacs. Apart from that franchisee has to contribute Rs 1500/- per month covering

membership fee and common group advertising.

An estimate of ROI should be made based on total investment and expected salesto know the profitability of business.

4. The next step is to understand the requirements of premises for opening the store: It should be the best location of the city/area. The premises can be leased/rented/owned. Required carpet area is 300 sq. ft. and above. The store should be on ground floor with a frontage of 10 ft. The other requirements of the store are that it has sell products sourced through

Archies supplies only. The display area for different categories of products has to

be maintained. To ensure that frequent checks are done by Archies managers.

5. The next step is to study the demographic nature of the area selected and spendingpattern for opening the store. Since it sells mainly gift products, so an area which has

a large youth population can be considered. In this particular case, the shop owner has

his franchise store in Ber Sarai. Though, there are a large number of students living in

and around this area, however, their spending on gift items is low leading to lower

sales volume. So, both nature of population and their spending pattern are important.

6. After going through all the above details, a help of lawyer can be taken to understandall the legal aspects of terms and condition before applying for franchise and signing

the agreement.

There are several other questions which needs to be answered and a prospective franchisee

must pay close attention to the following factors:

1. Weigh the advantages and disadvantages.2. Assess himself, the business and the franchisor.3. Consider and put into perspective the advice of others who are qualified to give it.4. Consider and consult his family5. Make up his own mind.

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