Major Types of Franchise Business in the Indian Economy

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The four major sorts of franchises that are available in India are the merchandise franchises, the business franchise, the manufacturing franchises, comprising of the business format franchises.

Product franchises

The product franchises are ones where the manufacturer uses the franchise contract to come to a decision the ways within which the franchisee is going to be distributing the products.

These types of instances in a franchise would be one where a retail establishment tends to procure the complete franchise model that can help to distribute the product. In these cases, the franchise is going to be ready to use the trademark and brand of the manufacturer to sell or distribute the product.

The store owner is going to pay the manufacturing company a particular amount of previously agreed fee or come to an agreement regarding the acquisition of a minimum amount of inventory for selling to the shoppers.

A major advantage of this type of franchise is that the franchisee is additionally ready to turn the experience of the franchiser additionally to the brand.

Manufacturing franchises

In these cases, the franchises are allowed to create the products with licenses and market them by using the name and trademark of the initial company. They will also use national advertising to promote the manufactured product.

The company that originally owns the merchandise is provided a franchise fee and a particular payment for the units sold.

The later payment is not a standard feature and must be included with all the mandatory specifics within the contract. A significant example of this sort of franchise is that the food and beverage industry. However, they are not considered the best low-cost franchise business but are very profitable. 

Business format franchise

This is the foremost-preferred kind of franchise in India. Here the franchisee gets a successful business model that is backed by a preferred brand and products. The brand owner provides the specified training and helps in establishing the business. The franchisor also provides the supplies and receives a royalty fee from the franchisee.

The franchisor helps in providing the franchise business with the raw materials and products and this is often done on a very frequent basis so that it could make sure that the latter is continuously providing quality services as a result. Major samples of such a franchise-type are the nourishment chains. 

Business franchise 

The business franchise ventures can be termed as of the biggest examples where the franchisee business buys and will help in selling the products from the franchisors. In these cases, the franchisors normally provide franchisees a client base, which they have to take care of.

A major example of such sorts of a franchise business is the coin machine. With vending machines, the franchisee buys them from the franchisor and is consequently accountable for servicing and selling them. They also get their share from the proceeds.

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