What is a Franchise Business ?
Franchising is a form of business model where the owner of a business (known as franchisor) grants an individual or group of individuals (known as franchisee) the permission to operate under the brand, trademark, guidelines & the business model owned by the franchisor.

What are the different types of Franchise or Franchising Models?

There are 4 types of franchise models:

1. Company Owned Company Operated (COCO)
2. Company Owned Franchise Operated (COFO)
3. Franchise Owned Company Operated (FOCO)
4. Franchise Owned Franchise Operated (FOFO)

Company Owned Company Operated (COCO) – COCO is a model where the franchise store unit is owned by the brand and is run by the brand. It has nothing to do with franchising in the least. As a result, the franchise is funded entirely by the company. Employees of the brand run the franchise.

Company Owned Franchise Operated (COFO) – This is where the company invests in the franchise business and the franchisee runs it according to the company’s guidelines. This is unusual and uncommon in the market because most businesses that invest in expanding their operations choose to do so by themselves.

Franchise Owned Company Operated (FOCO) – The franchisee is the one that owns the property and is responsible for all additional capital expenditures. The store/outlet operations are managed by the franchising company. It is also known as Franchise Invested Company Operated (FICO)

Franchise Owned Franchise Operated (FOFO) – The company gives the franchise investor its brand name in this FOFO model. They do so in exchange for a non-refundable (franchise fee) and a pre-determined period. The brands decide on the prices and items for the outlet.
As a result, the franchise investor is the store’s owner, and the franchise must bear all operational costs.
Also, the Franchise is required to pay the Brand a percentage of income (royalty).
This model is the most used in the marketplace.
Under this model most of the risk & rewards rests with the franchise and support such as technical know-how, menu, SOPs, raw materials, operational guidelines, etc. are provided by the franchisor company.

Under what business model Chaai Seth business model operates?

Chaaiseth operates under the FOFO & COCO model of business franchise as a expansion measure.

What are the Factors one should look before starting any franchise outlet ?

Although based upon different and distinct business models as well as business models, and prerequisites keep on changing, however following point must be kept as a measure to track the franchise business model :

1. Entire franchise business model works on know-how. The company and the individuals operating such business must have good quality operational knowledge, the owners shall not act as a motivational speaker or sales person but they discuss the operational things in details.
2. Years of standing – Older the brand higher is the value, experience, and market worth. The brand shall not come out as a bubble suddenly, this bubble thing can be tracked by discussing with the business owners on operational level knowledge.
3. For any food related business, the SOP plays a key factor in maintaining same taste, SOP means the standard operating procedure to make any product, this is crucial because it tells the timing, temperature, and colour combination to consider so that food is made in a predefined and controlled environment.
4. The Business registration – Most of the companies now-a-days seeing the scope and popularity of business are jumping into the food related franchise, no matter their business registration has nothing to do with their current business model. You can ask for certain documents like MOA/AOA that describes the business work that a particular company can undertake.
5. The Mode and Identity of business – It should be noted that no business is a good business unless and until they have a perpetual succession, following type of business are considered as a business with perpetual succession –
   A Private Limited Company,
   A Limited Liability Partnership,
   A Limited Company,
   A One Person Company (OPC)

   It is to be noted that you must check the detail from Ministry of Corporate Affairs. The Link to check the details are here https://www.mca.gov.in/mcafoportal/viewCompanyMasterData.do

   A proprietorship business and a Partnership business are not the right type as to current market scenario to conduct or carry on business under the franchise model, it is because it takes only 24 hours to close such business, and further there is no such governing government rules or guidelines to look into it.

6. The trademark & intellectual property rights, the franchise model entirely runs on the module of licensing, and license is something which is valid and holds value only in case, the person issuing such license is having valid authority to issue such license.

The license or the trade name on which name (also known as Brand Name) is operating must own a trademark on such name, so that it protects your right as a franchisee. In case you take franchise of any company who has no trademark, and any person from your area/region starts their business with your business name and takes the undue advantage of your marketing expenses, than either you as franchisee or the company as franchisor will have any authority or right to stop that business reason being the franchisor or the company has no trademark of such business name.

You can check the brand name registration detail on the government of India trademark website, the link is here https://ipindiaonline.gov.in/tmrpublicsearch/tmsearch.aspx?tn=315070249&st=Wordmarkhttps://ipindiaonline.gov.in/tmrpublicsearch/tmsearch.aspx?tn=313986684&st=Wordmark  it can also ask for class just for reference the class for food business is 43.

You can consider above point to as an important measure to short list franchise business, remember glitter is not only gold and never get into trap to follow other or get impacted or influenced by other just because that person is doing. Its your hard earned money, invest in something that is having a worth and then only it will create and give a worth. It’s your hard earned money, you need to think wisely and precisely before investing in any glitter/bubble like story telling type of business.

If we talk about food business, than it runs of following 4 pillers :
1. Standard
2. Quality
3. Taste
4. Hygiene

Choose brand that is a food company maintaining the pillars of food, don’t get motivated by only sales pitch or marketing stunts, remember the worst & sick product needs the most effort of marketing & selling.