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How does a franchise model work?

Starting a business entails understanding and dealing with many issues—legal, financing, sales and marketing, intellectual property protection, liability protection, human resources, and more. Whereas A franchise business model opportunity provides benefits for both seller and buyer.   

People who buy franchises have a higher chance of success than in a sole proprietorship. It takes a shorter time for the opening, initial training and ongoing support is provided by the company, the selling power of a known brand , the cost is lower because of group purchasing and use of an established business model, national and regional advertising campaigns, centralised call centres and a huge balanced network which organises annual conferences, and franchise associations and secured funding. 

Franchise Business Model- How it Works?

 A franchise enables companies to expand their business by supplying independent business owners with an established business, including its name and trademark. A franchise is a way of structuring a business. Generally, it involves the owner of a business (known as the franchisor) licensing to a third party (known as the franchisee) the right to operate a business or distribute goods and services using the franchisor’s business name and systems (which varies depending on the franchisor) for an agreed period of time, in return for a fee.  

Success Rate of a franchise Business in India   

 One major advantage of the franchise industry players is that the business model and products/services are already established. It becomes much easier to run a readymade operation, and at times, even support for training and planning of finances are provided by the owners to new franchisees. This is just one reason why the sector has achieved success worldwide, including in the Indian subcontinent. While the industry is in its nascent stages in India compared to other trades, the sector’s growth has been strong – a figure to the tune of 30% annually. According to Gaurav Marya, Chairman of Franchise India, “The franchise industry in India is today estimated to be at USD 47-48 billion.” And going by recent trends, it seems that this figure is only set to rise in the future.

India has already made its place as the second-largest franchise market globally (after the United States). With around 1.5 lakh franchisees and 4,600 franchises operating in the country, he envisions that “this industry would grow to at least about USD 140-150 billion” in the next five years. 

Market watchers also believe that India still has untapped marketing potential within the industry despite the boom in franchising. This means that the sector is set to grow even faster in the coming years.

Why would you buy a franchise?  

  1. Earn Incentives:  There are incentives to the franchisee in owning and operating its own business. Monetary rewards are directly related to the efforts of the franchisee. 
  2. Established Brand Name: In some respects, it is easier for the franchisee than starting up their own business. A franchise has a brand that is well established.
  3. Operational assistance: The franchisor generally provides assistance in identifying suitable business locations, which should minimize the risk of the franchise not operating successfully, and setting up so that it is ready to open for business.
  4. Term of a franchise: The term can be flexible. It could be as short as one year or have no fixed term and last forever depending on you and your business profits.
  5. Training support: The franchisor generally provides ongoing support, training, and knowledge (including their past mistakes). This may be specific to their business model or general business training in areas like marketing, merchandising, and accounting.
  6. Capital: Buying a franchise that is already successful is generally cheaper than starting your own business from scratch. If the franchisee sells goods, the franchisee’s purchase price is usually lower than if it were a stand-alone business as the franchisor should have access to bulk discounts.

About Jugnoo Franchise Business 

Jugnoo is India’s largest technology-driven on-demand auto-rickshaw aggregator, which connects riders with safe, reliable, convenient auto-rickshaws just in a few clicks. 

With a fleet of over 50,000 autos and taxis on the road across 50+ cities, Jugnoo is expanding its services in various cities across the country. Jugnoo has established itself as an auto aggregator and is a one-stop destination for all hyper-local needs of people providing a range of services to its customers at affordable prices.  Auto rickshaws are an essential medium of transportation in India, especially in tier 2 and tier 3 cities.

Jugnoo forayed into the B2B segment with B2B logistics service, ‘Jugnoo Delivery’ and comprehensive routing solutions, ‘Flight Map’ Regarding the auto aggregator service, pricing for Jugnoo autos differs on a city to city basis. 

What Jugnoo  Franchise Business model Provides you:

  1. Annual Agreement 
  2. Franchise’s and Technical support 
  3. Operations Assistance 
  4. One-time Setup fee and License Fee 
  5. On-site training and 24*7 Support  

 Jugnoo charges a commission back from the drivers. The commission rate is 10% of the ticket size in most cities. They run several incentive schemes for the drivers; this again is based on the stage of maturity in a city and the drivers’ engagement level. It is trying to build efficiency in the market where drivers’ final income through Jugnoo should increase significantly more than what they were earning on the road. The customer gets a predictable and cost-effective medium of transport. For food delivery, the company charges merchants a commission and pays the auto drivers for delivery. 

Taxi and auto rental services are currently a booming industry. People always want to reach somewhere with less expensive and more eco-friendly ways to reach their destination, avoiding traffic and long-distance driving and finding a place to park their cars. 

If you are looking forward to establishing an online presence in your taxi/ auto business, you should talk to our Experts about it. 

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