How to set up franchise business in India

Nikita Arya
Nikita Arya Aug 17 2019 - 3 min read
How to set up franchise business in India
Consider these pointers before you think of setting up a franchise business.

Planning to take a franchise? Well, before you move ahead with the thought, let us tell you that it is important to decide a number of things before planning to take up a franchise. While it is a tricky game altogether, but at the same time the prospects and challenges nurture you as a strategic businessman, who knows his game right! So, are you ready to be the player? Follow the below-mentioned points, before planning to open a franchise.

Determine the niche

When you decide to open a particular franchise, make sure that you pick the industry that has potential market. For example, opening a luxury brand franchise in tier-1 town will never make any profit. It is suggested to study the market and city specific and then move further. Any hospitality franchise is always workable in any city grade.

Completing the formalities

Once the niche is decided, make sure that you get yourself registered with the Ministry of Corporate Affairs after the initial agreement with the franchise provider. If the franchisee is from outside India, make sure to get in touch with international brokers such as Franchise International Inc.


Once the formalities are done, take over the ownership legally. It is suggested that while the legal procedure is on, it is important to have witnesses, in order to avoid any chaos in future.


Next and one of the most important steps in the process is completing the licensing formalities. From the concerned industry to the business licensing, you need all sorts of licensing done before you open the franchise in the public domain.


International businessmen looking to start a franchise in India will be better off without starting operations if they are unwilling to stay here or at least, visit it on a regular basis. 

Human resource requirements

Any franchise runs only through human resources, so it is important for you to understand the number of employees that will be required at various stages of operation. As an owner you also need to know the exact roles of the employees, so that you can conduct hiring accordingly.

Paying Taxes

While this comes at a later stage of the operation, but it is advisable to understand the different types of taxes that has to be paid in near future. From GST to custom tax, the range of taxation is wider, so it is important to understand the layers and prepare accordingly. During this stage, you can also explore the opportunities to save your taxes.

Managing currency risks

This is important for those dealing internationally. Their first investment is normally done in international currency while the initial earnings are in INR. So, it is important to understand the currency value difference before initiating the business. It helps in defining profit and loss.


This article is authored by Mr. Pankaj Kumar Singh, Managing Director, Jalsa ventures Pvt. Ltd. (Cambridge Montessori Pre-School)

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