All You Need to Know About Franchise Business

Taking up a franchise is a strategic way forward for entrepreneurs. By getting on board with a popular brand, the need for additional marketing and visibility is considerably reduced. Moreover, the parent company lays a well-constructed route before you that makes it easy to carry out daily operations without any interruptions. The initial costs can be covered with a business loan, and all other aspects carry on smoothly thereafter. If you are thinking about starting a franchise business, here’s what you should know:

What is a franchise business?

A franchise business is a business model in which the owner of the company allows a third-party to use the brand’s name to run a business and sell its goods or services for a pre-decided duration at a pre-determined cost.

How can you take up a franchise?

The rules for each brand can differ depending on its business model, sector, area of expertise, etc. Therefore, the exact steps can only be obtained from the company in concern. However, the following business loan documents are generally required by most companies:

  • A duly filled franchise application form that can be obtained from the company’s website
  • Your resume with a list of your professional experiences and educational qualifications
  • A map and photographs of the business site
  • A letter of intent (LOI) that specifies the reason you wish to apply for the franchise
  • Valid government ID proofs and bank statements
  • A lease agreement if you are renting the site of the business
  • A taxpayer’s identification number (TIN)

If your application is approved and your submitted documents are in place, you will be required to meet with the franchisor. This meeting will focus on the franchisor’s policies, core values, costs, inclusions, exclusions, etc. Most franchisors also conduct training sessions for new franchisees as part of the enrolment procedure.

How can you cover the costs of a franchise?

A franchise is like any other business. You can consider taking a business loan online. This can be used to cover the costs of leasing or purchasing the site as well as other expenses. Banks and other lenders look for reliable business models while sanctioning loans. Since franchises are based on successful brands, business loan approval is usually a smooth and hassle-free process.

Who runs the franchise?

The ownership and authority over the franchise will depend on its type. Broadly, there are two kinds of franchises – manager-run franchises and owner-run franchises. Both can have a different set of duties and responsibilities. It is advisable to discuss this in your meeting with the franchisor so you can understand the advantages and disadvantages of both.


A franchise offers a brilliant opportunity to entrepreneurs. It eases the process of setting up your business to a great extent and provides many comprehensive and lucrative incentives. If you are thinking of purchasing a franchise, you can do so with a quick business loan from Tata Capital. With a loan amount of up to Rs 75 lakh, you can set up your business in no time.