Franchising has become one of the most popular business models in India. In fact most of us have at some point looked into pizza hut or burger king franchise cost in India. There are many reasons for the popularity of the franchising business model. It provides a unique opportunity for entrepreneurs to start their own businesses while leveraging an established brand’s name and expertise. However, not all franchises are created equal! There are different franchise business model types that can impact profitability, investment level, and overall success. In this blog post, we’ll dive into the four main franchise business models in India: Company Owned Company Operated (COCO), Company Owned Franchise Operated (COFO), Franchise Owned Company Operated (FOCO), and Franchise Owned Franchise Operated (FOFO). So whether you’re looking to invest in a franchise or just curious about the different business models out there, keep reading to learn more!
Company Owned Company Operated (COCO)
The Company Owned Company Operated (COCO) model is a franchise business model where the franchisor owns and operates all of its outlets. The franchisee has no involvement in the day-to-day operations of the business but simply invests in it by buying a share in the company.
This type of model is typically seen with large corporations that have deep pockets and want to maintain complete control over their brand’s image and operations. COCO franchises are often found in industries such as fast food, retail, and hospitality.
One advantage for franchisors using this model is that they have complete control over how their brand is perceived by consumers. They can ensure consistency across all locations, which helps create a strong reputation for their brand.
However, one downside for potential investors looking at COCO franchises is that there may be limited opportunities available due to the fact that franchisors own and operate all locations themselves. Additionally, because these types of franchises require significant investment from the parent company, there may be higher fees associated with investing in them compared to other models.
Company Owned Franchise Operated (COFO)
Company Owned Franchise Operated (COFO) is a business model in which the franchisor owns and operates some of its own locations while also granting franchises to independent owners who operate additional locations. This approach combines the benefits of both company-owned and franchise models.
In this type of arrangement, the franchisor maintains maximum control over its brand by retaining ownership of some locations. At the same time, they expand their reach by allowing franchisees to operate under their brand name and established systems.
This type of partnership can be beneficial for both parties since it allows franchisees access to an established business with a proven track record while offering the parent company a chance to maintain quality control standards throughout all branches.
COFO is just one example of how businesses are constantly evolving new methods for expansion and growth. As companies continue to explore different models, we’re likely to see even more creative solutions emerge in the marketplace for years to come.
Franchise Owned Company Operated (FOCO)
Franchise Owned Company Operated (FOCO) is a business model wherein the franchisor grants the franchisee the right to use their brand name, products, and services while operating the store or outlet owned by the franchisor. In this type of franchise model, the franchisee does not own any property but only operates under a company-owned unit. For instance the wow momo franchise could be seen as an example of this type of franchise.
The FOCO model provides several advantages to both franchisors and franchisees. Firstly, it allows for better control over operations as all aspects are managed by professionals appointed by the franchisor. Secondly, it helps in maintaining consistency across multiple outlets as every unit follows a standard operational procedure.
Additionally, FOCO also allows for reduced investment costs as compared to owning an independent business. This is because most of the capital expenditures such as store construction and equipment installation are borne by the franchisor.
However, there are some limitations associated with this model too. Since ownership lies solely with the franchisor, there may be limited opportunities for customization or the introduction of new ideas from individual franchisees.
Franchise Owned Company Operated (FOCO) can provide an excellent opportunity for aspiring entrepreneurs looking to invest in a well-established brand without bearing high initial costs or risks associated with setting up an independent venture.
Franchise Owned Franchise Operated (FOFO)
In the FOFO model, the franchise investor pays a non-refundable fee to use the company’s brand name for a set period. The brand sets the prices and menu items for the store, and the franchise investor is responsible for all operational expenses as the store owner.