Franchising entails one party allowing another to use its name, logo and system of business to generate sales and profits. One of the earliest Franchisers was the Singer Sewing Machine Company, which set up dealerships to sell and repair its machine throughout the US. Later, industry giants Coca Cola, Ford and Fast Food King McDonalds joined in.

Many company turn to the franchising system because they realize the potential for rapid expansion with minimal capital. They also are able to enlist topnotch partners if the company is willing to share the profits.

The company that sells licenses to operate its system is called the franchiser, while the companies or individuals who open the units with the help of the franchiser are called franchisees.

How it works.

The franchiser gives the franchisee the capacity and know-how so the latter can sell or give out services of the franchiser using its logos and publicity methods.

The concept works on a two ways benefits scheme. Take a example Skumars.com of the S.Kumars Group of Companies has taken the lead in introducing the concept of e-franchising to the Indian population via its Internet based company Skumars.com, which is in the process of setting up a network of cyber retail franchisees all over the country.

To accomplish this, the company needs substantial manpower. This is where people like Pranjit singh come in. Pranjit, who is educated but unemployed, say, 'In spite of my qualification, I have not able to get a suitable job. So, as soon as I heard of this e-franchise concept, I garbbed at it.' Not onlydoes a skumar get a person to market its products and services, but the franchisee also benefits, as he is able to run an independent business.

The Franchisee benefits from the success of the franchiser and is priviledged and protected by its in a specific geographical area previously agreed upon. The franchisee agrees to respect the commercial strategy of the franchiser, and to take part in the programs, and promotion that the franchiser wants to carry out.

E-franchise Model

Whether it's communication, shopping, banking or doing business, e-commerce looks all set to change our life completely. Skumars plan to take the benefit of this 'e' revolution to the common people.

Cyber outlets of Skumars will provide all kinds of e-commerce facilities. The goods available will include branded as well as second-hand goods. All transactions will be done through a secure payment and delivery mechanism. Additional services include classified and information on jobs, real estate, yellow pages, matrimonial, online education, computer training etc. Common Internet-based services like e-mail; video mail, voice mail and net browsing facilities will also be available. Moreover the franchisee can undertake stock and share broking. The company aims to include around 50,000 franchisees from over 1000 cities.

Anybody can be an e-franchisee irrespective of your existing work profile or status in society you can be housewife, shop owner, unemployed youth or a retired serviceman. All it takes is a working knowledge of English and an investment of Rs.2 lakh which goes into procuring equipment such as a computer with a 17-inch monitor, printer, scanner, web camera and a two-way VSAT (Very small aperture terminal) link. If you do not have the money, Skumars helps you out with loans through nationalized banks.

Space is not as big an issue as with regular brick and motor businesses. You need just 50 square feet of space to set up your business. Business e-shop does not need to be in the prime business district or have adequate frontage.

INTERNET KIOSK MODEL

The whole idea behind the concept of e franchising is to help the spread of the Internet to the masses. Today there are only 100,000 people connected to the Internet in 100 cities across India. Considering India's population of one billion, this is an insignificant number. Skumars intends to boost Internet penetration in the country by setting up 50,000 Internet kiosks in 1,000 cities and towns.

Another player in the field is jaldi.com, which is taking the Internet to the people by setting up Internet kiosks. The company pants to set up 300 Internet kiosks across 20 cities over the next three months, to reach those consumers who currently do not have access to a PC or an Internet connection, thus enabling them to shop for product and services at Jaldi.com. Any consumer can visit and browse Jaldi's web site through these kiosks.

Skumars.com and Jaldi.com might be the pioneers, but they are definitely not going to be alone for long. Major upcoming players like the Times of India and CyberITmall are getting ready to launch their services. The day is not far off when such kiosks will dot our landscape like the omnipresent public call offices (PCO), and you will order fresh vegetables and book airline tickets from the kiosk round the corner.