Franchising of goods and services, foreign to India, is in its infancy. The first International Exhibition was only held in 2009.. India is, however, one of the biggest franchising markets because of its large middle-class of 300 million who are not reticent on spending and because the population is entrepreneurial in character. In a highly diversified society McDonalds is a success story despite its fare differing from the rest of the world.Thus far, a franchise agreement is a contract between the franchisor and the franchisee governed by the Contract Act 1872 and the Specific Relief Act, 1963 which provides for both specific enforcement of covenants in a contract and remedies in the form of damages for breach of contract.
Things to be taken care of by new franchisors[/b]
Being undercapitalized
Overextending yourself geographically
Registering a state (but not federal) trademark
Jumping the gun in registration states
Granting a franchise to any prospect who fogs a mirror
Not knowing enough about the product
Not talking to other franchise owners.
Underestimating the costs
Failure to read the franchise agreement carefully.
Failure to have adequate legal counsel on hand
Not getting everything in writing
Not assessing the competition carefully.
Underestimating the time commitment.
Lack of marketing
Making inappropriate acquisitions
Going international too early
Expanding too quickly
Setting the franchise fee too low
Failing to take proper care of relationships with franchisees
Failing to consult adequately before launching a new initiative
Co-branding inappropriately