What is Private Franchising
Today am going to talk about different types of income we make. The only thing common between the two types of incomes is our time.
Active Income: This income is directly proportional to the time we give. The more time we give the more we can earn (theoretically) and if we are unable to give any time then our income becomes zero. Ex: Our very good Job, Self Employed people (like professionals – Doctors, Lawyers etc)
Passive Income: This income is not directly proportional to the time we put in. Please do not misunderstand that we will earn sitting at home. This means that we have to put in our time and effort only once and we can reap the benefits for a long time to come.
So even if we are unable to work or give our time this income will keep on coming. Ex: Stocks, Real Estate (Rent) Interests on investments.
The flip side of passive income is that you need to invest a lot of money to actually make a substantial amount. For rent also you need to buy a house (at least 40 lac investment, please do not count it as passive income if your home loan EMI is greater than the rent coming in) For stocks also the traditional returns are around 12-15% a little on the conservative side. So to make 10,000 you will have to invest 1,00,000. But both these instruments have their own risk factors depending upon market conditions.
Please take a not of the fact that in the past 10 years we have seen two recessions and people whoa re just starting their careers will definitely see more. I want you to ask yourself one simple question: If you lose your job are you well equipped to take care of your family for at least 6 months? If your answer is yes then congratulations you are wealthy and your wealth amount to 6 months. But if your answer is no then don’t you think you have to do something not for you at least for your family.
This is where passive income helps us to save for the rainy day and also fulfill our desires.
Now the question comes how to make passive incomes without investing huge sum of money?
I am going to share with you one way of generating this kind of income.
Private Franchising
Hope everybody understands the word franchising (atleast all b school grads shud. If they don’t pls go back to school ) For ppl who don’t understand here is a brief about it: Franchising is the most successful business model in the world currently. Every major business in the world currently runs on franchising. McD, Starbucks, CCD, Bata, Apollo Hospitals, DPS. The list too huge to be discussed here.
Franchisee – He is the person who invests his money and effort to build a huge business.
Company – It will teach the franchisee how to run the business, systems and also give its brand to him. In return the company will take a small percentage of the profit once the franchise reaches a particular profit level.
For ex: If I am a McD franchisee then I will invest my time and will be taught by McD people to run the business. After reaching (for ex 1 lac /month profit) I will start sharing the small percentage (mostly ranging from 3-5%) with the company.
How this model is beneficial to both
1) No capital from the company.
2) No market research and hard work from the franchisee. He just has to learn a successful business.
3) No management issues as I will own the business so no chance of attrition.
4) The company can teach as many people they want and create a huge franchise and earn a royalty income (passive income)
Ray Croc and his wife are already dead but their family still earns royalty income from the 30,000 McD outlets all over the world. Just think even they make 100 rs a day it would amount to Rs 3o lac/ day. This, friends is the power of franchising.
How we can make this model work for us. I am assuming that we don’t have 3 Crore (franchising fees for McD as of now) in our bank accounts.
A modified version of Franchising is called private franchising. In this model individuals (person A) who run a business are empowered to franchise it another person ( B) at a nominal fee. Here A would be responsible to train and teach B till he is capable of standing up on his own. Once B reaches a particular income level, the royalty income for A starts in the form of a small percentage of his income for the time to come. (3-5 %).
The difference between normal franchising and private starts now – B is also free to franchise his business at the same fee as A had did. Then it would be B’s responsibility to teach and coach the third person. In this way an organization is created which would generate passive income for you in the future. This business model is also known network marketing. I know people do who their qualms about network marketing and they are right in their places. The only thing which I would recommend is to know atleast know everything about the companies who are working in this area so as to take an informed decision.
It is as simple as this If you want to buy a bike whom will you ask? From A friend who does not own that bike or a friend who has that bike. When we make informed decisions in this matter why we cannot take correct decisions which can change our lives completely?
I would like to give on more similarity. The people who say that network marketing is bad should always look at their organization structures and then compare it to a network marketing organization.
Think about generating passive income & start working towards a brighter future and take informed decisions in the time to come. I have just given one way of generating passive income. Please do share if you come across any other simple methods for a secured future.
Next: How to select a Network marketing company?
Active Income: This income is directly proportional to the time we give. The more time we give the more we can earn (theoretically) and if we are unable to give any time then our income becomes zero. Ex: Our very good Job, Self Employed people (like professionals – Doctors, Lawyers etc)
Passive Income: This income is not directly proportional to the time we put in. Please do not misunderstand that we will earn sitting at home. This means that we have to put in our time and effort only once and we can reap the benefits for a long time to come.
So even if we are unable to work or give our time this income will keep on coming. Ex: Stocks, Real Estate (Rent) Interests on investments.
The flip side of passive income is that you need to invest a lot of money to actually make a substantial amount. For rent also you need to buy a house (at least 40 lac investment, please do not count it as passive income if your home loan EMI is greater than the rent coming in) For stocks also the traditional returns are around 12-15% a little on the conservative side. So to make 10,000 you will have to invest 1,00,000. But both these instruments have their own risk factors depending upon market conditions.
Please take a not of the fact that in the past 10 years we have seen two recessions and people whoa re just starting their careers will definitely see more. I want you to ask yourself one simple question: If you lose your job are you well equipped to take care of your family for at least 6 months? If your answer is yes then congratulations you are wealthy and your wealth amount to 6 months. But if your answer is no then don’t you think you have to do something not for you at least for your family.
This is where passive income helps us to save for the rainy day and also fulfill our desires.
Now the question comes how to make passive incomes without investing huge sum of money?
I am going to share with you one way of generating this kind of income.
Private Franchising
Hope everybody understands the word franchising (atleast all b school grads shud. If they don’t pls go back to school ) For ppl who don’t understand here is a brief about it: Franchising is the most successful business model in the world currently. Every major business in the world currently runs on franchising. McD, Starbucks, CCD, Bata, Apollo Hospitals, DPS. The list too huge to be discussed here.
Franchisee – He is the person who invests his money and effort to build a huge business.
Company – It will teach the franchisee how to run the business, systems and also give its brand to him. In return the company will take a small percentage of the profit once the franchise reaches a particular profit level.
For ex: If I am a McD franchisee then I will invest my time and will be taught by McD people to run the business. After reaching (for ex 1 lac /month profit) I will start sharing the small percentage (mostly ranging from 3-5%) with the company.
How this model is beneficial to both
1) No capital from the company.
2) No market research and hard work from the franchisee. He just has to learn a successful business.
3) No management issues as I will own the business so no chance of attrition.
4) The company can teach as many people they want and create a huge franchise and earn a royalty income (passive income)
Ray Croc and his wife are already dead but their family still earns royalty income from the 30,000 McD outlets all over the world. Just think even they make 100 rs a day it would amount to Rs 3o lac/ day. This, friends is the power of franchising.
How we can make this model work for us. I am assuming that we don’t have 3 Crore (franchising fees for McD as of now) in our bank accounts.
A modified version of Franchising is called private franchising. In this model individuals (person A) who run a business are empowered to franchise it another person ( B) at a nominal fee. Here A would be responsible to train and teach B till he is capable of standing up on his own. Once B reaches a particular income level, the royalty income for A starts in the form of a small percentage of his income for the time to come. (3-5 %).
The difference between normal franchising and private starts now – B is also free to franchise his business at the same fee as A had did. Then it would be B’s responsibility to teach and coach the third person. In this way an organization is created which would generate passive income for you in the future. This business model is also known network marketing. I know people do who their qualms about network marketing and they are right in their places. The only thing which I would recommend is to know atleast know everything about the companies who are working in this area so as to take an informed decision.
It is as simple as this If you want to buy a bike whom will you ask? From A friend who does not own that bike or a friend who has that bike. When we make informed decisions in this matter why we cannot take correct decisions which can change our lives completely?
I would like to give on more similarity. The people who say that network marketing is bad should always look at their organization structures and then compare it to a network marketing organization.
Think about generating passive income & start working towards a brighter future and take informed decisions in the time to come. I have just given one way of generating passive income. Please do share if you come across any other simple methods for a secured future.
Next: How to select a Network marketing company?
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