Written By: Bandana Gupta

Overview of FOCO Model : In the FOCO Model (Franchise Owned, Company Operated), the franchisee holds ownership of the business, while the parent company takes charge of daily operations. This includes crucial tasks like hiring and training staff, managing inventory, and providing excellent customer service. In return, the franchisor compensates the business, ensuring a mutually beneficial partnership.

This model also fosters collaboration, with the franchisor offering guidance and mentorship to the franchisee. Both parties stand to gain significantly: the franchisor expands their reach to a broader audience, while the franchisee capitalizes on the credibility and reputation of an established brand. Together, they create a streamlined and profitable business ecosystem.

Advantages of the FOCO Model

• Eased Operational Responsibilities: Franchisees enjoy relief from the challenges of daily operations, thanks to the franchisor’s proficiency in managing the business’s day-to-day activities.
• Uniform Quality Standards: By overseeing operations, the franchisor ensures consistent service quality and operational standards, which helps strengthen the overall reputation of the brand.
• Investment-Centric Approach: Franchisees can dedicate their energy to maximizing their return on investment, leaving the intricacies of management to the franchisor.
• Efficient Growth Potential: This model allows for swift business expansion. With the franchisor handling operations, they can utilize their robust systems and established processes to scale effortlessly.

Best FOCO Franchise Opportunities in India under 50 lakhs.

The Rolling Plate:

The Rolling Plate offers a FOCO (Franchise Owned, Company Operated) model for just ₹2.9 lakh, enabling entrepreneurs to run online restaurants without overheads. Launched in 2019, it combines cloud kitchens, IT, and India’s rich culinary heritage to deliver maximum profits and nationwide reach.

ClearDekho: 

ClearDekho, India’s top affordable eyewear brand since 2017, focuses on providing high-quality eyewear for ₹1000-2000. It runs on a FOCO model where franchisees invest but avoid operational involvement.

Key benefits:

• Zero-risk investment with a buy-back option.
• Inventory-light model and high margins.
• Marketing, staffing, and location finalized by ClearDekho.
• This investor-friendly model thrives in an eyewear market growing at 30% CAGR.

Kalyan Jewellers:

Kalyan Jewellers has adopted the FOCO model, where franchisees fund store setup while the company handles operations like staffing, management, and inventory.

• Asset-Light Growth: Facilitates faster, capital-efficient expansion without heavy investment in physical assets.
• Rapid Scale-Up: Franchise operations, launched in June 2021, are driving rapid store network growth under this model.
• Improved Capital Efficiency: Reduces working capital needs and enhances debt management.
• Non-South Market Focus: Prioritizing expansion into non-South regions via the FOCO model.

 Frozen Bottle: 

Frozen Bottle, a pioneer in India's FOCO model food franchises, owes its success to innovative marketing and branding, creating a strong customer connection. With an investment of ₹20-25 lakhs and ROI in 12-14 months, it’s one of India’s fastest-growing cafes.

McDonald's:

McDonald’s has built a thriving franchise business model where its outlets are managed either directly by the company or through franchisees. This includes traditional franchise agreements, developmental licenses, and partnerships in foreign affiliate markets. A well-known example of the FOCO model in the food and beverage industry. The Investment required is 25-30 lakhs.

How to start a FOCO franchise in India:

• Research Thoroughly: Start by exploring various brands offering FOCO model franchise opportunities. Look into their business history, reputation, and overall profitability to identify options that align with your goals.
• Evaluate Your Investment Capacity: Understand how much capital you can allocate to a franchise. This includes considering upfront costs, operational fees, and any additional resources you might need.
• Connect with Franchisors: Reach out directly to franchisors to gather detailed insights into their FOCO model offerings. Ask questions about their operational support, revenue-sharing arrangements, and long-term business potential.
• Examine the Franchise Agreement Carefully: Review the contract thoroughly to ensure you’re clear on all terms and conditions, such as profit-sharing, responsibilities, and duration of the agreement. Consider consulting a legal or financial expert for additional clarity.

Taking these steps ensures an informed and strategic approach to entering a FOCO franchise venture.

OVERVIEW ON FOFO MODEL:

In the FOFO (Franchisee Owned, Franchise Operated) model, franchisees own and operate the franchise units, taking full responsibility for operations, while the franchisor provides brand support and guidelines. Hence, The FOFO model is widely used, particularly in sectors like fast food restaurants and gyms.

Benefits of FOFO Model:

• Active Ownership: Franchisees in the FOFO (Franchise Owned, Franchise Operated) model are directly involved in running their businesses. This hands-on approach instills a strong sense of ownership, driving them to work harder and stay motivated to achieve success.
• Localized Customization: Franchisees have the flexibility to adapt their operations to suit the preferences and demands of their local market. By aligning with local tastes and cultural nuances, they can enhance customer satisfaction and boost profitability.
• Accelerated Brand Growth: The FOFO model allows brands to expand rapidly by partnering with ambitious local entrepreneurs. By leveraging the resources and networks of these entrepreneurs, businesses can establish a stronger and broader presence in diverse regions without bearing the full operational burden themselves.

This synergy between franchisees and franchisors not only accelerates growth but also fosters a mutually beneficial relationship that prioritizes success at all levels.

Top FOFO Franchise Opportunities in India under 50 lakhs.

Lenskart:

Lenskart, India’s leading eyewear brand, offers franchise opportunities with an investment of ₹25-30 lakhs. Known for revolutionizing the industry, it provides franchisees with branding, recruitment, and training support, aiming to make affordable vision accessible to all.

Baskin-Robbins:

Baskin-Robbins, a globally renowned ice cream brand, stands out with its wide range of flavours and seasonal treats, appealing to both kids and adults alike. With a franchise investment starting at ₹25 lakhs, it offers a lucrative opportunity, fueled by the rising demand for premium ice creams and strong potential for high returns.

  Grocery 4U:

Grocery 4 U, an online platform for all consumer needs, excels in quality sourcing through a strong supply chain. It offers promising franchise opportunities with full support for outlet setup and business strategy training, fostering healthy and happy communities. It is FOFO business model with 21.25 lacs investment.

VLCC Beauty Salon:

The franchise fee for this model is set at ₹15 lakh, with a royalty fee of 15% of the monthly turnover, whichever amount is higher.

To set up, you’ll need a carpet area of 1,800-2,200 sq. ft., along with an investment of ₹18-20 lakh for equipment and ₹29-32 lakh for fixtures and interiors.

Pepperfry:

In 2012, Ambareesh Murty and Ashish Shah launched Pepperfry, India's top platform for furniture and home goods. Over a decade, it has reshaped retail with its online catalogue, robust supply chain, and a wide omnichannel presence in 100 plus cities.

Pepperfry, India's leading online furniture brand, offers a FOFO model with a low investment of 15 - 30 lakhs and high returns. 

Tumbledry:

Tumbledry, launched in 2019, aims to tackle the laundry challenges faced by urban Indians. Recognized as a top franchise opportunity, it offers live laundry stores that deliver world-class services within every 3 km in urban areas.

This franchise model suits metros, as well as tier 1, 2, and 3 cities. To set up, an investment of ₹25 lakh is required, along with 700-1200 sq. ft. of space.

Steps to Evaluate a Franchise Opportunity:

1. Research: Investigate the franchisor’s reputation, support system, and success rate. Check reviews from existing franchisees.
2. Investment: Match your budget with the required investment and expected ROI.
3. Location: Select a spot that fits your target audience and business goals.
4. Operational Support: Assess the franchisor’s assistance with staffing, training, and operations.
5. Marketing Support: Ensure strong branding and promotional help to attract customers.

Careful consideration of these factors can lead to a successful franchise venture.

Know about choosing the Right Model: FOFO vs. FOCO

When deciding between FOFO (Franchise Owned, Franchise Operated) and FOCO (Franchise Owned, Company Operated), several factors come into play, including your circumstances, risk tolerance, and the level of involvement you desire.

Level of Involvement:

• FOFO: Best for those with strong management skills, financial knowledge, marketing expertise, and operational experience, as it demands active involvement.
• FOCO: Ideal for individuals with limited experience or those preferring less hands-on involvement, as the company manages day-to-day operations.

Aligning with Business Goals:

• Think about your short-term and long-term goals. For example:
• In the next 1-2 years, the focus could be on increasing sales or growing the customer base.

Over the next 5-10 years, you may aim to create a regional presence or sell the franchise for profit.

• Also, consider the time you can dedicate. FOFO requires significant involvement, while FOCO offers more flexibility.

 Impact on Long-Term Success

• FOFO: Higher risk as you handle ownership and financial responsibilities, but the potential for   higher rewards through direct profits.
• FOCO: Lower risk since the company manages operations, though profits may be shared.

 Choosing the right model depends on your goals, expertise, and how involved you want to be. It’s important to evaluate these factors carefully to make the best decision for your business.

Conclusion:

Both FOCO and FOFO models are great options for franchise expansion. Franchisors can select the right model by assessing their needs, available resources, and business goals to ensure sustainable growth and long-term success.

Find the perfect fit for your expectations and take the first step with Franchisebazar.com!!

Disclaimer: The brands mentioned in this blog are the recommendations provided by the author. FranchiseBAZAR does not claim to work with these brands / represent them / or are associated with them in any manner. Investors and prospective franchisees are to do their own due diligence before investing in any franchise business at their own risk and discretion. FranchiseBAZAR or its Directors disclaim any liability or risks arising out of any transactions that may take place due to the information provided in this blog.