PCD PHARMA FRANCHISE BUSINESS FAQS
A pharma franchise business model is when a company permits to sell the products by its name.
It is an agreement between a franchiser which is typically a pharma manufacturing (or marketing) company where a franchisee is an individual entrepreneur or a small company that buys the license.
If you are a budding entrepreneur who wants to start a business venture, then read the questions frequently asked about this business model.
Q1. Why is it a great idea to launch a pharma franchise?
You are the whole and sole owner of your business. The profit margins are higher, and the growth opportunity better.
The more you put into the business, the more you get.
It gives independence. You are the decision-making person in your business.
Q2. Are there any sales targets?
Yes, targets are there, but they depend on the area you are operating into. The targets could be monthly or yearly it depends on the company policy.
Q3. What are the documents required?
The following are the mandatory documents to get a pharma franchise.
- Drug license copy (wholesaler/retailer)
- GST copy issued by govt.
- Transport Road Permit (if applicable)
Q4. Who owns the responsibility of product marketing?
Selling and marketing the products are managed by the franchise. The pharma company provides promotional material and marketing support. It depends on the contract agreement.
Similarly, the responsibility of marketing and distribution also lies with the franchise. Pharma company sends a medical representative to train the staff.
Q5. How much money is required to setup a franchise model? Does it need space for warehouse or depot?
The money you need to launch the franchise business depends on factors like the number of products to be marketed, product types, batch size, molecules, and so on.
Typically, a small franchise can be started with an amount of 50K rupees. The majority of it is spent on buying products and promotional material.
As such, it is not mandatory to have a shop, warehouse, or depot. It depends on the terms and conditions imposed by the pharma company.
Q6. How much is the tax load?
There is a provision of 12% or 18% GST on the invoice amount as per the current slab. It is subject to change. You have to keep updated with the latest tax rates.
Q7. How to calculate the net price, MRP, or Trade Rate?
You need to be careful while fixing net price, trade rates, and MRP because they affect your business profitability.
Ask a consultant if you do not have adequate resources to do it.
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