Post Office Franchise Business

The primary objective of India Post is to increase the access to basic postal services to the unreached throughout the country. India manages the leading postal network worldwide with a total number of 1,54,965 post offices across the nation, as on 31^st March 2017*. Rural India consists of 1,39,067 post offices and its demand is ever increasing due to India’s large population residing in the rural areas. The Department of Posts launched the India Post Franchise Scheme to offer enhanced postal services to people living in rural and urban India.

To start a post office franchise business is a viable money making venture, especially for people living in rural areas. Through post office franchise scheme, franchisees shall provide counter postal services with defined time schedule in areas where post offices cannot be opened.

Eligibility Criteria to start Post Office Franchise Business

• Minimum age of the applicant should be 18 years with no upper age limit
• Private limited and public limited companies, individuals, self-employed, institutions and other entities can apply for post office franchise business
• Education qualifications of applicant: Must be at least 8^th pass
• Business plan with all necessary details
• Minimum revenue amount to be considered by Divisional Head for the specific franchise
• As an individual, applicant needs to sign an agreement
• Average investment of Rs. 1 lakh to Rs. 1.5 lakh for infrastructure establishments
• Minimum revenue generation of Rs. 50,000 that shall be reviewed on every biannual basis
• Minimum security deposit is of Rs. 5,000 that should be deposited in the form of National Savings Certificate (NSC)

How to Apply for Post Office Franchise Business

Below mentioned are the steps to apply for the Post Office Franchise Business:

Step 1: To apply for a franchisee, applicants need to submit an application form in defined format along with a business plan describing activities to be undertaken in the franchise outlet.

Step 2: Application form can be obtained from the post office and needs to be submitted along with copies of detailed proposals that shall include operations of franchise outlets. Application form can also be downloaded from official website of the Department of Posts, Government of India.

Step 3: After form submission, the selected franchise shall sign a Memorandum of Agreement (MoA) with the department.

Step 4: Final selection for post office franchise scheme shall be made by the respective Divisional Head, within 14 days from the date of form submission.

Features of Post Office Franchise

• Franchisee holder can sell stamps and stationery from the outlet
• Franchise will not book money order below the value of Rs. 100
• Used for sending money orders, speed post articles and for booking registered articles
• Franchisee owner can function as an agent for Postal Life Insurance (PLI) and perform related retail activities
• Any additional service introduced by the Department of Post

Commission to Franchisee Holders

Applicant can start earning commission from the department, as per the sales of products and services provided at the outlet. The remuneration that can be earned is mentioned below:

• 2 per registered post and speed post article booked and Rs. 3.5 per money order booked
• 5% commission on the sale of money order forms and postal stamps
• On the booking of 1000 or more speed post, 20% extra commission

Components of Application Form

• Name of the Applicant
• Nationality
• Age (Min. 18 years with attached proof)
• Whether DoP Pensioners, yes or no
• Income Tax PAN / GIR number
• Present and Permanent Address
• Business Location
• Proposes Timings of Business
• Details of Premises (Owned, Rented & Leased)
• Present Business / Occupation
• Previous experience in retail
• Details of at least 2 references with addresses
• Business plan, if enclosed

To start a post office franchise business, required capital investment is not much as compared to other small scale businesses. It is always recommended not to invest all of the savings in the Startup business because savings are meant for instant cash requirements, financial urgencies and sometimes for debt consolidations. If needed, some portion of savings can be utilized during the business tenure, but not in the initial stages of the business.

Therefore, the finest alternate to start a post office franchise outlet is by taking business loans, term loans or working capital loans from various financial institutions like banks, Non-Banking Financial Companies (NBFCs), Micro Finance Institutions (MFIs), Small Finance Banks (SFBs), Regional Rural Banks (RRBs), etc. The business loan interest rate varies from bank to bank and depends on various factors like loan amount, repayment tenure, applicant’s profile, credit score, business requirements, creditworthiness and financial capacity. Applicants can visit paisabazaar.com to check and compare from the best available deals offered by several lenders.

*Department of Posts Ministry of Communications Government of India