Franchising: The ‘mantra’ for successful business

Franchising has grown by leaps 

and 

bounds over the last couple of years in India 

and 

is now seen as one of the best ways to expand businesses

Franchising is one of the three business strategies that a company may use to capture market share. Franchising is a business strategy that is put into practice for attracting and retaining customers. It is a marketing system for creating an image in the minds of the current and future customers about how the company's products and services can help them. It is a method for distributing products and services that satisfy customer needs. Gaurav Marya, chairman, Franchise India Group, says that "Franchising can be seen from two perspectives - the features and benefits associated with them. From a company view point, franchising is a great form of capital generation and a good means to grow your brand. Younger companies, especially in the retail segment, can continue to grow their brand if they properly utilise franchising."

An important aspect which determines the feasibility of any franchising business in a country, relates to the class of consumers it caters to. India is a multiethnic country with the second largest population in the world. Throwing light on this aspect, the franchising industry in India is close to 23-24 billion dollars and according to KPMG India estimates, it is expected to grow four times, between 2012 and 2017. There is scope for the franchising industry to contribute almost 4 per cent of India's GDP in 2017, growing from a current estimated contribution of 1.4 per cent of the GDP. Marya shares that practically, all the sectors, are turning towards implementing the franchising model. "Every single industry, whether it is consumer goods and services, healthcare, retail, education, is looking for franchising and successfully implementing the models into their businesses." The services sector, financial services, courier services, health and wellness and food sectors, is expected to contribute to majority of the growth in franchising in the next half a decade. One of the major positives that has further provided an impetus to franchising in India is allowing Foreign Direct Investment (FDI) in single brand and multi-brand retail.

While the franchise industry is poised to grow over the next couple of years, is there a trend that has been observed wherein, players are largely opting to take on franchising, in order to spread their foot prints? Sanjay Shetty, head of operations, Prince Cuisines, Cream Centre, agrees and says, "Yes, franchising is a great opportunity, if one wishes to expand their business. A single business could take years to establish itself in a city, whereas, if one adopts the franchising model, the business can grow by leaps and bounds, across major metros and tier-II cities and sometimes, even overseas."

Echoing a similar thought, Raghvendra Naidu, owner, Exotic Flavours shares, "There are a lot of positives associated with franchising. To begin with, when starting a franchise, your investment

is taken care of as you know that you are going to implement a tried and tested model, the operational background is in place and is something that has been running for a while. Besides, from an organisational point of view, it is a relief that you are getting associated with a brand and additionally, collaborating with an existing brand saves a lot of time in marketing yourself in the open market, which you would have to do, had you been a single player." 

SWOT ANALYSIS 

Strengths - Capital generation, employment generation

Weakness - Inability to develop and implement successful franchise models

Opportunities - The influx of big brands into Indian soil

Threats - Lack of education and the competition from other countries

FRANCHISING HAS A BRIGHT FUTURE IN INDIA

• ·         The average Indian income is steadily rising and individuals have more purchasing power today.

• ·         Increasing levels of consumer spending, with greater recognition of brand value has given a push to franchising in India.

• ·         Large penetration of the online medium in India is making its population more aware of global trends and brands.

• ·         The internet is also making it easier for international companies to gain an understanding of India's; culture, geography and politics and accordingly rework their models to suit the Indian taste and preferences. 

Source : TOI 

Looking for Franchising Options. Call the Experts -  Franchise India @ Tollfree: 1800 102 2007

RS & Co. aligns with Franchise India for Expansion

Moving ahead with ambitious plans, RS & Co. , a division of COOL ‘N’ COOL is expanding its presence through Franchise India across India.

COOL 'N' COOL was established 15 years ago with an aim to cater to the white good needs of the consumers. RS & Co. a division of COOL 'N' COOL over the last few years has built a reputation for selling Air Conditioners and Home Appliances for more than a decade. We deal with multiple brands like Sony, Carrier, Phillips, Hitachi, LG, Onida, Samsung, Voltas etc. Our qualified and experienced team of engineers install the electronic goods to the exact standards of workmanship.

The spurt in the mall and organized retail culture has been one of the biggest contributing factors in the growth of the retail sector. This market is set to grow at a CAGR of close to 22% from 1998 to 2012 and from 2012 to 2023 at 7%. The Indian retail sector is one of the fastest growing markets in the world due to the domestic economic growth. The market is slated to reach $866 Billion by 2015 from the current 516 Billion.

                

Some of the factors contributing to this growth are the rising incomes and demand in branded products. Consumer Expenditure is estimated to be $ 3.6 Trillion by 2025 against 1 Trillion in 2010.

The investor needs to have an area of 1000 Sq. Ft., total investment of 52-55 Lakhs to start the brands franchised centre. The payback period is just of 2 Years and 6 Months.

The brand will support franchisees with training, recruitment , research & development , advertising & promotions , inventory management  and  marketing support .

Mr. Radhakrishnan, CEO, RS & Co. said, “We have always been committed to quality and remain focused on customer's individual requirement. Catering to a diverse clientele, our products are very competitively priced therefore suiting every pocket. Our professionalism is what sets us apart, with this attitude we enter into franchising and invite enthusiastic individuals to join us.”

Adding to this Mr. Gaurav Marya, Chairman, Franchise India said, “Franchise India’s earnest endeavour is to provide a strong and efficient platform to entrepreneurs to expand their business through us and gain as much as possible out of their expanding operations and management. And we are excited to have partnered with RS & Co. for their growth story.”

Franchise India to launch innovative online business platform for facilitating mid-market Business Sale-Purchase deals

Franchise India Brands Pvt. Ltd, a pioneer in the franchising industry, will be launching a new and innovative online business platform for facilitating mid-market Business Sale-Purchase deals. This portal will be a major initiative by the firm to create a seamless and symbiotic online universe for business buyers, sellers and brokers to carry out business deals.

One of the most coveted services provided by the firm is business evaluation, depending upon the assets, liabilities, total income and growth. This provides a comprehensive idea about how profitable is the business, what kind of potential it holds and the future prospects. The portal will facilitate comprehensive services for buying and selling businesses, evaluation and analysis of profitability as well as growth prospects which any respective business can offer.

Commenting on the launch of this new flagship business, Mr Gaurva Marya, Chairman, Franchise India said, “It is difficult to assess the market size of merger acquisition of MSME (micro, small & medium) business units. The online platform will be a revolution. There is ample scope for growth of franchise business in tier-II and III cities.”

According to KPMG India estimates, the franchising industry is expected to quadruple between 2012 and 2017. KPMG in its report has said that there is scope for franchising industry to contribute almost four per cent to the country’s GDP (gross domestic product) in 2017 (assuming six per cent year-on-year GDP growth between 2012 and 2017), growing from a current estimated contribution of 1.4 percent of GDP. Franchise industry is expected to create job opportunities (including both direct and indirect) for an additional 11 million people by 2017.

Pioneers of Franchise Industry in India, Franchise India eyes on Coastal AP Market for growth

Franchise India, Asia’s largest integrated franchise solution company strengthens its base in Andhra Pradesh and forays into Vishakhapatnam.  Offers Business Brokerage, Business Consulting, Valuation Services, Mergers and Acquisitions, Captial services, Real Estate services, Legal Services. Its other premium services include Feasibility, Identification of Business Prospects and Deal Closure etc.

Announcing this in a press note issued in city today, Mr. Sonya Chowdhry, Director, Franchise India Brands Ltd. Said, “The purpose behind creating thi new base is to offer maximum business opportunities to the investors.

With this expansion we will create an awareness regarding all the new offerings and services that will help businesses grow and expand.”

Franchise India is Asia’s largest integrated franchise solution company since 1999, with an absolute authority on Franchising, Licensing, Retailing, Real estate and Marketing. The company has consulted several major brands over these years like HCL, MGF, Quality Walls, Tata, Gitanjali, HSBC, Levis, JK Tyres, Lakme, D’damas, Adidas, Euro Kidz, The Apollo Clinic, Chhabra 555, Kidzee, Motilal Oswal, Rosebys, Next, Welhome and more, through media, advisory and exhibitions.

Franchising business in India is doing well and is expected to witness CAGR of 30 percent over the next 5 years. According to FAI-KPMG franchising report estimates’, the franchising industry is expected to quadruple between 2012 and 2017. This is also expected to create job opportunities (including both direct and indirect) for an additional 11 million people by 2017. Increasing consumption, willingness to spend, growing preference for branded products, global exposure and use of international brands is driving the demand side of franchising,

It has a pan India presence with offices in Delhi, Bangalore, Chennai, Hyderabad, Ahmedabad, Chandigarh, Cochin, Jaipur, Kolkata, Indore, Pune, Mumbai and Guwahari. Besides these it has 16 partner offices.

With its strategically formed divisions, Franchise India has created its own niche as the pioneers of franchise industry and a small business authority.

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First Time Business Buyers - Do's & Dont's

The popular opinion across the globe is that entrepreneurship should be fostered as a key growth enabler in every country’s economic policy. After all, it has been quite ubiquitous in the west where entrepreneurship is more than just about starting one’s own business, it is a lifestyle.

Things have rapidly changed in India too. Ever since the time when the conventional mindset towards starting a business (being a standby option to unemployment) broke and risk taking gradually came into play, entrepreneurship has become the new ‘normal’ way of making a career. Normal, to an extent that today on an average two start-ups come up every day and more than 500 every year.

As glorious as the above statement sounds, there is another fact that might play a spoiler. More than half of them don’t even see the clear light of the day and pack their bags in just two-three years of time. The reason for that mishap ranges from factors as diverse as amateur or untested business idea/plan, unknown market presence, high unforeseen costs, lack of capital, low returns, absence of management assistance and many others. Moreover, all this often disrupts the aspiring entrepreneur’s work-life balance.

Franchising, relatively small in India though answers all of the above factors as a healthy and risk-free way out to give voice to one’s entrepreneurial passion. Franchising is already a global phenomenon especially in the West while it is not that small in India too. Just to give a snapshot of where franchising stands currently in India, the market is worth around $22 billion and is expected to double in size in the coming two-three years, growing 30 per cent annually. Moreover, a report by Franchising Association of India and KPMG India titled – Collaborating for Growth – estimates the industry size to quadruple by 2017 or before with an assumption of contributing around 4 per cent to the Indian GDP by 2017 from the current estimated 1.4 per cent.

By definition, franchising is an agreement between a franchisee (who wants to start a business) and a franchisor (the owner of the brand) wherein the latter grants the former the right to his/her brand’s trademark, products, operational procedures, IT system and marketing processes etc for a portion of franchisee’s gross monthly sales and royalty amount. To put in right perspective following are the areas where franchising can provide an edge to entrepreneurs in order to ideate, start, grow and further expand their businesses.

• Brand recognition: A franchisee gets to kick off its business and ride on the back of the strong brand name and established market presence that the franchisor has. This mitigates the challenges concerning establishing his/her own brand and creating awareness and trust among customers. So a franchisee will have customers right from day one because of the reputation the brand or its products and services command.

• Business model/plan: Though most of the elements of a franchisor business model or plan are standard for all franchisees however they help franchisees to tweak it as per the location of the franchisee unit. A franchisor’s successful business model reduces the risk of failure among franchisees.

• Capital support: A franchisor also helps franchisee raise risk capital from lending institutions becoming the intermediary between lender and franchisee. The lender too extends support confiding in the franchisor’s success.

• Management support: Initial training on different heuristics attached to running the business is offered to the franchisee in order to prevent avoidable mistakes while starting up which often costs lot of unforeseen amount. Location/site selection and management support and training in an ongoing manner in terms of staff training and managing accounting processes helps franchisee to focus only on the business aspect.

• Group buying: A franchisor also enables franchisee to benefit from lower price goods through group buying from franchisor. The collective buying power of the franchisor helps franchisee save money as the franchisor buys goods and supplies in bulk.

Now as relevant these benefits stands through franchising for aspiring entrepreneurs, deciding upon which brand’s franchise should be taken, of which industry and how much investment budget does the franchisee have to invest in taking up the franchise are few areas governing related benefits.

As a bridge or a facilitator, Franchise India helps people looking for franchising to start their own business connect with the right brand understanding their requirements as per the location, budget size etc. Established in 1999, Franchise India boasts of being the first company in India to introduce and develop franchising market in the country. The company has so far serviced more than 1,100 brands across sectors globally and have direct presence in 16 major Indian cities. The company caters to prospective buyers, franchisors, various industry experts through its digital, print and events platforms across India. The online platform www.franchiseindia.com is touted as world’s number one website on franchising with around 4.69 cr hits and 60 lakhs page views monthly and listing over 8,500 brands.

Through its print publication arm, the company publishes four industry leading magazines viz, The Franchising World, Retailer, Small Medium Entrepreneur and Estate World.

On the other hand, the company puts up four major shows round the year. First, Franchise India, Asia’s biggest annual International franchise and retail show comprising of exhibition, awards and conference. The show aims at bringing together 400+ exhibitors and more than 30,000 business buyers from India and abroad. Second, the Master Franchise Show which annually attracts the most successful global brands and service providers. Third, is the series of 15+ Franchise andRetail Opportunity (FRO) shows held every year metros, tier 1, 2 and 3 towns comprising of exhibition, conference and networking. Fourth is BusinessOpportunities Show (BOS), a franchise development focused business platform to enable like-minded prospective franchisees to communicate business concepts with others.

The end-to-end franchise solutions provided by Franchise India in the last 16 years has supported thousands of people looking to start their own business in selecting the right franchise through its team of seasoned experts having an in-depth understanding of the respective markets.

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