Gaurav Marya is credited for the rapid growth of franchising in India. Almost single-handedly he evangelised franchising through a mix of propaganda and support services, which earned him the epithet, the Father of Franchising. In the bargain, he built a solid business model for his company, Franchise India. In a conversation with FE’s Verghis Chandy, Marya says his focus for the next few years would be to ensure that franchising growth does not turn reckless in India. Excerpts:
We’ll start with a simple question. What is your role in franchising?
Our role is really about facilitating and helping entrepreneurs. We are an investor-centric, franchise-focussed company. We are the only integrated franchise solutions company in the world. We help franchisers to expand and entrepreneurs to choose the right franchises through our advisory and (franchisee) recruitment services, magazines, web sites and exhibitions. We have 14 offices across India to facilitate these. We conduct about 110 exhibitions a year.
How was the growth of franchising in the past few difficult years?
Franchising grows in recession. It's surprising. Franchising grew 30% year-on-year in 2008. In a recession, big businesses restructure and downsize, leading to massive layoffs. The laid-off turn to franchising, since it is the easiest to way for a first-timer to get into business. In fact, franchising is the best way to earn yourself a job.
What is the success rate of such new franchisees?
Say, 75% odd first-timers survive the first five years.
It is often felt that product or service quality is not uniform across Indian franchisee units. Why so?
This happens because some franchisers do not build the right franchise model. It is an issue with transferring know-how; you know how to do it, but do not know how to transfer it. Again, some may not have a developed a process to audit quality across the channel. These are exceptions. On the whole, franchising has brought some consistency in quality for the consumer.
Is there need for a specific law to govern franchising, as some have suggested?
I don’t think a separate law is required. Only three or four countries have a specific law on franchising. We have a very watertight British law on contracts. Regulations can sometimes hamper the growth of an industry which is running on its own steam.
May be a law to protect the consumer and the franchisee?
I think, both franchiser and franchisee should be protected. In America, laws favour both. It's a win-win for the franchiser