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: If you were at the Franchise India expo held in the Capital recently you would be forgiven for thinking it was one of those discount sales that was on —looking at the jam-packed venue with people trying to vet a business venture in five minutes flat, it wouldn't take much imagination to think that all those brands vying for your attention were up for sale. And in a way they were — as small entrepreneurs with a gleam in their eye attempted to decide which brand could make them a millionaire overnight.
But is becoming a successful franchisee that easy? Let's look at the statistics first. Franchising in India has been growing at 30-35% year-on-year in the last couple of years and is gradually becoming the backbone of retailing. At present, there are more than 1,500 franchisees across categories close to 60,000 products and services — clothing brands, furnishings, healthcare, education, restaurants, travel, logistics, lifestyle products, et al. However, the franchising industry accounts for only 2% of the total organised retail market against 50% in the US. But experts believe that it is franchising that can provide the retail revolution the required resources to expand in India. And not just that, it can also be a great employer. Right now it employs around 4,00,000 people and this could touch the three million-mark by 2010 and account for 15% of the organised retail market, believes CY Pal, national president, Franchising Association of India.
For every franchisee who succeeds, there are many others that fail. Dhawal Shah, deputy executive officer, Franchising Association of India says that while 80 out of 100 wannabe franchisees are successful, 20 have to bite the dust. “Franchise culture has not matured yet in India as every franchisee has not whole heartedly accepted this model. Hence there is a lingering suspicion. Bad franchisees affect the growth,” says Major KV Rajan, executive director, Veta, an English language training chain.
Organised retail and franchising being a relatively new format in India, it is still a little difficult to find suitable locations and properties in reasonable amounts, adds Jay Gupta, MD, The LOOT, a multi-brand discount chain. For big brands, it is a much easier ride with both brand owners and master franchisees standing tall. The franchisees here come with the wherewithal, and many a time they are already into similar agreements with other brands, which provide them the market experience. It...
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