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: is the mid-rung players who find it difficult, as they fight to find acceptability in the market. Agrees Major Rajan, “The first 13 years were challenging. Over these years, we have fine-tuned. Yet, there have been occasional hitches in national operations.” The company started its operations in the South and recently went national. “Feasibility of sales, business culture prevalent in a new market and temperament/attitude of the consumers need to be kept in mind when you are venturing into a new territory,” he says.

Many a time it is seen that franchisors as well as franchisees follow a herd mentality. Instead of trying out innovative business options, whether in marketing, training, supply-chain logistics, they prefer to go the time-tested route. It’s as if ‘here’s my idea, business plan, logo and trademark, go and replicate my business’. Now that’s a naive and opportunistic view and the vast majority of franchises that are signed up like that will definitely fail, say experts. Moreover, there are several wrong precedents set by both sides, such that many franchisees’ commitment to service quality is missing and many franchisors’ commitment to provide the promised support to their franchisees is in doubt, thus resulting in a tense and distrustful relationship. “Lack of transparency in deals, loosely drafted legal agreements, absence of well-defined policies, all play their part in unhinging a franchise agreement,” says Shah.

Financing for franchises is another problem area as many financial institutions do not recognise soft expenses as part of project cost. Agrees Girish Kumar, a FitnessOne franchisee in Bangalore, “Captive investment to open the first franchise was the foremost difficulty, but again the return seen is incredible. This has inspired us to open few more centres under the FitnessOne banner.”