The economic slowdown has hit the retail industry hard and players are increasingly turning to franchising to expand their footprint. Industry estimates put the franchising industry at Rs 650 crore, growing at a compound annual growth rate of 25-30%.
?The industry is expected to maintain the growth this year; in fact, the economic downturn has given a fillip to the industry. This is the most dependable model for budding entrepreneurs as it provides complete brand support through a standardised process guaranteeing consistency in the quality of the products and services,? Gaurav Marya, president, Franchise India Holdings, told FE.
About 50% of the retail business worldwide is thriving on the franchisee model and in India too the market is picking up. Marya added, ?About 80% of the companies in the small retail format are taking the franchisee path for expansion. There are over 100 opportunities to be explored across 25 industry segments including food and beverages, fashion and lifestyle, retail services etc .?
Treading on the same path, Evolve Fitness, part of Foothills Wellness Systems, is planning to open 40-50 new fitness centers across the country in the next two-three years. ?We are looking at the health market in tier-I and tier-II cities in the west, south and north. We have three fitness centres and the plan is to open another 40 to 50 through franchisees,? said Manoj Shah, CEO, Evolve Fitness. Restaurant chain Nirula?s is planning to expand its presence across the country by opening about 25 new outlets this fiscal under the franchise model. The company has already launched five new outlets out of the 25 proposed. Besides the national capital region of Delhi, Nirula?s is eyeing tier II and tier III cities such as Jaipur, Indore, Chandigarh, Lucknow for expansion.
Dr Lal Path Labs, which operates through a central lab, 40 satellite labs and 600 collection centers, is now opening doors to franchisees. OP Manchanda, CEO, Dr Lal Path Labs, said, ?We are ready to hand over the management of the satellite labs to entrepreneurs. We plan to take the number of satellite labs to 100 and collection centers to 1,000 in the next three years. The focus of expansion will be tier-II and tie-III cities. To tackle the problem of financing we are ready to put in about 50% of the total investment.?