Franchising market in India - by apu_shiv
An interesting feature of the franchising market in India is that while a large chunk of it is taken by franchises of foreign, mainly American, brands, small investors and small enterprises are happier to take franchises of home-grown companies. The McDonald’s, KFC, Nike and Pizza Hut franchisees are those who can afford to pay the huge franchisee fee and start-up costs that these companies demand. Smaller franchisees look at domestic companies or relatively unknown foreign brands in areas such as computer education, restaurants, health care, courier logistics, beauty parlours and apparel.
A report released by Franchising Association of India (FAI) says that while franchising as a business model has been known in India for decades, “there is clearly an unprecedented interest in adopting this model in recent times as is evident from the growth rate of 30-40% per year as witnessed in the last four to five years. There are already more than 600 franchising systems operating in the country. The Indian market is at a stage where franchising is a great model that allows both franchiser and franchisee tremendous potential for growth.
Given that the survival rate of a franchised business is more than twice the survival rate of independent small businesses, it makes sense to start your own business riding on the back of an established and proven model. The franchise model is a great way for a franchiser to expand operations rapidly, with relatively low overheads and expenses, coupled with the local expertise that franchisees provide.