India is reckoned as one of the world’s largest commercial marketplaces.Juxtaposed to industrial development and boom of IT industry, franchising has evolved as one of the strongest business model that has shown promises to reap rich dividends. India the fifth largest retail destination in the world and according to a recent survey, it is the second fastest evolving economy in the world, after China. Consumer spending in India has skied up 75% higher over the last four years. Amid such phenomenal development, franchising has attained an industry status in this country, with over 1800 franchise formats operating and employing over 1 million people in the sector.
Whether it is the effect of globalisation or market liberalization, Indian populace has become aware about brands and hence popular foreign brands have got keener about investing in Indian market. The foreign brands have set up their local stores in different Indian cities and have been getting astounding response from the rich market trend. Brands such as McDonald’s customised their products to cater to consumer preferences and have been successfully thriving on the geographically diverse Indian market, through their franchise.Franchising has brought in the advantage for every brand to reach potential consumer base in the country and expand their business which other channels of distribution can not match.
Owning a franchise business is not an easy trade and it requires proper strategy formation and implementation as well as entrepreneurial spirit to manage a business. Most of the franchisors aid their franchises staff recruitment and training. The franchisors also help in understanding the trend and market in each region and aid in site selection, setting up machines and assist in designing the store with the theme complying with the core brand identity.
The concept of franchising revolves around the system where the franchisor grants a license to the franchise owner to use former’s diverse intellectual property rights. The property rights include brand name, trademarks, patents, and trade secrets along with marketing techniques. The franchise owner, in return, pays annual fee to the franchisor.
Franchise business models provide superb opportunity to anyone who is seeking to embark upon an entrepreneurial journey. Investing in franchise is the safest move as it involves minimum labour and yields considerable revenue. Owning a franchise of a well-renowned brand guarantees success in minimum possible time. Since franchising lets the owner jump on a business model that is already tried and tested, the hassle of establishing brand presence and boosting the brand visibility is literally ousted. Franchising in India will continue to grow rapidly and will become profitable model in days to come.