Franchise trends May, 23 2014

Franchising & its altering trends

With the passage of time things change, so do the trends in the lucrative franchise venture have. Both, franchisors and franchisees, are adopting novel ways for capturing the pulse of the market in the trade.

By Sandeep Rana, TFW Bureau
Senior Copy Editor
Franchising & its altering trends

Online sales, multi-franchises, business diversifications are among the hot trends. Read on to know more…

Moving to Malls:

Malls are the chosen destination for retailers now. Almost all the brands into franchising are targeting malls for their venture. One can find various franchisees moving to malls from markets to cash in on the trends.

“Going to the malls is beneficial but it is about revenue sharing. If one is not getting revenue sharing, then it could be a costly affair, in such case its okay not to move to the mall,” comments Jagdeep Chhabra, MD, Chhabra 555 Fashions Private Limited.

Going online:

E-commerce sites like Amazon, Flipkart and Snapdeal have become popular in India in a last few years indicating the trend is a hit in the Indian market. More and more brands are preferring to go online.

“ERetail is a trend these days. Four per cent of our sales are happening online. The online retail will further help us boost our retail sales too,” says Mahesh Gupta, Chairman, Kent RO Systems Ltd.

The e-commerce websites have impacted the sales of brick and mortar stores across India. “Online presence is must and eRetail is an unstoppable phenomenon,” adds Pradeep Hirani, Kimaya Fashions.

"Evolution of e-commerce market started in 2011 and just in a span of four years there is an e-comm explosion. Sixty million people visited the e-comm websites in the year 2013 and the numbers will rise to 150 million by 2014 end. The, most preferred top five e-com websites in India are Snapdeal, Myntra, Jabong, Flipkartand Amazon," shares Nitin Bawankule, Industry Director, Google India.

Multi-unit franchise:

Another trend that is catching up across the franchise fraternity is the cluster network or multi-unit franchising. Franchisees have seen benefit of holding multi-unit franchises. Once, you have held grip over your single franchise it can rain mollah for you by acquiring several franchises.

Diversifying brands:

It’s the experience which matters in the business. Franchisors moving from the traditional ways of holding franchise in a same field are turning on to diverse brands. This has resulted in good benefits as franchisees feel it’s the management skills that matter and the product knowledge comes with the time.

“Diversifying brands is a good idea as brands complement each other. For example, if one has an apparel brand, he can give some good coupons to his customers to be utilised at his food franchise venture. Diversifying brands increase the footfall of the customers,” feels Jagdeep Chhabra.  

Franchisee to franchisor:

This is a new sphere where the franchisees are taking franchise just to learn the business management from an already established brand. As a franchisee, they have the opportunity of learning the ABC of the business from already recognised brand. Once, they have learnt the nuances, many prefer to have their own venture in the same field whenever their contract with the concerned franchisor gets over.

A Kolkata-based group Primarc earlier had the franchise of Crossword, now they have their own bookstore-Story. “Our contract with the company is over,” reasons company’s Official Spokesperson.  

However, some entrepreneurs feel a few people about 20 per cent go for this. “Without the expertise and support of the franchisor, it is not possible. Those going in for their own venture in the same field for which they earlier had the franchise are unsuccessful,” feels Jagdeep Chhabra.

Related: Customisation is the key to happier franchisees

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