Research Apr, 05 2010

India: successful platter for foreign franchisors

With India emerging as a potential market, the heat is already felt by the international brands. A lot of foreign brands are entering the Indian market through franchising to gain their share of profits. Read on

By Abha Garyali
Sub Editor
India: successful platter for foreign franchisors

Due to the rise of massive business opportunities, the international brands have made a beeline to the Indian market. The international brands are foraying at large to the Indian market to enjoy heavy profits. This trend which started long back has recently gained momentum. One of the main reasons is the relaxation of trade policies by the Indian government. Earlier, it was not viable for international companies to enter the Indian markets. Nevertheless, with the government relaxing its trade policies during the 90s, the in-route of these companies have become easier. Moreover, the increase in the disposable income among the middle class and rising awareness for the international brands are the leading factors for the entrance of the global brands. Another prominent reason for this is the craze for international brands and labels among Indians.

According to the survey conducted by ‘The Franchising World’ (TFW), magazine, Top 25 international brands from different sectors were identified. The article based on the study, can help the prospective franchisees and master franchisees, compare the various franchise opportunities and select the most viable one after learning its pros and cons.

Let us find out the dominant international sectors which have tasted success in India but still have lots to offer to the consumers.

Dominant sectors

The survey identified 25 international brands from different sectors. Find below the dominant sectors and the reasons behind their success:

Food and beverage (F&B) sector: With the majority of youth in India, it is no wonder that F&B international brands are the most dominating sector. Youngsters, both males and females, like to spend time and relax in the coffee bars, ice-cream outlets and fast food restaurants. Another reason is the increasing disposable income, especially among the middle class. Moreover, most of people now prefer to eat out regularly, is also leading to its success.

The F&B sector tops the list of international brands with 12 players. These include:

  • Coffee and juice bars (beverages): Coffee bistros like Gloria Jeans Coffees, The Coffee Club (Australia based companies), and Café Jubilee which started in Victoria, Gozo Malta offering wholesome delicious traditional Mediterranean food are included in the list of most successful foreign café bars. Jus Booster Juice, a Canadian brand which entered India through its master franchisee-Brand Calculus is also included in the section.
  • Ice-cream parlours: The ice-cream brands include Baskin Robbins with its 375 outlets in 81 cities of India and Swensen’s which has recently entered India after experiencing great success in US, Thailand etc.
  • Fast food restaurants: The fast food restaurants like Chicking, Pizza Hut, Marry Brown, Subway and The Pizza Company are the top international franchising brands in the country.

Apparel brands: The apparel sector comes second in the list with top three players. With the majority of youth preferring trendy and fashionable stuffs, the apparel sector is sure to grow in the coming years as well. The prominent players like Levi’s available in 110 countries and with 180 franchised stores in India and adidas, sportswear apparel with 600 stores in 170 cities pan India are included in this sector. Kitsch, launched by TSG Group in 2008 is a multi brand luxury retail boutique which offers and promises its franchisees to grow with them is another brand in this section.

Education and training sector: With the rising MNC and call centre culture, the need of management training is felt high in the country. Crestcom International, a management training centre entered India to address these needs of the youth. Moreover, training and education centres for children like Aloha India, and UCMAS, are also included in this category.

Few other sectors: Other players and sectors included in the top 25 are Re/Max, a real estate brokerage, Sign-A-Rama, a graphic design company, Samsonite South Asia Pvt. Ltd, a famous and well established travel goods company. Besides these Cartridge World, cartridge recharging company, Nokia, telecom player, Best Western, hospitality player, Contours International and Meditravels, health, beauty and fitness centres also come into the category of globally renowned players. All these brands and sectors are guaranteed to grow in the coming years due to their unique and innovative concepts. With the awareness of brokerage firms, graphic designs, health, cartridge refilling and telecom industry, all the above sectors are guaranteed to bring in profitable results for franchisees. Moreover, the increase in travelling has led to the use of luggage carriers and hotel industry.

Entrepreneurs aspiring to take up franchising can think of partnering with the global players to gain maximum returns in the franchising arena.

Related: Post budget reactions

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