Food and Beverage Apr, 13 2010

Leading food franchise concepts

With the wide acceptance of local and international cuisines across different sections of the society, F&B franchises remain one of the most appealing business concepts for the aspiring entrepreneurs in India. Let us explore

By Abha Garyali
Sub Editor
Leading food franchise concepts

Food being one of the basic necessities of life is gradually becoming a status symbol of the middle and upper middle class society. These days people identify food by its brand. This dramatic change in the mind set of the Indians has led to the emergence of food businesses as one of most lucrative business opportunities in India.

Considering the growth of F&B sector, the recipe of a successful franchise begins with good food and excellent business insight. The growth of food franchising in India can be attributed to an increase in the disposable income, rising brand awareness, working women and a larger part of the population consisting of the youth. Moreover, people are eating away from home for various reasons. In addition, the rising awareness of ethnic foods and varieties among the people also is one of the major factors. In India, it is not uncommon to find cuisines of south, north, east, or west being served in a single location. This has changed the food selection pattern and food habits to a great extent. Hamburgers and Pizza are not Indian foods and does not have any semblance to traditional dishes but they are getting popular with the entrance of KFC and Pizza Hut etc. If we consider all these factors, the unprecedented potential of food franchising can be predicted.

The Franchising World (TFW) magazine recently conducted a survey on Top 100 franchise businesses in India. Out of 100 national and international franchisors, 21 companies belong to F&B industry. It shows that food franchising is the dominating franchise businesses in India.

Formats in F&B industry

At present there are total of 175 food franchisors in India. To cater to the needs of the growing customers, belonging to various cultures and statuses, the franchisors have come up with a wide array of formats. These are fine dine, quick services,ice creams and beverages.

Fine dining formats: The largest share of the franchisors, almost 40 per cent, belong to the fine dine format. With the change in people’s attitude about eating out  more and more families dining out has resulted in the popularity of this format.

Quick service restaurants: Another very popular format is the quick service sector or the fast food sector. It is the youth who generally prefer to eat pizza, burgers etc. With about three fourth of the country’s population consisting of youth, this segment is sure to grow in the coming years.

Ice-cream brands: As ice-creams occupy the position of one of the favourite sweet-dishes all over the world, exclusive ice-cream outlets have become a common trend. Many national and international players have set up their successful outlets. Moreover, its low-cost investment also attracts many to start their ice-cream franchise.

Beverages brands: With mostly the youth preferring to relax and gossip in cafés, bistros and juice bars, this segment has progressed a lot in the last few years.

Now let us have a look at the various top players according to the four main categories of established, emerging, debutant, and international.

Categorisation based on growth and success

Established players: Established players consisted of franchisors that have been into franchising for a long time and  have already made their mark as prominent players in the industry. Sagar Ratna, a quick service restaurant is included in the category followed by Amul, a food retailing company and Kwality Wall’s, an ice-cream brand.

Emerging players: Franchisors with less experience than the established players but have undoubtedly tasted success in franchising is included in the list of emerging players. They are not the leaders but are on the way to become, in the coming times. The emerging companies of F&B sector include Slice of Italy, under the format of quick service food restaurants with its variety in pizzas etc and Dosa Plaza, a chain of vegetarian south Indian fast food restaurants. Coffee Day Xpress, coffee outlet, also falls in this category due to its range of coffees and ever-increasing franchisees.

Debutant players: These are the franchisors who have recently forayed into the field of franchising but has a promising future are the debutant players. Kaati Zone, a fast food restaurant with a specialty in kaati rolls initiated franchising in 2009 and currently occupies a position in the debutant brands. Similarly Khyber, a fine dine restaurant which started operation in 1958 but forayed into franchising in 2010 is included in this section. Daily Bread, a chain of bakery stores entered franchising in 2009 is also included in this category.

International players: This category includes the foreign franchisors that  have entered the country through master franchisees and other franchisees. These franchisors have succeeded in establishing their brands in India. F&B players are dominating in this sector with 12 brands. The fast food sector includes Pizza Hut, Subway, Pizza Company, MarryBrown and Chicking. The beverage brands include Gloria Jeans Coffees, The Coffee Club, Café Jubilee and Jus Booster Juice while the Ice-cream brands include Baskin Robbins and Swensen’s.

To conclude it can be aptly said that the international players together with Indian players have led to the growth of F&B sector in India. Moreover, with the increasing popularity, this sector has a lot of potential for aspiring entrepreneurs interested in food franchise businesses.

Related: Know how your grandpa can start a QSR after retirement??

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