Master franchising is gaining immense popularity in the country these days. The experts of the industry believe that it is always feasible to open a good number of outlets first by a Master Franchisee himself and later go on adding associate franchisees f
According to reports, the Indian franchise industry is estimated at $24 billion with a healthy year-on-year growth of 30 per cent. Its size is estimated to reach $35 billion by 2020.
Master Franchisees in India are growing with the rise of Indian and foreign franchise brands who are fast spreading their reach pan-India. A Master Franchisee, who controls the franchising activities in a specified territory of a brand, is face of the brand in that region.
One of the primary responsibilities a Master Franchisee has is to expand the number of outlets of the concerned brand in his territory. Most franchising expert and people in the field feel to attain success a Master Franchisee should initially open a few of his own stores and then he should grow on to sub-letting the brand in his area. It not only sets a successful example for other sub-franchisees to follow but also gives experience in the operations and other franchising aspects of the brand to the Master Franchisee.
Sharing his thoughts on the same, Vinod Kapoor, Business Associate, Titan Company Limited, says, “Yes, one should first open his own outlets with high RoI so that he can present those to sub-franchisees. He cannot mere be an intermediary between franchisor and sub-franchisees, instead he has to ensure high RoI for the latter as well.”
Some like Sunit Mishra, Director, Abacus India Agencies Pvt Ltd, feels that a Master Franchisee should open atleast four to five of his own stores before sub-letting the brand. “One should open atleast four to five outlets of his own before sub-franchising the brand to get a hang of franchise operations and running an outlet. It will make him understand product, franchisor, operations and other related aspects of the brand. This will lead him to do better in the future when he heads with sub-letting the brand,” Mishra opines.
Based on his own experience Hemant Shah, Master Franchisee, Firefox Bikes Pvt Ltd, who runs six stores, shares with Franchise India, “Coming up with n number of your own stores before you go ahead with sub-franchising is advisable. It will give you confidence to operate multi-unit stores. People, who are probable franchisees, will also follow you and would show interest in opening similar sub-franchise stores.”
Strategies for Master Franchisees
There are many factors a Master Franchisee should keep in mind while running multi-franchisees or expanding his brand’s operations in India. Keeping these points in mind one can go a long way in the franchising industry.
Atul Madan, President, SSIPL Group, suggests, “He should develop efficient backend infrastructure and scale up step by step. He should also have a fair understanding of consumer and the brand he is associated with. There is also need of identifying right retail spots when heading towards expansion.”
Adding to him, Vinod Kapoor, comments, “Master Franchisee is the owner in a country or in a particular region, he has to take care of the sub-franchisees. He should come forward to resolve any issues between the parent company and the sub-franchisees. He has to sustain his and his brand’s credibility. To see everything goes well, he has to raise a capable team that takes care of all franchise operations.”
Challenges for Master Franchisees
Being a Master Franchisee, who has a vast set of responsibilities, including investing time and money in developing the system, to manage sub-franchisees by providing guidance and training, to invest in stocks, have HR and sales team, has to face many challenges too.
“One of the main challenges is managing and gathering funds for the operations,” says Kapoor. Hemant Shah feels when one has multi-unit franchise there are a lot of obstructions. “Different people will say different things about the venture but key to success is to stay focused.”