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Advisory 2009-12-02

India the land of prosperity for western brands

With growing economy, disposable income growth and increasing brand consciousness, a number of western brands are heading towards India through franchising. Associating with western brands can bring lot of business perspectives to the aspiring franchisee

By Ramanjit Kaur Feature Writer

India with globalisation has emerged as one of the most potential countries in the world. The concept of franchising has become hugely popular in India as it has led to the rise of economic standards of the people and has provided job opportunities to the masses. Thus, with such global change, the western brands are targeting India as a land which has both business prospects and potential customers.  According to Babette Marzheuse-Wood, Senior Consultant, FFW Consultancy LLP, “Most western brands are attracted to the Indian market, as they see India as the engine of economy for future. The upcoming western brands prefer expansion through franchising as it provides access to local expertise (by associating with a local franchisee).  Also, As Babette says, “The local partners contribute local market knowledge and access to local real estate. They also provide local infrastructure which lessens the risk of franchise failures.” These are few basic requirements for expanding in a foreign country or an altogether different state. Apart form this; western brands usually look for aspiring development partners rather than a single unit franchisee.

So, for an aspiring entrepreneur, it can be a wonderful opportunity to be associated with a western brand by taking up its franchise. There are a number of ways through which a western brand can enter India. These are –

  • Direct franchising: It simply means when a franchisor directly selects his/her franchisees from the targeted local market and grants them the right to utilise his/her intellectual property to expand the franchises.
  • Master franchising/ Area developer: It is a popular way of entering a foreign market. The franchising brand enters the market by using a countrywide master franchise or area developer.
  • Joint ventures: This approach allows the franchisor to participate in the equity admiration of the partnering company while providing it with an ongoing revenue stream, which is generally based on gross sales.

Well established western brands

A number of western brands from various sectors have established themselves successfully in India through franchising. For example:

  • Apparel industry: Levi Strauss, Reebok, Adidas, Nike, Pavers England and so on.
  • F&B sector: Subway, Yo! China, Baskin Robbins, Pizza Hut, Dominos, and many more.
  • Luxury market: Gucci, Versace, Benetton, Valentino, Louis Vuitton
  • Hospitality industry: Holiday Inn, Best Western Hotels, Accor Hotels, Hyatt Hotels and so on.

These are all well recognised brands in India and they have plans to make prominent place in India. So, if you have ever dreamt of partnering with a western brand to start your own business, then it is the right time to give wings to your dreams.  Here we enlist a few pros and cons of associating with a western brand.

Advantages of taking franchise of western brands

Partnering with western brands has innumerable advantages for an entrepreneur. These are as follows:

  • Well recognised brand name
  • Tried and tested franchise system.
  • Intensive training and regular update sessions, advertising, and marketing support to the franchisees.
  • Innovative ideas and effective strategic tools for successful business  

Disadvantages of associating with western brands

While on the other hand, there are a number of disadvantages associated with a western brand that includes:

  • The first and foremost difficulty that a franchisee can face is the inflexibility of western brands in terms of executing the franchise operations. They want everything to be done the same way as done in the West.
  • Also, the western brands most often fail to make any alteration in their brand.  This can create problem as the same concept may not work efficiently and effectively in the Indian market as well. So, negotiating to compromise with their brand can be a major hurdle to overcome.

So overall, one can say that taking up a franchise of a western company can be beneficial in terms of making profits and owing success.

Comment
alok gupta 06, Nov 2009 at 12:34 AM
Dear Sir/Madam , Kindly tell me the details for having a Franchise of BOOK STORE. Thanx , Alok Gupta
SACHIN 08, Nov 2009 at 06:27 PM
DEAR SIR, WE HAVE SPACE OF APPROX 800 SQ FEET AND WISH TO OPEN A FRANCHISE OF A REPUTED BOOKSTORE, KINDLY MAIL ME THE CONTACT NOS OF THE VARIOUS COMPANY INTRSETED TO TIE UP WITH US. REGARDS SACHIN
S.BALACHANDAR 11, Nov 2009 at 02:00 AM
Dear Sir, I am very much interesting in reading books and magazines. So, I am willing to open a bookstore at Srirangam (Trichy,Tamilnadu). My investment is near around 2-3 lacs range. please give me the details and contact. S.BALACHANDAR
Jagdip 14, Nov 2009 at 12:16 AM
Hello Sir, I would like to know more about the book store Franchise. Please let me know how can I go ahead with this option. Jagdip
nandakumar 17, Nov 2009 at 04:47 PM
I have experience of 20 years in marketing, a lover of books, wishes to start a franchisee book shop at kerala, can you pease provide the details.
Deepak 17, Nov 2009 at 07:28 PM
Dear Sir, Please give us more details. We are willing to open a book store in Visakhapatnam. Please contact us. Thanks and regards, Deepak
Ashwini 27, Sep 2010 at 03:25 AM
Dear Sir, I am avid book reader and very well ,want to do a business in a same field. I am very much interested to open up a franchise with crosswords in my home town Nagpur. Can you give me a more specific details such as: Finance Company requirements
Pavan 07, Feb 2011 at 03:34 PM
Hi Sir I am interested in opening a book franchise. I need the contact details of Corner Book store company if possible. Please do the needed. Regards Pavan
hanitha 08, May 2011 at 06:54 PM
hello sir, im from a town Rajahmundry,Andhra Pradesh and would like to introduce a book store here at my place,as there is no proper book store here till now.. i am a graduate in b.tech and im a book lover.. would you kindly tell me the requirements to set up a franchise book store,as my place is an up coming city. thank you :)
hanitha 08, May 2011 at 06:56 PM
hello again sir, there is this book store at visakhpatnam named Pages. would you kindly give me their details if they are interested in offering any franchise? regards,hanitha
annpurna 15, May 2011 at 06:10 AM
i am intrested in book store franchise for chhatishgar state for bilaspur city.
madhavi 22, Mar 2012 at 02:18 PM
dear sir, kindly tell me the details for having franchise of book store
P bordoloi 14, Oct 2015 at 08:02 AM
I will be retiring from service after 4 yrs, I have a plan to open a book store at Jorhat, a city with highest literacy rate in Assam with a start capital of Rs 5+ lacs, how I should plan ?
Cayden 03, Apr 2015 at 05:37 AM
This could not posslbiy have been more helpful!
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