Are you an aspiring food franchisee?,
Are you an aspiring food franchisee? If yes, then there is a good news for you. Food franchising is in full bloom today, with large number of national and international brands expanding their businesses through franchise route. The article discusses the transformation in Indian’s food habits and how the change is inspiring entrepreneurs to dabble in food franchising business.
Tremendous changes have been noticeable in Indian’s food habits during the past few years. These can be attributed to a number of factors, like increase in disposable incomes, changing lifestyles - both husband and wife working, and leaving little time for woman to cook food at home, markets swamped with large number of international food brands, and an increased consciousness among Indians regarding the quality and comfort of eating in branded outlets. More so, the more than half of India’s population comprises of youngsters who are less than 25 years, and the two third is under 35 years, who usually prefer to eat out. An increased consciousness among Indians regarding the quality and hygiene of the food, that has been noticed, has further given a boost to franchising in food industry. Franchising assures the same quality of food in each and every outlet of the brand with similar environment and ambience wherever it is located in the country. According to a survey carried out by Franchise India Holdings Ltd (FIHL) and Federation of Indian Chambers of Commerce and Industry (FICCI), more than 30 per cent of new food outlets coming up in India are through franchise route. There are 150 exclusive food franchisors in the country who run almost 18,000 franchised restaurants.
According to Ashish Kapur, MD, Yo! China , “Indians love entrepreneurship and they love food. Hence, food and the related businesses go hand-in-hand in our country and the growth that franchising in this sector has assumed in recent times is phenomenal. Food franchise opportunities are the second most popular amongst franchisees after education franchise opportunities. Consumers in India still spend more than 50% of the share of their wallet in food and food products.”
The growth of food franchising in India has happened in almost all categories of food outlets whether it is quick service restaurants (QSR), fast foods, fine dine-in’s, take away’s or home deliveries. Under QSR and fast food category there are food franchisors like Pizza Hut, Dominoes, Pizza Corner, Yo! China, Shanghai Post, KFC etc. while Moti Mahal, BJN Hotels, Ruby Tuesday etc. fall in the category of fine Dine-ins. Almost all the franchised fast foods and fine dine’s have the availability of takeaway and free home delivery.
If you are an aspiring food franchisee, then there are certain things that you need to consider:
Study and determine both the start up cost and the running cost of the outlet Benefits of food franchise Till now we have discussed the growth of food industry and food franchising in India. We have understood the fact that food industry has grown and there are various reasons contributing to it. Now the question arises, why one should opt for food franchising than running a food business independently.
Brand name: These days, people know the brand, and they identify the quality and taste of food through its brand. Technical know how: Food business is a specialised business, so taking up a franchisee will help in providing specialised food services.
Secret recipes: Every food franchise is famous for its uniqueness of recipes. Taking a franchise provides the franchisee with all the secret recipes for different mouth watering delicacies.
Ambience of the outlet: By taking up a franchisee, you will not be bothered about the appearance or ambience of your outlet, whereas, as an independent business owner it will be difficult to prepare the draft of the ambience that is appealing to the people. So, hope, you are well informed and well prepared to take up a food franchisee. But, wait a minute! There are some cautions to consider before you take the final decision.
Challenges in food franchising
Regarding this, Kapur highlights, “One steep deterrent that an entrepreneur faces in this sector is that most of his investments are on fixed depreciable assets. Hence, one can’t go wrong on choosing the location. We at Yo! China spend a lot of time in knowing exactly where we want to be present in.” Further elaborating on the challenges he says, “As there is no dearth of food franchising brands in the country, the franchisee has to be very careful of his decision to invest in a brand. The concept should not only be successful at multiple locations, it should also have a ‘distinct’ competitive advantage. The franchisee should also base his decision on the popular taste of the market and the present competitive environment.”
Word of caution