franchising aspects Oct, 01 2012

Small stands for big benefits

Small towns that used to have a secluded life have started attracting big franchise brands during the past few years. Read on to explore the reasons that motivated franchisors to move to these towns along with its impact.

By Abha Garyali
Sub Editor
Small stands for big benefits

Good news is on its way for the people living in smaller cities and towns. Having grabbed their maximum share of profits in metros and big towns, established franchise brands are now ready to eat up the business space in small towns. Small towns and cities which earlier were devoid of good eating joints, shopping centres, retail outlets of big brands or other service brands have now attracted the attention of big successful brands in India.

From nightmares to dreams

Till a decade back it would have given nightmares to any franchisor or business owner to open his outlet in a small city or town. However, at present the scenario is totally different. Changing lifestyle and consumer behaviour of people living in these cities and towns has influenced the big brands to take a dip into business expansion in these small towns. The credit for changing lifestyles and consumer behaviour of the people living in these areas goes to television and internet. People here have become aware of the latest fashion, designs as well as brand owing to television, internet and other media. They too are getting lured towards big brands. Therefore, it is quite common to see people dressed up in branded apparel, footwear, including branded products in their daily routine. As informed by Shahnaz Husain, Founder and Chairperson, Shahnaz Husain Group: “Thanks to television and commercial advertising, the awareness of global trends, consumer products and brands has extended to smaller towns. In certain categories like beauty even people in smaller towns are quite brand conscious. Therefore, big brands want to venture into smaller towns.”

Accelerators for bringing the sea change

The change of getting big brands into small towns and cities is undoubtedly a big step for the development of India as a nation. Not only are the smaller towns becoming more developed but our whole nation is also getting modernised. The first and foremost factor for this change is the increasing awareness among people in small cities and towns towards brands. Earlier, it was considered sheer wastage of money to buy branded pair of jeans or shoes or eat in a big restaurant or get pampered in expensive salons. But with rising awareness the middleclass is more then ready to experience best services at best prices. Moreover, people now have more of disposable income, which they do not mind spending on their comforts and luxury. One more factor attracting customers of small cities and towns is their love for brands. More and more people are influenced by brand name and want to have them in their wardrobes.

Another big accelerator for brands to enter small towns is the lack of space in big cities as well as the high rentals of opening an outlet in a mall or high street. This has made the brands to enter small cities with low rents and high foot fall as well.

Big brands in towns

As mentioned earlier it was impossible for big brands to even think of launching outlets in small cities and towns till a few years back. But during the recent years there has been a sudden change due to the above given factors. This has led to brands entering and expanding in small cities.

Raymond, an established retail menswear brand is planning rapid roll out in smaller cities via franchise model. Currently, the brand has 700 exclusive stores spread across 300 cities in India. According to Rakesh Pandey, President, Retail and Business Development: “Expanding via franchise model and pioneering in smaller cities retail segment would be the key drivers to enhance our presence across the country.”

Catmoss, a kidwear brand has also chalked out plans of rapid expansion pan India, especially targeting western, eastern and southern parts of the country along with tier- II cities.

Digital imaging technology provider, Canon is also among the brands entering towns and smaller cities. Canon plans for opening 300 stores pan-India, including small towns.  Canon recently signed three stores in Kerala, two of which are in Kochi and another in Thiruvananthapuram. During the last calendar year, the company opened 73 exclusive stores in 42 towns in India. 

Ferns N Petals (FNP), pioneering florist brand in India has been on an expansion spree by opening outlets in towns and small cities like Kanpur,  Dehradoon, Bilaspur and many others. Anil Sharma, General Manager, Retail, Ferns N Petals said: “Being the pioneers in the organised flower industry, we understand the aspirations of the people in emerging metros and small towns where people want a superior shopping experience and hence, we are certain that the foray of FNP in the city will change the way people buy flowers and gifts for their loved ones.”

Presto, personalised gift brand has also expanded in smaller cities. It plans to open another three stores in Trivandrum, Bengaluru and Agartala. Going by the overwhelming response in South India, the brand is eyeing for stores in places like Mangalore, Mysore, Chennai, Hyderabad, Vizag, Vijayawada and other Tier II and III South Indian locations.

Go Foodies, a sub-brand of Indian QSR brand, Go! Chaatzz is all set to open its franchise outlet in small town like Bhatinda in Punjab. Sameer Kachru, Owner, Go! Chaatzz informed: “The upcoming outlet in Bhatinda is a part of our expansion spree in pan India via franchise route.” The brand is on a huge expansion drive targeting 50 new outlets to open by the year’s end. It plans to expand in small cities like Raipur, Ranchi and in big cities like Bengaluru, Chennai, Mumbai and many more.

Forecast for smaller towns

The future seems quite bright for small areas. As both national and international brands are heading towards these potential markets it can be said that both retail and service franchising is on the rise not only in metros but in small cities as well. The youth in smaller cities with an entrepreneurial zeal can surely reap long time benefits by taking a franchise of any established brand and make a better living.

Related: Never accelerate biz expansion beyond control

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