Franchising is two decades old in India and can begin with virtually no compulsions on franchise regulations or franchise registration unlike other countries. However, the brands face a set of challenges when it comes to selecting the right franchise part
No business is complete without challenges, especially for an international player foraying into the Indian market. A foreign franchisor need not be a billionaire for expanding across Indian borders but should be able to foresee a set of challenges that usually creep in. Let us learn about the hurdles that are coming in the way of international brands.
Real estate challenge
Securing quality space is one of the biggest challenges, international brands face in India. The rentals are high for the location that can tap a good clientele. Sharing a word on how the brand meets this challenge; Marks & Spencer shares, “Our property team works hard to ensure that we are in the right strategic locations to best serve our customers in India. We have also ensured that we have the right formats to capitalise on the growth opportunities in the market, so for example the lingerie market presents us with an exciting growth opportunity and our smaller lingerie and beauty store format with a smaller store footprint allows us to access prime shopping locations. Through Myntra and Flipkart which now offer M&S products online, we have also been able to extend the reach of our brand.”
Running pilot operations
International brands usually opt for pilot franchising as a test model to determine whether the products or services will be able to garner a response in the industry. Sharing a word on the challenge, Maid2Clean is facing in India, Mike Hanrahan, Managing Director says, “Ability to run a pilot system for the network is a challenge in the Indian market. We are seeking articulate, tenacious and hard working area developer investors for India.”
Finding the right entrepreneur who possesses the financial capability and resources to recruit and support local franchisee remains a challenge for brands. The brands demand franchisors having a prior experience in developing and managing business.
The brands seek good interpersonal, influencing and social skills when it comes to selecting right business partners in India. Cathal Kiely, Managing Director, UTime Fitness opines, “There are no country wide standards and regulations in India. There is a lack of skilled trainers here.”
Ability to work alone and lead a team coupled with sales experience is what the brands feel is lacking in India. The entrepreneurs are enthusiastic to partner with the brand, but when it comes to delivering the product or service, they lack the right business judgment to recruit skilled workforce.
However challenging it may seem, if the brands are loyal towards their franchise partners and are willing to assist them in expansion by rendering proper training systems, operational support, assistance for marketing launch and audits; the hurdles may be overcome. “Honesty, integrity and ability to follow a proven business model that will generate a long term residual income is what we are seeking in our franchisees in India. The integrity we show in our dealings with franchisees, together with our ability to find the right franchisees has helped us run a successful franchise business till date,” concludes Hanrahan of Maid2Clean.