India is unique in terms of its large consumer base which is open to experiment with new ideas, thus proving to be a fertile ground for the franchising sector
With a population base of over 133 crore, India is poised to become the third-largest consumer market behind only the US and China. Consumer spending in India is expected to grow from USD 1.5 trillion at present to nearly USD 6 trillion by 2030. This makes India a huge potential market for international franchisers as well as in-house entrepreneurs. Over the last few years, the country has seen a growing interest from high net-worth individuals (HNI) as well as working executives who opt for unit franchises.
The number of HNIs in India is expected to reach 5,29,940 with a combined wealth of Rs 188 lakh crore by 2021, as per IIFL Wealth Index 2018. India will rank fourth in the number of HNIs added by 2021 after the US, China and Japan. This rise in the number of HNIs is further bolstering the franchising ecosystem. Moreover, franchisers are buoyed by the surging entrepreneurial instincts of people. As per industry estimates, almost 35% of all franchise buyers are first-timers in business. While earlier franchising was mainly done by people who were already doing some business, currently franchise opportunities act as gateway for fresh entrepreneurs.
The Big Leap
The growing interest towards franchising in India is understandable—as per industry estimates, 90% of Indian start-ups fail within five years due to lack of mentorship and structure, whereas the success rate in franchising is about 85%.