The 8th edition of the large-awaited Master Franchise Show gave directions to national and global franchisors and high net-worth investors (HNI) on how to build a successful master franchise model and develop multi-unit operations, which stand the disruptive future trends
Presenting unrivalled national and international business opportunities, Master Franchise Show 2019 enthused the audience and exhibitors alike with gripping ideas and knowledge transfer on emanating trends in franchising.
Held on June 22-23, 2019, at JW Marriot Hotel in New Delhi, the Master Franchise Show was a huge hit with over 2000 HNIs visiting the event. In its 8th edition, MFS is widely recognised as the most premier event in master franchising, which attracts the most successful brand operators, global brands, and service providers across the industries. Organised by Franchise India and FranGlobal, the show aims to assist high net-worth investors (HNI) and corporates in identifying low risk and high reward business opportunities.
While day one of the event focused on networking and exhibition with over 200 national and global brands exhibiting their innovative business models and prospects, the second daywitnessed the Franchise Knowledge Series running parallel to the exhibition.
The Franchise Knowledge Series started with the keynote address from Rich Maloney, Founder & CEO, Engage & Grow, on leadership of tomorrow. The world renowned mind mentor and business coach highlighted that 87 per cent of the workforces are disengaged, which means that they are not doing their job or being disruptive to the organisation. For every disengaged employee in your business, you are throwing away $34,000 in lost productivity for every $100,000 you are paying them. This also stands true in franchise management, where brand’s reputation and business are on stakes.He mentioned that group activation techniques are essential for workforce and franchise engagement. “The group activation starts by focusing on three areas of your business:systems, behaviours and culture. Then, engagement keys are developed which are aligned to your focus areas and customised for every business and employee. Regular tracking and reporting of engagement keys per employee create a transparent and accountable environment, which leads to workforce engagement.”
Speaking on franchise growth strategies, Bharath Uppiliappan, CEO, India Business, Dr Lal Pathlabs, said that it’s crucial for a brand to understand the franchise operations and challenges at the local level. He highlighted that the largest barrier in scaling a franchise is delegation of tasks: “Many of the smaller brands find it difficult to scale as the promoters don’t want to delegate decision-making tasks. However, they need to start delegating tasks at an early stage of growth.” He further added that brands must identify frontline people in its franchise ecosystem to develop and promote them for higher responsibilities. Besides, establishing few COCO units is essential so that franchisee may understand the model and replicate it in their own business.
Rajat Wahi, Partner, Deloitte India, apprised the audience on the factors to be considered before diversification. He stressed on weighing strengths of the current brand equity that can it be leveraged for other categories or price points. “Brands must verify the competencies that can be leveraged for the brand diversification, like people, processes, technology, supply chain, manufacturing etc. The most important part is to assess the market potential of the new category, complexity involved and is there a logical fit for the new brand with the existing brand.” He further added that having right processes and stable business model is crucial before a brand even thinks to expand.
Speaking on developing a realistic business plan in the finance master class, Vikrant Tomar, COO, Ice Cream Labs, mentioned that for a franchisee, it’s important to verify the financial health of the brand before getting into a partnership. “It’s crucial to study franchisor’s income, expenditure and historical data including growth rate of franchise network, preliminary franchise fee and scope of services delivered to franchisees. Franchisor’s financial data can be utilised as the base to build a universal model showing the general financial aspects of any franchisee business. This data can also be used to forecast financial results for your specific market.” He also suggested brands expanding in India to be realistic and consider that franchisee’s RoI period should not extend unreasonably or lead franchise business to incur losses, while calculating the franchise fee.
The conference concluded with an interesting session from Shivendra Kundra, Founding Partner, Kundra & Bansal, on the importance of a legal agreement in the long-term brand-franchisee relations. He highlighted that in the absence of dedicated law on franchising in India, a detailed and well-thought legal agreement has huge significance. It must include elements like development schedule, royalties, location demarcation and non-compete clause. “Dispute resolution is the most important part of the agreement. Many people don’t think about dispute resolution clause before getting into a partnership; that’s a reality. Moreover, franchisees of global brands must ensure an India-based arbitration, as in most of the cases the expenses incurred in foreign arbitration are higher than the value of the dispute.”