Franchising 2019-07-04

Ultrafresh: Franchising To Glory!

The franchising industry constituted nearly 4% of Indian GDP by the year 2017

By Features Writer
Ultrafresh: Franchising To Glory!

The franchising model is a key area of growth for Ultrafresh. It is a proven success formula for emerging and smaller businesses to grow into large-scale business chains. For aspiring businesses, franchising gives the kind of growth and profitability that they can’t achieve with company-owned outlets. A number of small businesses have gone on to become major national and international level players in industry verticals ranging from food products to restaurants to hotel chains etc.

It is this incredibly beneficial nature of the franchising model that has seen astonishing growth in the last ten years. A recent report by KPMG and the Franchising Association of India revealed that the franchising industry has seen a four-fold growth in size in the last six years itself. This stunning growth has also created 11 million new jobs. As per estimates, the franchising industry constituted nearly 4% of the Indian GDP by the year 2017. Thousands of domestic and international brands including some of the top multinational retailers are now reaping the dividends of the reliable franchise model.

There are numerous advantages offered by the franchise model of business:

  • Franchise partnerships help the business grow rapidly across geographies.
  • Rapid growth of outlets at multiple franchise locations also enhances the brand recall and recognition tremendously.
  • There is an added impetus of the capital invested by the franchisees and the passion as well as commitment they bring to the table as owner-operators.

However, these benefits don’t mean that franchise model is a fail proof formula to business success. To become successful, a franchise model has to overcome certain challenges and achieve pre-set goals.Thousands of franchises are successfully creating wealth every year and emerging as successful brands with a national presence. Courtesy of its potential to propel little known brands into major corporates; franchising steadily appeals scores of businesses aiming to get a slice of the wealth and growth pie. Once a business is deemed qualified to operate as a franchisee with the required capital and other requirements in place, it will get the opportunity to make use of an existing location and business to design and run a franchise programme.

Another thing that must be focused upon apart from successfully building and developing a replacement franchise is to pay attention to five essential elements of success:

  1. to have multiple company locations;
  2. adequate working capital;
  3. competitive and franchise sector analysis;
  4. business and leadership acumen; and
  5. a strong operational foundation.

Done rightly, franchising proves to be immensely beneficial for both — the franchisors as well as the franchisees.

The first benefit for the franchisors is that they are able to use others’ cash to fund their business expansion and grow faster than they could have by using their own resources or through business loans, or investors. The franchise fee and the royalty franchisors receive allow them to run the management completely according to their own strategies. Thus, they don’t have the added pressure of being answerable to investors or repaying the loans. The fees and royalties earned are to fund operations at their headquarters, on training and supporting the franchisees, conduct marketing and advertising, improve the products and services, and making a bigger brand presence in the market.

Franchisees also have a number of advantages in this model of business. Their probability of success is higher compared to going ahead as a sole proprietorship. There is less time required to plan and launch the business as it is an already established brand. There are numerous other benefits like lower entry costs; availability of a successful business model; national and regional advertising support; lead generation support through franchisors’ websites; centralised decision centres; as well as a network of fellow franchisees. There is a cohesion in terms of recommendation and ethical support through a centralised data network, annual conferences and interactions with other franchisees.

In Conclusion

Franchising is an ideal growth model for emerging brands like Ultrafresh that aspire to grow exponentially without letting funding concerns create a hurdle. For companies that have a proven track record, quality products and services to offer, franchising is surely a fantastic opportunity to create wealth for themselves and their franchisees.


This article is written by Dhruv Trigunayat, CEO, Ultrafresh India

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