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Dec, 01 2007

In the beginning…

Today, as we complete the 50th issue and step into the ninth year of publication of The Franchising World, it would be appropriate to turn the clock back to the time we began educating the industry about the business format called franchising.

Today, as we complete the 50th issue and step into the ninth year of publication of The Franchising World, it would be appropriate to turn the clock back to the time we began educating the industry about the business format called franchising.

The publication was intended to be launched as Franchise India but was later changed to The Franchising World in order to give it an international perspective since it was essential to have readers and subscribers overseas as well in order to bring to them the Indian business market. Unlike other publications, our focus has always been on assisting entrepreneurs in business start-up and businesses to grow further by presenting opportunities through articles, advertorials, advertisements and the directory.

The initial years were very difficult as, besides being a new publication, we were limited in sourcing of material on Indian franchising. The Internet which was under one service provider was a dial-up connection and the agency was still to expand its distribution network and internet speed. Therefore, sourcing of material from the Internet and emailing to franchising companies was greatly limited. A few companies that had initiated franchising were still not using the concept in the complete sense of its application.

Our very first issue hit the newsstands in December 1999. Also, presented as a Millennium Special, the magazine was positioned to act as the dawn of a new era in the Indian industry. The time was ideal for the release of a magazine that, besides imparting knowledge about franchising, also offered opportunities in the franchising businesses for the Indian market.

The slowdown

Franchising in India was, at that time, limited to being just a business expression and seen occasionally in print media advertisements inserted by some companies that used the format for business promotion. Information-Technology business, mostly in the field of education since personal computers were still new to the majority, was at its peak and many companies floated advertisements seeking franchisees without actually in the know of running the business in that format. Many fly-by-night `franchisor` sprang up overnight in the I-T field hoping to make a quick buck by outsmarting gullible investors. That was the time when franchising, or what was little known of it in India, had its fair name sullied after the word was usurped to become a tool in the hands of scrupulous elements` money-making ways.

By the turn of the century, there was a slowdown in the world economy and the I-T bubble burst grinding businesses to a halt. Advertisements became limited and job openings, which once ran into 10 pages in dailies, were reduced to just four pages. As advertisements became scarce, franchising was pushed into the background with survival of the magazine becoming a subject of concern.

Our maiden venture into publication as a niche magazine became unstable: no business, limited advertisements, unsure subscribers. However, despite losses we continued our effort to educate the Indian businesses on the principles and advantages of franchising. After a couple of years of transgress, the economy gradually began to show signs of recovery. International players too took the risk to step foot into India.

Growth of franchising

When we stepped into the franchising industry in India, the companies that had initiated franchising were limited and some preferred adopting the management contract or JV routes. A few companies like NIIT, Shahnaz Husain, Archies, Chawla Chicken, CADD, Ferns `n` Petals, Liberty, Habibs, VLCC and STG were already adopting such methods as a means of growth. The responses these companies received for franchisees were very less. International players like Lacoste, Reebok, Wimpy, Pizza Express, Domino`s, The Fourth R, LCC Infotech, Boston and Hallmark were vying for a slice in the Indian market. McDonald`s entered India in 1996 in a JV with Vikram Bakshi`s Connaught Plaza Restaurants in New Delhi and Amit Jatia`s Hardcastle Restaurants in Mumbai. Though McDonald`s has a chain of franchise restaurants internationally, it has not opened any franchisee in India.

Only when global majors began initiating franchising and inviting Indian investors in a tie-up did franchising begin to take off. Initially, fear of loss of money was writ large on the investors but hesitance slowly turned into risk-taking and eventually confidence in the system.

The liberalisation and globalisation process, introduced by the Indian government in the early 90s, also contributed largely to the growth of the industries in general and franchising in particular. Today, we observe small as well as business majors seeking to use the franchising way of business growth in India.

Dampers in every system and country, be they politically motivated or by default, are natural. The process of globalisation started in right earnest by the government in the 90s progressed into letting 100 per cent foreign direct investment in Indian retailing. But FDI in retailing hit a wall by 2005. The fear of global players eating into small Indian retailers` businesses became an issue among political parties. Though FDI was allowed in certain categories of businesses, it is still limited to only 51 per cent in single brands outlets.

Whether the fears are ill-founded or not, the immense progress that the retailing sector has made in these few years are exemplary enough as to what the Indian Industry can achieve, be it 100 per cent FDI or no FDI. Fears lead to reworking on the business models and that`s what Indian businesses did. Small retailers are already in the process of upgrading themselves taking a cue from the international business models and the technology they carry. Wastage in the agriculture produce is almost 10 per cent of the agriculture component of the GDP. In order to offset this wastage, farmers are already dealing directly with retail majors and receiving handsome returns or have initiated their own association to deliver directly to the consumers.

Growth of magazines

Initially, we started the magazine as a quarterly but, observing the response of the readers and the industry, we graduated it to a bimonthly in January 2001 and finally became monthly from March 2007. Our focus has always been on business promotion through franchising, imparting knowledge about franchising and offering opportunities in the form of a national and international directory, promotional features and through advertisements. In June 2001, we introduced The Retailing World as a supplement and an edition within the Franchising World. This was for the first time in the country that retailing was published as a separate entity. The section became an independent bimonthly magazine in February 2006. Alongside, we also introduced sections like MarketPlace India, International and Home Based business, which were later discontinued and amalgamated as a part of the main magazine.

Today, the economy and the franchising industry have grown to a level that we, perhaps, did not envision in the beginning. This is primarily the result of the rapid entry of international players into India, the government`s effort to open business to foreign players and the coming of a new generation of entrepreneurs ready to take risks and determined to make a place for themselves in the world of business.

We, on our part, were but initiators and motivators. The new generation of entrepreneurs have done the rest.

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