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Nov, 20 2009

Credibility key to strong enterprise

India is a country of variables with its diverse culture, language, business acumen, etc. Till recently, the pan India mantra was primarily a prerogative of international or large domestic corporations. The SME entrepreneur was mainly acting as a supplier

India is a country of variables with its diverse culture, language, business acumen, etc. Till recently, the pan India mantra was primarily a prerogative of international or large domestic corporations. The SME entrepreneur was mainly acting as a supplier (not brand owner) to either an established multi-level distributor channel or traditional retailer/s.

Globalisation witnessed a vast array of western brands acquiring a large brand space in the Indian market with fair amount of ease, with franchising being a major enabler, acting as an effective way of countering challenges coming with local/diverse culture and ways. Today, franchising is one of the most dynamic expansion systems in the current scenario.

Indian franchisor/franchisee has gone through different phases of being:

  • Apprehensive
  • Curious
  • Affirmative

Especially in the past decade, the Indian entrepreneur could not have ignored the effectiveness and applicability of franchising to their individual business expansion goals.

The Indian franchise industry, however, shows a unique sector-wise distribution map unlike any other in the world, where education is the most franchised business, with our population, cultural dynamics and economics supporting it.

The success of franchising has made a profound impact on SME over the last couple of years. Entrepreneurs today are looking beyond growing organically and are keen to focus more on their core technical areas.

There, however, are some innate questions of potential threat to the brand reputation, control on the business/service delivery, management of the franchisee, intellectual property transfer and countering the limitation of management bandwidth of the franchisor.

Though an emerging franchisor has many comparisons and competitions before him, we need to be careful about the fact that India is still in the early stages of its overall franchising cycle. Therefore, it is advisable that a budding entrepreneur should conduct and invest in R&D and at the same time, approach their franchising business with fresh and confident approach of making an enterprise of their business through franchising.

The franchisor should critically examine following indicators for their business and take corrective measures to build a complete franchise-oriented development programme.

  • Credibility
  • Refined and Successful Prototype Operations   
  • Market Trends and Conditions
  • Differentiation  
  • Documented Systems  
  • Capital
  • Transferability of Knowledge
  • Affordability    
  • Commitment to relationships
  • Adaptability     
  • Return of Investments
  • Strength of Management

The Indian market is responding encouragingly to the concept of franchising and emerging franchisors have the opportunity to expand their business methodically through franchising by connecting with willing entrepreneurs.

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