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Oct, 22 2009

Services at your doorstep

Service businesses are in a huge demand, owing to the various benefits they provide. Simultaneously, there is a great scope for growth in the business segment of consumer services. TFW samples some industries offering low cost franchise options in consume

Consumer services basically refer to various speciality services such as travel, matrimony , pest control or dry cleaning services. Primarily dominated by the unorganised players, consumer services sector is on the way of getting organised, making this sector niche and consumer centric. Another major factor attracting to a lot of entrepreneurs towards consumer services is its low cost model. These factors jointly have led many franchisors to step into the consumer services industry to turn this less competitive, low cost opportunity into high return proposition for themselves and their franchisees.

Travel & matrimony

The lowering of air fare, higher disposable income of the middle class and increase in the frequency of business trips are a few factors boosting the Indian travel industry. The entry of international players besides the Indian franchisors has made the industry more organised, making it an attractive option for the franchisees. The major players offering such opportunities include Thomas Cook, Cox & Kings, Raj Travels, SOTC, Prime, Travel Tours, Uniglobe Travel, VIA, TravelPort, and Most of the travel companies have their online presence besides their offline centres, thereby, providing the customers an ease in choosing their offers.

The same is true with matrimonial portals as most of them such as, Bharat Matrimony and had a huge client base owing to their online ventures before they had set up their offline centres. Regional matrimonial portals like are also venturing into offline segments taking franchise route. Their franchisees also get benefited by the brand value as their customers already acknowledge the brand. Franchisees need to spend less on local marketing which further lowers the cost incurred by them.

Dry cleaning

Dry cleaning service is another low cost option which the consumer service industry offers. Though this sector is primarily dominated by the unorganised players, the franchisors like White Tiger and Wardrobe have come up with their concepts using latest technology to change the entire customer experience. Dr. A. Srivastava, Executive Director, Wardrobe said, “The local players lack in international quality, practices and technology and thus, are becoming more price focused rather than quality. The mass market is unaware of the modern technologies that the delicate fabrics require for a good life and to maintain its sheen. So to promote our brand while beating this competition we are providing quality service with a wide network at competitive prices.”

The business of dry cleaning and laundry has a complex back end but a very simple front end. Unlike any other garment business there are no stocks to be stored, no demand and supply issues, no effect of change in fashion and no credit to the customers. Even the area required for the outlet is just about 150 sq. ft, which contributes towards low investment. “Complete supply chain besides marketing and advertising are handled by the company itself which makes it a hassle free business for the franchisee. This provides an advantage to Wardrobe in penetrating faster,” added Srivastava.

Low cost franchising

The initial sum that the franchisee pays to the franchisor is higher than what it would cost him had he started on his own, but that is negligible in comparison to the support and training he gets from the franchisor. Further, the pre-requisites of the consumer services industry lower the recurring cost as the franchisee needs small office space, very few employees and resources to get started. However, a passion to serve is a must to succeed.

All the above mentioned players have made inroads taking franchise route, providing a low cost option to those who are keen on serving consumers. Talking of the importance of low cost franchising, Arun Varma, Prime Travels said, “Low cost franchisees are ideal for startups in Indian socio-economic scenario, as entrepreneurs do not have large pool of funds to invest in the process and systems.” He further informed that the company adds one franchise outlet every month in order to tap more consumers. Being a low cost franchise model, it’s more popular in small and big towns rather than the metros. Gopinath Nair, CEO, Travel Tours reiterated similar views saying, “We believe that franchising is a sensible and cost effective method to spread your brand and services, especially in tier II and III markets.”

Guidance & support

Wardrobe provides its franchisees with a complete technical know-how of operations, fabric and cleaning knowledge, complete IT training and logistic support, day-to-day management and supervision, outlet furnishings and branding, on-the-job and on-site-training, BTL activity planning and execution with mass media advertisement support. Talking of the training that the company provides to its franchisees, Rajeev Sekhri informed, “Regular training is imparted by way of induction training, soft skill training, technical training, refresher training in the registered office and in the plant.”

Travel Tours too offers complete product and destination training besides operations related training. Prime Travels too have a comprehensive training programme. It also initiates new releases, ongoing PR programmes, advertising, promotion and marketing besides research and development for regular quality updates to further facilitate its franchisees.

Word of caution

Being low cost, the entry barriers are low in this field but consumer services are not everyone’s cup of tea, as a knack to serve customers day in and day out is a necessary pre requisite for the one who wants to make profits in this segment. Low cost franchising has its own advantages. Having said about the complete back end support, international brand and quality and of course attractive and fast returns, the franchisee always needs to choose the franchisor judicially. Also a thorough check on the quality of service is a must as you are not selling a product but service, therefore, the quality of service cannot be diluted.

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