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Jan, 16 2010

Franchise market outlook 2010

In the last 11 years The Franchising World has made its indelible mark in the franchising industry as the first franchise magazine in India to present top industries and new formats in the franchise domain and extend knowledge-based articles and features

In the last 11 years The Franchising World has made its indelible mark in the franchising industry as the first franchise magazine in India to present top industries and new formats in the franchise domain and extend knowledge-based articles and features to educate the entrepreneurs.

Though, a business format developed and dominated by the West, franchising today in India has witnessed many Indian brands adopting the franchising route for expansion giving confidence to international brands to enter the country. The downturn also failed to dampen the entrepreneurial drive of the Indian mindset, leading to open discussions about franchising and the various routes it offers for businesses, thereby gaining prominence in the sub-continent.

In 2008, franchising made a mark in the world of cricket with celebrities and business tycoons franchising the IPL. In 2009, the company that indigenously developed the electric car, Reva, franchised its manufacturing to other countries. Almost every sector and category in the industry relates to the enriching world of franchising through direct or indirect means of growth. Tomorrow, more industries will find franchising as a larger growth potential than what it is today.  

India is a growing market and has immense potential for new concepts which are being launched in today’s market. Franchising is being looked upon as the right investment option. Still, a lot needs to be done and desired on the franchising front. Indian franchisors need to be more open towards funding their franchisees, and banks, on their part, need to assist franchisors in extending loans. Indian franchisors will have to give more preference to intelligent entrepreneurs who really work for the system and stop having only investors in their franchise organisation.

Even retail majors are putting in extra effort to grow via the franchising route. A major change has been observed in the retail sector. Big retailers have the power to buy out small ones and small retailers cannot survive amidst huge pressure and do not have the funds and technology to support their business.

The next five years anticipate $30 billion fresh investment in modern retail which will show an impressive Compound Annual Growth Rate of 40 per cent. With such a growth rate, the market is expected to reach $535 billion by 2013. The growth of organised retail will be driven by the franchising model in the future. India's franchise segment is growing at 38 per cent annually with the market size, currently valued at $ 7.2 billion, expected to touch $ 20 billion by 2013. There are 1,200 active franchise concepts and over 1.1 lakh franchisees at present in India.

Franchising follows a people-centric approach by positioning the entrepreneur at the top of each business entity that derives success. Without the right franchisees franchising cannot succeed and franchising can further open more employment channels. Franchising does not ask you to be a pro in any field as it teaches you to run a business even if you are inexperienced. Franchising, in a way, is for a person like you who can make the best of the situation they are in. Franchising, though driven by visionaries, is taken forward by franchisees who become partners in that vision. The coming year gives an open invite to everyone to join in. Those who have the courage to think loud with a new concept and experiences success from scratch will be the visionaries, and franchisees will join the mission.

In our present Special Issue a number of consultants, lawyers and franchisors share their experiences and voice their opinion on the present and future conditions of the Indian franchise industry. It is the right time for India to be looked upon as the most emerging market for franchising.

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