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Jan, 06 2014

Most preferred investment Rs 10-50 lakh

Don't have the tolerance, funds or backbone to generate sales from scratch? Well, then Franchising is the thing for you. The year 2014 holds many bright prospects for the potential franchisees. Franchise experts recommend a bracket of Rs 10- 50 lakh as th

India’s franchising industry is expected to quadruple in the next five years, accounting for almost 4 per cent of India's gross domestic product (GDP) in 2017, according to a report by KPMG India Pvt Ltd. An aspiring entrepreneur gets an opportunity to get directly associated with an established brand via franchising. Year 2014 brings dozens of avenues for such entrepreneurs' right from automobile, F&B, retail, health and beauty, entertainment, education, fashion, hospitality, health care and fitness, clothing, footwear, jewellery and much more. Whatever sector you opt for, make sure you do a thorough research before investing. Always make sure you know what you're investing in by reading company's legal documents, consulting with an accountant and talking to a few franchisees.

Chackochen Mathai, GM  Business Development, Green trends Unisex hair and style salon and Limelight salon and spa says, “Nowadays, we see a lot of aspirants who are venturing into a business and they choose franchising route instead of starting on their own. These investors are mostly from the IT segments because of the reasons like tired of working with an MNC or an IT firm etc. These budding entrepreneurs usually set up a business in the name of their wives and then get to work once they clear 50% of their loans. Their capability of investment would be an investment bracket of around Rs 35-50 lakh. I strongly believe that people who are already running some enterprises/ firms are willing to take risk till about a Crore Rupees.”

Though the year will bring a lot of opportunities with it, still advance study of the market is necessary. How much it will cost to start a venture, franchise fee, plus additional costs such as equipment, supplies, business licenses and working capital, all should be taken into consideration before investing. Actual costs will vary depending on your individual circumstances too. Srinivas Rao, Head- consulting, Francorp adds, “The best Investment bracket for prospective franchisees in 2014 should be somewhere between Rs 10-50 lakh. Since people are getting more aware about the franchise industry and sectors around, the business cycle would surely be leading to higher position every year. Every international and Indian sector is getting advanced and knowledgeable. Year 2014 surely brings great opportunities for budding franchisees.” Talking about the growth of franchising industry, Paul Robinson, motivational speaker and Co-founder, Positive Revolution   says, “Mall culture will soon begin to hit tier II cities and consumer spending will soon spread across to many parts of India. Beauty industry, fabric care and health care will see some growth this year.”

The fluctuating factor

Talking about the current scenario, the trend of working for the same company for 40 years has gone down the line. Most of the private sector employees prefer shifting jobs too soon. This clearly shows that franchising is the current trend and will be for years to come. Any individual with market knowledge and ready to take risk can start a new venture by owning a brand's franchise rights. Be it debutant, emerging or an established one. Like every passing year, this year also, a few sectors will be unpredictable and fluctuating in terms of franchise opportunities and risks involved. Rao of Francorp says, “Education sector can be the fluctuating one, especially the pre-school segment. Since in the pre-school segment almost every second brand is into franchising and they have their presence in every big city of the country so, we generally recommend newer brands not to target bigger cities. Instead go for tier II cities. Pre-school Industry has more brands under its umbrella so, more choice is obvious.”

Investing this year is a brilliant idea but do not just invest thinking this is all the money you'll ever have to spend. Like with any trade, you will have major ongoing expenses also. Adding to this, Mathai of Green Trends says, “According to me this year IT education will not make a big impact. Hair and beauty, jewellery, health and fashion and QSR will be the focus for 2014. The growth rate of the industry is predicted at 30-35 per cent growth.”

Many of the oldest, largest and most successful franchises across the world are restaurants or other food related businesses. As far as other industries are concerned, we are already leading in the multi-billion dollar wellness and beauty industry and many more sectors. So, pick any sector that suits your lifestyle and hunt for opportunities in the magnificent, ever rising franchising Industry this year. Most of the private sector employees prefer shifting jobs too soon. This clearly shows that franchising is the current trend and will be for years to come.

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