North India, with over a population of fifty three crore, holds a huge potential to be coronated as the best and the fastly emerging favourite destination for the franchisors. The influx of various international franchising brands has boosted up the indus
As per research of franchise India, the northern region witnessed a growth of 34 % in 2011 and 37% in 2012 in franchising. It saw a dip of 17 % in the year 2013.
Northern India has always been reigned by the successors like Guptas, Mauryas, Mughals, Sikhs, Marathas and British for the reasons that this part of India is rich in traditional values, fertile lands for agriculture, has cheap labour, historical and pilgrimage centres and many other trading prospects. That is why, today also, in the 21st century, north India remains a hub for the modern business method i.e franchising.
Franchising has now become the core model of business networking and is noted that the majority of the franchising activities occur in the northern states, specially in Delhi and the NCR region. According to a study, the per capita spend in north region is higher than in other states, which attracts the franchising brands to expand their footprints in this part of the country.
Franchising: The preferred route
With the foray of international franchisors in India, a gradual change in expansion strategy of the franchisors has been witnessed as they wish to garner maximum profits. Even the domestic players in the franchising sector have explored north India as their favourite destination for business growth. Also, comprehending to the greater demand of the organised players specially in retail, F&B as a sector have emerged as successful franchising enterprises in north India.
Northern states have a great potential for the untapped market which presents enticing opportunities to the franchisors as well as aspiring franchisees. They are now penetrating into tier- II and III cities offering rewarding opportunities to the business aspirants. The major business players have started from stepping into this landscape and have witnessed great transitions with an enormous rise in the business potential in the untapped region. Today, in the present scenario, north India is definitely leading the franchise trends, with Delhi NCR as the market hub.
A well known north based brand, Mother Dairy Fruit & Vegetable, a wholly-owned subsidiary of National Dairy Development Board (NDDB), is planning to open 50 new Safal retail outlets by the end of this fiscal year in the National Capital Region (NCR) and Bangalore. The brands plans to add 40 Safal stores by the end of year 2014-15 mainly in the NCR cities like Gurgaon, Noida and Gaziabad. Apart from this, it will also add 10 more stores in Bangalore. Presently, the company has 400 such outlets in Delhi- NCR and 30 stores in Bangalore and follows the franchise route for its expansion.
A north India based apparel brand, Chhabra 555 was established 50 years ago as a small saree shop. It has now grown today to become one of India’s top wholesalers and retailers, with the head office located in Chandni Chowk, Delhi. Chhabra 555 has made its presence felt all over NCR as well as various outstation locations in India. It follows organised and systematic operations and keeps on updating their online and offline inventory on a regular basis to improve stocks and categories. The brand has launched outlets in north to south locations including Rudrapur, Sirsa, Aligarh, Bangalore, Patrakarpur- Lucknow, Kapoorthala- Lucknow, Rajnagar, Ghaziabad and others while projects in cities like Gangtok and Delhi’s Dwarka and Karkardooma are in the pipeline.
“Being an influential brand with 60 plus stores, we are thinking of strengthening our expansion and will be going with the master franchise formats for the far-flung areas like Hyderabad & Bangalore so that the process may take place in a more streamlined manner. Our brand is more than five decades old which automatically minimises risks and gives a chance to the franchisor to grow with us,” says Asheeta Chhabra, Head- Business Development, Chhabra 555. Also, the brand is now making an international foray and intends to establish a strong dealership network across selected countries via the master franchisees.
Speed Car Wash is a concept designed and developed by LIV INDIA GROUP to organize the car cleaning segment is a unique mechanized car cleaning concept. Presently, Speed Car Wash has 42 outlets in different cities across India and with its aggressive approach of giving customers the best service of its class has planned to penetrate into the Indian market with all the major metro cities, semi metro cities and small cities.
UMAK Hospitality Pvt. Ltd., a north based restaurant brand is currently operating five restaurant, namely, The Great Kabab Factory, The Spice Factory, Indyaki, Sino Kitchen and Superstars. Brand’s flagship Indian restaurant, The Great Kabab Factory, is operational since 1996 and its overwhelming success has paved for franchising of the brand with its presence of over 20 outlets in India and abroad. Other restaurants of UMAK are The Spice Factory is an Indian speciality restaurant, Indyaki, a confluence of the Teppanyaki style of cooking, Sino Kitchen offering Chinese cuisines and Superstars, serving a concoction of Indo-American cuisine.
“We are currently franchising our four restaurant brands pan-India and internationally. The Great Kabab Factory, with its excellence in cuisine, service, concept and most important its uncompromised commitment to customer satisfaction has chartered its presence across all regions of India from north to south and east to west,” says Ashna Kapur, Vice President, Brand Development Restaurants, UMAK Hospitality.
However, looking at the success of new brands coming up, many franchisors are eagerly seeking partnership to offer lucrative opportunities to potential investors in north India. Among the players who are already present in these states through the franchise route is Cleopatra Salon and Spa. A renowned and Chandigarh-based salon brand, Cleopatra boasts itself to be a pioneer in north India’s first chain of day spas, providing world class services in spas, beauty and skin care, hairstyling, make up, nail art and beauty courses all under one roof.
The brand has been active in the industry for more than 11 years and currently has 10 operating branches in Chandigarh, Mohali, Panchkula, Amritsar, Patiala, Jalandhar and Delhi. According to Richa Agarwal, Founder and Director, Cleopatra Salon & Spa: “Cleopatra is managed efficiently by team of renowned aestheticians, spa experts, dieticians, wellness experts and doctors. We would follow single unit franchise route for expansion and have plans to set up around 15-20 new salons and spas in rest of India by the end of 2015. Our training academy Cleopatra’s Horizon is also among biggest beauty academies in North India.”
Challenges and support
The biggest problem for Chhabra 555 is reaching the inherent unorganised nature of the industry. Chhabra asserts: “Most players do not follow even the basic accounting and reporting norms. Hence, significant efforts are required at our end to get buy-in from all stakeholders including suppliers and dealers for creating transparent systems, which are imperative for maintaining a large network of stores.”
For UMAK Hospitality Pvt Ltd, the increased rentals and real estate have been a serious challenge in the process of franchising. To combat this issue, the brand has launched more restaurant brands, like, The Spice Factory and Sino Kitchen with a lesser project cost that are also suitable for tier-I and II cities. “We have been very successful with The Spice Factory and have already opened its first outlet in Lucknow, and are coming up with many more outlets in Mumbai, Ludhiana and other places,” says Kapur. The brand provides its franchisees with all the training and support to establish and strengthen business network with site review and design, ongoing promotions, operations, HR, marketing and much more.
Speed Car Wash had always believed in knowledge & educating others. “To overcome our challenge, we provide 365 days support to our franchisees from marketing & branding, operations, technical, R&D,” says Jasmeet Singh, V.P.- Channel Expansion Liv India Management Pvt. Ltd, Speed Car Wash.
However, lack of skilled staff and their high emoluments rates are major challenges for the entrepreneurs of India is what Agarwal of Cleopatra thinks. “Currently, we have a flagship outlet in Chandigarh and positioning centres at other places in different parts of north India. We also have plans to set up around 15-20,” she adds.
Therefore, all franchisors and aspiring franchisees pull up your socks to foray into this part of the country’s market to reap the profitable benefits via franchising.
Born in North, National Leaders
Liberty Shoes Ltd : The brand been fashioning footwear, for well over 60 years now, for the style-conscious people around the globe. With the concept of fashion along comfort the company intends to redefine the Indian footwear industry and has been ranked No. 2 in footwear industry in India with a record turnover of Rs 500 crore and selling over 1 crore pairs in the FY 13.
Shahnaz Husain Group: The Shahnaz Husain Group is internationally renowned for organic beauty care, based on Ayurveda, blending ancient traditions with the latest scientific techniques. It operates in more than 100 countries, with a global network of franchise salons, spas, shops, beauty training institutes and over 375 organic formulations for beauty and health
Ferns N Petals: FNP has become the biggest flower retail chain in the world. Havin pioneered the concept of social expression (Flowers and Bouquets) in the country today, the brand boasts of 180 outlets in 72 cities nationwide and delivers across 155 countries worldwide. Started with a single store in 1994 in Delhi, FNP has grown to change lifestyle of the people in bigger cities and smaller towns.
Steelbird Helmets: The brand is one of the oldest and quality product manufacturer of helmets in India having technical collaboration with BIEFFE, world's number one in helmets. The brand is working on all parameters and models of franchising to expand in major cities. It plans to open outlets in tier-II & III towns via the franchise route.