South India has something in itself that makes it totally different from the rest of India. Just like its cuisine, South Indian business houses are also growing fast not just in their areas but across the globe too. South India is one of the most business
South India not just has time-honoured brands like TTK Prestige and Naturals but it has huge prospects for the rising brands too. A vital aspect which decides the feasibility of any franchising business in a country, relates to the class of consumers it caters to. India is a multi-ethnic country and people in every state are aware about the avenues best suited for them in any business. Brands like MTR, Malabar Gold, Arvind Brands, Nandita's-TBZ, Viveks, Nalli, and many more are already riding the growth wave in South.
Be it Andhra Pradesh, Karnataka, Kerela or Tamil Nadu, the entire region has lots of opportunities for the burgeoning investors. India's Silicon Valley, Bengaluru topped the list of best business destinations in India ranked on the basis of socio-economic and infrastructure factors, according to a study by Global Initiative for Restructuring Environment and Management (GIREM). Chennai bagged the second position in the same list. It topped in environment, health & safety, healthcare, human capital and getaways. Likewise there were Coimbatore, Kochi, Hyderabad, Mangalore and Vishakhapatnam also on the list. This clearly shows the growth of the southern part of India in terms of business prospects.
Best of the rest regional franchisors
Regional franchisors down south have already made a mark in their territory and now are all set to take their brand to the next level. We spoke to couple of franchisors in the region and have handpicked the brands based on their performance, credibility and number of successful franchisees. Below mentioned are the best performing southern Stars.
UniverCell is one of the leading mobile retailing names in southern India. UniverCell boasts of being the first player in the market to organise the mobile retail segment. Brand's innovation started with UniverCell LIVE and now, the brand has launched the UniverCell SYNC which aims at helping customers understand better, in this age of smart phones.
Green Trends, a mass premium category salon and Limelite, a premium salon, both have a clear cut structure in place with respect to size, interiors; budgets etc. Its total network of salons would sum up to 200+ which are currently in operation. By March 2015, it plans to have a total of 500 salons in operations. The brands USP is world class styling and beauty services. Brand's franchising USP is helping its franchisees with bank loan facility up to 65 per cent of the project cost.
Another brand, Royal Classic Groups' Classic Polo is known for its wide variety of designs, value of money and quality. Classic Polo is a brand with complete vertical integration right from fibre to fashion. It is available in 3500 multi-brand outlets, 70 exclusive brand outlets and 125 large format stores across the country. Usha Periasamy, Vice President - Operations & Brand, Classic Polo informs: “Expansion is going at a rapid pace which we are witnessing from past two years. Our brand has more than 60 EBO's in south. Tamil Nadu has 30 stores and can accommodate another 30 in the next 12-16 months, while target is 150 stores in south in the next 3-4 years.”
Owned by Blue Mercury Apparels (p) Ltd, Blumerq is an emerging brand in men's wear. The brand targets a turnover of Rs 100 crore by 2020. Nandita's- TBZ takes pride in its organic and natural approach toward the beautification, combined with right product and the technique that is their USP. The brand recently launched editable beauty care line which is first of its kind in which the brand is using flowers, fruits, vegetables, old ancient herbs, milk, aroma oil, Indian spices, dry herbs and mud as ingredients of the beauty products.
On the way to national glory
Most big names from south India are already planning aggressively to break the boundaries and reach out with their services to other states and regions as well. Sathish Babu, Founder, UniverCell opines: “While we continue to strengthen our leadership in the metro cities of south India, we are currently focusing more on expanding in new markets like Mumbai and Pune and in the tier II and III regions of south India through franchise route.”
R. Gopalakrishnan, Business Head, Trends Invogue Pvt Ltd - A Group of CavinKare says: “Our strategy for the first half of 2014 is to penetrate to the southern states (Karnataka, Kerala, and Andhra Pradesh) and in the second half we will move towards the north, east and the west regions.”
CADD Centre has a very unique franchise model where the franchisee has the opportunity to earn in proportion to the efforts they put in the business. CADD Centre does not charge royalty based on the revenues because the brand believes that franchisees should benefit from their commi-tment, investment and contribution to top line. With its carefully crafted and executed franchising strategy, it enjoys two tangible benefits, namely multiple access points to customer and distinct differentiation from competition.
Nandita's- TBZ's Chief Executive Officer, Nandita Sharma says: “Hyderabad, rest of Andhra Pradesh, Bengaluru, rest of Karnataka, Delhi, and Dehradun are in pipeline now. Our target is to go slow but steady with proper franchise team and spread our beauty mantra across the globe. We believe in a single and multi-unit franchise model.”
For Classic Polo, Chennai is a potential market and the brand wishes to have minimum ten stores in Chennai in the next 12 months time. The focus area in south is Kerala and Andhra Pradesh followed by east, west and north.
Training and support
Most brands in franchising have adopted different and unique ways to train their franchisees. Chackochen Mathai, General Manager, Business Development, Green Trends & Limelite Salon Brands, Trends Invogue Pvt Ltd, a Group of CavinKare opines: “We are happy to work on multi unit and single unit franchise model. Our franchisees are taken through a rigorous induction program before he/she starts the business with us. We train them on handling the POS software, HR, logistics, marketing and franchisor franchisee relationship training will be provided to them to ensure smooth functioning of the salon operations.”
While Classic Polo prefers giving product, emotional intelligence, soft skill training and much more to the franchisee and sales team at regular intervals to update them about the products. UniverCell provides business related training, which involves setting the store and running it. The brand also provides training for the team who will be interacting with customers on a daily basis. Subsequent to the signing up as CADD Centre franchisee and prior to commencement of the centre, the franchise attends an induction program for four days at CADD Centre's corporate office at Chennai. Trainings are offered on specific CAD products, teaching excellence and corporate culture. CADD Centre also conducts train the trainer program regularly. It tracks the performance of all faculty members of franchisees and puts them into required training program.
Customise to accustom the regional flavour- Challenges
Higher literacy rates, lower population growth rates and high levels of urbanisation offer incredible untapped potential for franchisors in south India but with growth, every brand faces some or the other challenge when expanding out of their comfort zones. When expanding out of south region, for UniverCell, location is a key factor. The brand conducts extensive market research before setting up store. Few challenges for the brand are real estate prices, identifying the right location, modern trade in and around the location, availability of products and its transportation and training the new sales team.
Blumerq is currently operational with 15 EBOs, 314 MBOs and present in all the leading e-commerce portals. L Joseph Muthaiyan, Chief Executive Officer, Blumerq says: “By the end of 2014, we are planning to open ten franchise stores, major focus being on tier II and III cities. Since Blumerq is a relatively new brand, acceptance in the market by our target consumers has been a challenge, which we have effectively worked around with a dedicated and extensive market study, strategic placement and creative promotional activities.” Biggest challenge for Classic Polo was identifying the right size for the best viability. The brand recently unveiled the secret wherein the store expansions are happening faster and the RoI matter is also addressed. Now, the brand has identified 500-600 sq. ft space as the optimum size and a win-win model which has happened after a great struggle and learning. CADD Centre starts its association with an entrepreneur through the single unit franchise model and may progress to a multi unit franchise model depending on the capacity, ability and performance of the franchise. N. Subramanian, Vice President, CADD Centre Training services pvt Ltd says: “We have been looking for candidates with a good attitude towards business and also a passion towards technology. Also, there has been a reluctance to associate with a brand that is not from their state.”
Born in South, national leaders
Many brands that started at the regional level have grown bigger and excelled immeasurably at the national level too. TTK Prestige, a brand that started off from south, now holds presence in 22 states across India. TTK Prestige is the pioneer in kitchenware category. The brand stands for reliability, durability and value for money.TTK Prestige is even stronger in the South as it is the home zone of the brand. With Prestige, franchisees can be rest assured that they can never fail as credibility and the legacy of the brand is very critical for any franchise model. K G George, Senior Vice President, TTK Prestige says: “We are present across 22 states and 275 towns. Our objective is to cover every town with a population of one lakh plus in the next three years and we are progressively working towards that.” TTK Prestige prefers the single unit franchise model as the brand seeks franchisees who will drive the business.
Another brand New York Pizza and Fried Chicken, popularly known as NYPFC has also scaled great heights across India. NYPFC has 75 + outlets and it boasts of being a brand that does not charge royalty, marketing and advertisement fee. Sudhakar Chaluvadi, CEO and Director, NYPFC says: “From the day, our franchise partners sign the agreement with us; we work with them closely starting from site visit to equipment procurement to staff training to material procurement till outlet opening.”
Australian Foods (I) Pvt. Ltd's Cookie Man was launched in Chennai in 2000. The brand boasts of its fresh baked 100 per cent vegetarian cookies. Cookie Man is already present in the entire tier I cities and most of the tier II cities. The brand plans to accelerate its expansion drive in tier II & III cities and cover about 45 cities. Anupam Saluja, Chief Executive Officer, Australian Foods (I) Pvt. Ltd says: "Biggest challenge for us was to change the perception that baked products cannot be eggless. Our products are eggless and 100 per cent vegetarian and we have retained this USP for the past 14 years. Another challenge was effectively managing the cold stock and logistics in the smaller towns. We overcame this, with support from local tie-ups.”
Indian Terrain was launched with a vision to give the Indian Man a “deconstructed look to work”, which believes that simplicity is luxury. The brand opts for multi-unit franchisees due to its many advantages like one account enabling a single point communication and inter store transfers for inventory optimisation. Indian Terrain carries a national presence and for the year ahead it plans to expand its presence in the East market.
Charath Narsimhan, Chief Executive Officer, Indian Terrain Fashions Ltd says: “Unavailability of vantage retail space and brand awareness were the two challenges faced by the brand. To overcome the same we first began by finding the right channel partners for the city / state we were interested in. To overcome brand awareness, we announced the store launch with a mix of an outdoor and print and also worked on direct mailers with local database. This is an ongoing challenge.”