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Jan, 06 2016

5 challenges you should overcome to enter India

Globally franchisors have indentified India as a key market to expand.

Prior to have operations live, brands have been facing several challenges that require a transformation now. Among them are the following five. Let us learn about the hurdles that are coming in the way of international brands & expert views from the brands that have already entered as they consider these hurdles as commas and not a full stop.

5 steps to become a Maid2Clean franchisee in India

  • Purchase a protected, exclusive and generous Area Developer territory license
  • Launch Brand in India
  • Study the Maid2Clean proprietary systems and methods for localisation
  • Localise the Maid2Clean service offering in India
  • Exercise the rights to sell Maid2Clean Franchise Licenses throughout the Area Developer Territory
  • Police the rights to use the Maid2-Clean trademarks, service marks and other commercial symbols

Franchising is two decades old in India and can begin with virtually no compulsions on franchise regulations or franchise registration unlike other countries. A foreign franchisor need not be a billionaire for expanding across Indian borders. However there are a set of challenges that a foreign franchisor should be able to foresee.

1. Real estate challenge

Securing quality space is one of the biggest challenges, international brands face in India. The rentals are high for the location that can tap a good clientele. Sharing a word on how the brand meets this challenge; Marks & Spencer shares, “Our property team works hard to ensure that we are in the right strategic locations to best serve our customers in India. We have also ensured that we have the right formats to capitalise on the growth opportunities in the market, so, for example the lingerie market presents us with an exciting growth opportunity and our smaller lingerie and beauty store format with a smaller store footprint allows us to access prime shopping locations. Through Myntra and Flipkart which now offer M&S products online, we have also been able to extend the reach of our brand.”

2. Running pilot operations

International brands usually opt for pilot franchising as a test model to determine whether the products or services will be able to garner a response in the industry. Sharing a word on the challenge, Maid2Clean is facing in India, Mike Hanrahan, Managing Director says, “Ability to run a pilot system for the network is a challenge in the Indian market. We are seeking articulate, tenacious and hard working area developer investors for India.”

3. Unorganised players

The Indian market is not mature enough to accept small segment business with ease. Besides this, unorganised market remains a headache for the players as they find it difficult to run the business smoothly amid a large number of unorganised players.

“The main hurdle we find is the business sector here is yet to fully recognise that smaller companies can offer best practices and best pricing on meeting the commercial and domestic cleaning needs in India,” feels John Howard, Vice President, International Development, Chem-Dry.

4. Business ethics

The brands seek good interpersonal, influencing and social skills when it comes to selecting right business partners in India. Lengthy business procedures and inspections at different levels harm the business prospects. Though the centre government has taken a few steps in regard with ease of doing business but still a lot is needed to be done in this aspect to boost entrepreneurship. “There are no country wide standards and regulations in India. There is a lack of skilled trainers here,” adds Cathal Kiely, Managing Director, UTime Fitness.

5. Skilled workforce

Ability to work alone and lead a team coupled with sales experience is what the brands feel is lacking in India. The entrepreneurs are enthusiastic to partner with the brand, but when it comes to delivering the product or service, they lack the right business judgment to recruit skilled workforce.

However challenging it may seem, if the brands are loyal towards their franchise partners and are willing to assist them in expansion by rendering proper training systems, operational support, assistance for marketing launch and audits; the hurdles may be overcome.

Several brands are also opening their educational institutes for creating a large pool of skilled people so that they can do away with the problem of attrition and lack of trained people. Beauty and salon players are the best example in this aspect.The Indian government has also started Skill India programme for the same.

Opportunity galore

  • Chem-Dry is seeking Regional Master Franchisees in Bengaluru, Mumbai, Delhi, Ahmedabad and Hyderabad.
  • Maid2Clean is looking for Area Developer Investors in all tier I & II cities in the next 3 years
  • Utime Fitness, Hong-Kong based fitness brand is seeking franchisees across India to develop the brand here. After opening a minimum of 2 stores by master franchisee, the brand can be sub franchised further.
  • How to become UTime Fitness master franchisee?
  • Master fee: Rs 45 lakhs for 10 units to be opened across India over 5 years
  • Signature store
  • Area: 10,000 sq ft
  • Investment: Rs 3-4 crore
  • Concept store
  • Area: 4,000-5,000 sq ft
  • Investment: Rs 1-2 crore
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