Why are mall developers turning into franchisees? Munish Baldev, CEO and Founder, J S Martin & Co, provides a few answers
In today’s era of growing economy, everyone wants to reach the top and have a slice of the big pie. As a result, thousands of entrepreneurs are nowadays investing in micro and macro industry. One among these developing sectors is real estate shopping centres with investors and developers looking at it as a long-term investment that can also work as a sound retirement plan. Therefore, franchisees have created several opportunities for real estate developers. In the initial phase, shopping centers are expensive – sometimes exorbitantly so – with a cost range of Rs 15,000 - 20,000 per sq. feet.
The Trend and the Future
The trend of real estate franchising has caught the attention of many investors because it works as one of the best revenue concepts. An additional advantage is that it takes only up to about two months to put an investment plan into action. Of course, as with any new business process, there are challenges too. Organised retail is at 17-18% as of now and there are attempts to widen the coverage. The primary concern in this sector is to improve the quality and not the quantity. In addition, the focus has to be on improving the existing infrastructure.
To meet these new challenges, mall developers are changing their mindsets and thinking out of the box, coming up with different destination-based infrastructure ideas and attempting innovation in the use of parking lots as well. Such attempts will, in time, generate a mosaic of organised retail business, thereby attracting many more franchising opportunities.
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