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Franchise 2018-09-21

5 Factors Why Restaurant Brands Choose Franchising

The figures of total franchising industry is believed to have reached $ 24bn.

By Deputy Features Editor
5 Factors Why Restaurant Brands Choose Franchising

With quick returns and profitable business ideas, food franchising has always tempted great investments in India. And, today it contributes 28 per cent to Indian franchise industry ahead to world which is an average of 22 per cent of $3.95 trillion global market place of franchise industry.

Franchising these days is not limited to QSR and casual dining restaurants but fine dining spaces are also eyeing franchising as an option to expand their concept. In addition, today several leading global franchise companies, such as Dominos, McDonald's, Yum Brands, Baskin Robbins and Subway, have already established a presence in India. Franchise industry is expected to benefit greatly from government support across various sectors through various measures including foreign direct investments (FDI) in single multi-brand retail.

With restaurant franchising gaining momentum and finances coming from all corners of the globe, the industry can expect a hefty growth of industry in coming years.  According to a report by Francorp, “The Indian franchise industry is expected to grow 30 per cent on yearly basis. The figures of total franchising industry is believed to have reached $ 24bn and focused to touch the $ 35bn mark by 2020.”

Here are five main reasons why franchising is attractive to maximum people:  

Asset Light–A franchisee model is asset light and help brands focus more on the product and its quality. Hence, it is a good business to invest in.

Scalable – The model is highly scalable as brands are banking on expertise of product and process and letting the franchisee manage the store operations.

Local Area Knowledge - The key to success in the QSR business is to get the location right. For this local area expertise is of paramount importance and which is what the franchisee partner brings to the table

Focus on Product and Process – This model helps restaurants to channelize their energies on the core aspects of the QSR business - product development & process innovation. Consumer experiences revolve around the product and franchisee experience revolves more around the process.

Branding, Marketing and Distribution– Restaurants have taken cues from several global food brands and have studied their success and business model of expansion. They harbor similar global aspirations and hence want to channelize their energies on product development, branding, marketing and process innovation to rapidly scale in India and overseas.

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