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Franchise 2016-05-27

Tips to start restaurant franchise in 4 simple steps

Indian franchising industry is estimated at $24 bn with an expectation to reach $35 bn by 2020.

By Deputy Features Editor
Tips to start restaurant franchise in 4 simple steps

Franchising has been the most successful mantra to expand the business faster. With just one outlet in the country many brands have grown to 1000 via franchising. And, according to experts franchising has always given quick and profitable return. Indian franchising industry is estimated at $24 bn with an expectation to reach $35 bn by 2020. And, to astonishment over 26 per cent of the franchise owners are women in the country. But before you go into franchising there are certain things which need to be digging rightly to attain a continuous growth:

Know your business inside and out: before getting into any kind of deal understand your model first. No doubt franchising has helped people to build empire but yap it is very risky if not understood well. Many franchisors who give their franchisee to others always have a background check of the people to assure their business is not diluted with other brand.
Dheeraj Gupta who is running vada Pav chain, Jumboking in India has expanded its wings to other different parts of India. “While there may be numerous things we need to get right I think the most important piece is a clear positioning,” added Gupta who created a 100 crore empire in just few years.

Know the legalities: India is very competitive yet sensitive market to invest in. There are quite a few legalities involved in this country. Starting with bureaucracy (Red Tapism), and operational bribes, to getting the right licenses. Apart from legal hurdles and money laundering, which are serious hurdles, commercial agents and other intermediaries need to be paid too. So, one need to be very active to know where he is putting the right money.

Talking earlier to Restaurant India, Sam Chopra at the time of bringing Carls’ Jr, the premium burger chain has faced several hurdles. “There were a few hurdles. One of which was overcoming contractual hurdles. Then bureaucratic and governmental regulatory hurdles posed a serious concern for us. Selecting the right site was another difficulty that we had to overcome, provided the competition we have. Advertising and media campaign was a challenge, initially.”

Calculate your growth: The idea of growth is appealing, but restaurant owners want his or her business to scale at a reasonable rate. Many restaurants think, the new business model may mean expanding coast to coast, even internationally. But, for others it can be adding numbers to the outlet. Sharing about the same, Deepta Gupta of Bikanervala a wide spread Indian restaurant chain which has presence at top cities and highways, pointed, “When someone come to us for franchising we check that the franchisee has owned property and with a minimum worth of Rs 100 crore.”

When a business comes to Mulgannon to explore the potential of franchising, the first thing he does is sit down with them and carefully examine their proof of concept. "Before I start with anybody or take them on as a client I have to do my own due diligence to ensure my eyes are wide open."

Choose the right partner: Getting the right kind of partner is very crucial in any kind of business. Hence, one need to be very particular in screening the right partner. “We look for someone who has a same passion as ours, who is keen to expand our business,” shared Edwin Ng, Owner, MunchSaladsmith Singapore.

And, with exciting opportunities lingering around restaurant business, franchising has really set to grow at a continuous pace. 

Comment
ayushi : 08, Jun 2018 at 04:57 PM
Very useful tips for giving the knowledge of things before buying franchisee in India.
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