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About Franchising

Franchising is the practice of using another firm's successful business model. The word 'franchise' is of anglo-French derivation - from franc- meaning free.

Technically, franchising means - the rights of privilege granted.

For the franchisor, the franchise is an alternative to building chain stores to distribute goods and avoid investment and liability over a chain. The franchisor's success is the success of the franchisees.

The franchisee is said to have a greater incentive than a direct employee because he or she has a direct stake in the business.
Things that makes Franchising fantastic:

Capital Raising
Human Resource mobilization
Brand Equity
Training

Franchising as a tool to Growth

Key elements of franchising

• Rights to a Name, System and Know-How
• Owner / Operation of outlets by franchisees
• Duplicating a Proven Business System
• Network Growth
• Ongoing Development of Brand

What is required ?
• Invest in Systems • Invest in Brand
• Maintain Standards
• Be sophisticated in business practices
- Good record keeping
- Good reporting and IT systems
- Good compliance systems
-Professional’ in dealings
Business model + Distribution strategy

• Employee
• Agency
• Broker
• Dealer
• Partnerships
• Cooperative
• Licenses
• Franchise
• Joint Venture


Franchising

•A way of carrying on business
•Independent business owners to be part of a network
• Defined way to supply the services.

Structure
• Single unit franchise
• Master franchise
•Area developer franchise
• Multi unit franchise
Competitive Advantage of Franchising
• Independent business owner/operators
• A greater level of commitment
and accountability than employees.
• Simplest way to raising funds
(w/o parting ways with equity)

Franchising the Ultimate network

What do Coca Cola, Pepsi, Shell, BP, Mobile, Ford, General Motors, Toyota, McDonald’s and KFC have in common?
Franchising created the worlds biggest brands by:

• Sharing vision, ideas, knowledge and process
• Creating systems for franchisees to develop profitable businesses

In Australia
• 1160 franchisors and 79,000 franchisees together generating over $146 Billion in revenues
• 4,72,000 jobs
• 26% growth since 2000
In the United States
• In 2019 only, 7,73,603 established only in United States. 30% out of these only F&B Franchisees.
•787.5 Billion US$ Revenue generated in 2019.
•11 Million jobs
• 20% growth since 2007

Franchising in India: Emerging trends

Grown from a questionable and not so acceptable format to a readily admissible way of business expansion in the country
The pioneering companies have shown franchising can work in any country
Brought a graphic change in over all working of the country’s business
Technology & internet are helping at both ends:
    to create the awareness about new product & services, and
    helping to serve the consumer better leading to fast proliferation of worthy concepts & products.


Snapshot: Industry growth

✓ Franchising industry growing at the rate of 40%
✓ 200 Home Grown Franchisors & 2,50,000 Franchisees (growing entrepreneurship)
✓ 85% Success rate vis a vis 90% failure in self start up
✓ Industry of over US$ 20 Billion
✓ Remains the best entry & expansion strategy
✓ Small format businesses are key economy drivers
✓ Employs over 10 Million employees directly / indirectly

Education - The sector is expected to reach US$ 1.96 billion by 2021 with around 9.5 million students. Total US$ 3.24 billion FDI Comes in Indian Education of total FDI.
Retail - Retail industry reached US$ 950 billion in 2018 at CAGR of 13 per cent and have reached US$ 1.1 trillion by March 2020. It accounts for over 10 per cent of the country’s gross domestic product (GDP)
F&B – Indian F&B Industry will be touched 51000 Thousand CR business in 2021, Only Mumbai & Delhi will contribute 20% of total revenue.

Features of Indian Franchising Industry

Over 250,000 franchisees currently

3 Trillion Dollar Industry across the Globe.
5000+ Business Listed Every year for Buy/Sale in India
20 Billion Dollar Opportunity
Only 10% of the businesses are franchised as compared to 70% in U.S.
1 Million+ Business Brokers only in India

Testimonials

Frequently Asked Questions

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