How India has become an opportunity for worldwide franchises?

  • by Amandeep Saluja
  • July 28, 2020

With a population of more than 1.3 billion, India has become a destination for franchisees from all over the world. From the big towns to the smallest of cities we can notice brands from across the world making their footprints in India. KPMG and Franchise Association of India (FAI) recent report shows the Indian franchise industry valuation at US$50.4 billion a record growth of four times since 2013. Credit for this bulk growth goes to the working professionals particularly those from the IT industry who have opted for the franchising model to entrepreneurship in recent years.

India in the future is assured to become the third-largest consumer market just behind the U.S. and China with the consumer spending anticipated to grow from US$1.5 trillion at present to nearly US$6 trillion by 2030. The tally of “ultra” high-net-worth individuals (HNIs) is also expected to become two times to 330,400 surpassing the total assets to US$300 million by 2022. Increased HNIs offer greater chances of survivability to the franchising ecosystem.

The Franchise offers a great opportunity to the Indian people. About 35% of franchise owners in India are the first-timer. It is a gateway for the people looking to go to the route of entrepreneurship. Also, the success rate of people entering the franchise industry is 90% much more than the other Indian startups. It also offers employment to the people as every franchise store needs a staff of 5 to 30 people. Job creation from the franchise in India is roughly at a figure of 1.5 million.

India has about 4,600 active franchisors just behind the U.S. with about 200,000 outlets managed by close to 170,000 franchisees. Some of the successful franchises in India include Anytime Fitness, Baskin-Robbins, Burger King, ChemDry, Domino’s, Dunkin’, Gold’s Gym, Johnny Rockets, KFC, Krispy Kreme, McDonald’s, Pizza Hut, RE/MAX, Subway, and Toni & Guy. Domino’s with 1250 stores in India is one of the most successful franchisees here and acts as a role-model to other international brands. The Indian diaspora living in North America, Australia, and the U.K have brought brands from these places to India through the master franchise arrangement.

But still, there are some challenges that the franchise model faces in India. The Government of India has not acknowledged it as a small-business facilitator. There is a lack of comprehensive franchise law instead there are different central and state laws on it. India being such a diverse country it sometimes becomes challenging for international brands to understand the local culture, tastes, and “Indianization” of the products.

Experts think that even with such growth in the franchising industry, there are still realistic targets to achieve in the coming years.

Facebook Comments
Amandeep Saluja

Amandeep is a Co-founder & Business Development Executive at TSD Networks. Contact at 'amandeep@tsdnetwork.com'
  • linkedIn