• Sept 2018



“The business model should evolve as per the needs of the market as routine business operations create fatigue for a franchisee.”

Any business, to look at it from a long-term perspective, has to be sustainable while being profitable. And when it comes to franchising, what are the key ingredients of success? There are several, as below:

Product: The franchisor needs to have strong, differentiated product that can fulfill a customer’s need or demand. Prototype: It’s very important to have a profitable prototype to replicate before getting into franchising.

Margins: There is a strong need to have margins, making both franchisor and franchisee businesses viable. Capitalization of System: Both franchisor and franchisee should be adequately capitalized to support the business.

Investment in Relationship: Franchising is highly interdependent; hence, it’s important to have a strong bond with a franchisee and to provide continuous support.

Innovation: There should be continuous innovation from both. Reinventing the Business Model: The business model should evolve as per the needs of the market as routine business operations create fatigue for a franchisee.

Training: This is highly important and but mostly ignored by franchisors – the inputs via training should be continuous.

Building on Quality Franchisee: The franchisor should find an investor with the right intent. This is critical to ensure longterm growth.

Defining Roles: Both parties should be crystal clear about their roles like marketing, training, recruitment, etc.

Choosing the Right Location: To succeed in a franchising business, selecting the right location plays an important role. To choose the location, regional analysis is needed. For this, a franchisor should establish a target group and assess competition to find gaps.

Excellent Team: The franchising system needs manpower to support franchise operations – for which the right skills and experience is needed.

The Need for Collaborative Efforts A franchisor needs to engage his franchisees to share and resolve their issues as it will help connect the franchisee with the brand and will also help in uplifting the brand image. Besides, it will instill a sense of ownership and a franchisee will be motivated and will contribute more to brand-building. These efforts by a franchisor will keep a franchisee happy. At the end of the day, business would be more profitable.

Franchise Relationship There is a need to maintain a strong relationship with a franchisee for a healthy lifecycle. The franchisor should encourage quarterly franchise meets, effective local store marketing, partner pride, effective and participative reporting structure, maintain transparency

Franchising can help in creating larger scale without heavy investments in retail space and business structure. The Financial Times-Oct, 2014

Mr. Marya expressed hope that $500 Bn. retail sector will get a positive boost with a stable government after the current Lok Sabha elections. Statesman April 29th, 2014

White Indian restaurant brands have done well nationally, only a few of them have been successful in international markets. The presence of Indian brands/ restaurants outside the country is very fragmented. The Economic Times April 26th, 2014

In categories like electronics, there is a need to develop expertise in handling after sales trouble. With new assortments there might be disappointments and ensuring the quality would be a tall task. Business Standard-April 25th 2014

Growing at 25% annually, India is becoming the world's largest franchising marketplace after USA. New Today Chennai-Oct, 2014