Franchising in India Gaining Popularity

Franchising is defined as a business relation between a 'franchisor' and a ‘franchisee'. It is a unique business format by which a brand owner offers his proven concept, branding and business system to a partner for a license fee and expects growth of his brand and profit in return. He also provides assistance to franchisee for operating the business successfully, staff training, and management support etc.

Franchising in India:

In India, franchise sector is growing at the rate of 40 percent per year. It is one of the most reliable business expansion systems and as per estimates there are more than 1000 franchisors in the country who offer franchise business opportunities in various sectors like F&B, clothing, hospitality, healthcare, agriculture, automotive etc. Apart from domestic players, there a number of international brands those are introducing their franchise systems in India. They are catapulting the franchise industry to next level by bringing in more competitive systems into the country.

Its not only small companies but many big players have chosen franchise route to expand their presence across the length and breadth of the country.

Advantages of franchising:

Franchising offers several advantages to a franchisor and a franchisee. Franchisor can access a wider market for with relatively low capital investment. He also has an advantage of greater brand presence target markets. Moreover, the brand owner can use the franchisee's knowledge of the local market for brand promotion. Apart from this, he can tap local partner's commercial skills to increase sales. On the other hand, for a new entrepreneur or an investor wanting to kick start own venture by associating with an established business system, franchise ownership is safer bet.

Top franchises in India:

In initial phase of development, franchising grew in few specific sectors. Gradually, the phenomenon has encapsulated a wide range of sectors including food and beverages, apparel and footwear, education and training, health and fitness, beauty and wellness, consumer durables, jewelry, lifestyle and others. Now there are hundreds of local and foreign brands in different industries that offer best franchise opportunities in Indian franchising industry.

Future prospects:

Lately, there has been much adieu about new FDI norms for single brand and multi-brand retail in the country. There were concerns from several quarters regarding the impact of new FDI policy on franchise sector as well. However, experts believe that despite of new regulations; international companies and brands will continue to seek local partnerships as they don’t understand the Indian culture and socio economic scenario. As far as Indian brands are concerned, the franchise business expansion model will continue to be a huge draw for those who would like to quickly expand their business and presence without much capital and infrastructural risk. Hence, the future of franchising in India seems brighter and promising as ever.

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