The last decade of the 20th century saw phenomenal growth in technology. Besides LPG (liberalisation, privatisation and globalisation) made the country rapid progress in IT and IT earned the name for India in the world. No doubt, IT has changed the lives of many Indian but it has done more harm than good. The working of the IT sector has thrown out of the gear the traditional office timings of 10-5 or 9-6. Days are longer and the employees are suffering from stress and over work. People have become slaves to machines and this is taking a heavy toll on their health. The tolerance level is at an all time low and the hire and fire policy is common in all offices. Many couples are childless and divorce rates are raising because of lack of time spent with partners. Hence couples who are working in the IT now want to quit and start their own business as they understand process. They have experience and knowledge in running organisations which is becoming easy for the franchisor to consider giving the IT professionals a franchised business.

For an IT professional taking loan is not an issue, since he is already gone through a phase where he has taken few loans and have been paying the EMI’s. Couples decide to take loans for the business and they are ready to work hard to repay them. The idea of starting the business is to have some permanent income to lean on if they lose a job. Some feel since there is not time for the family and kids they want their wife’s to take care of the business and the family, so that they can spend time together more. Any investment requires 2 years to get back their investments and then make profits. This helps them to have a balanced life.However getting in to the right business is important. They check the latest trends and understand their passion for business some are interested in education, beauty salon, food business, fashion etc.

Since liberation, the Indian economy has witnessed steady evolution. Consumerism has risen on account of a growing young population, high disposable income and growing urbanization. Retail and service sectors are expected to play a major role in this consumption boom. Agriculture is not longer the chief contributor to the Indian economy. The country is gradually moving towards being a manufacturing and serviced-based economy in last two decades. This growth has given impetus to a huge entrepreneurial appetite. Over the last decade, franchising has surfaced as the most prolific and feasible ways of expanding business in India. Several industry verticals such as food and beverage, education, fashion, tourism, Hair, Beauty,Saloon, Spa, Courier, Travel, Apparel Furniture, IT training, Cafe, Bar, Fitness, Health & Wellness, Tourism, Hospitality, Jewellery, Food & Grocery, Consumer Durables, Telecom, Gaming, Media, Entertainment Agriculture, Real-Estate, Home cleaning, Tank Cleaning, Laundry services, Floral Decorations, Shoes, Ice-Cream parlours, Books, Chocolates, Abacus training, Donut Houses, Sports Items and so on and so forth.

According to KPMG in India estimates, the franchising industry is expected to quadruple from 2012 – 2017. Franchising industry will contribute to almost 4% India’s GDP in 2017. This will create job opportunities both direct and indirect for an additional 11 million people by 2017. The growth would be fuelled by rising income and expenditure levels of the young population along with the recent FDI policy changes, economy and socio-cultural developments. Many international brands have already set shop in India and are adopting the franchise route or having a JV with Indian companies to bring their brand to India. Global brands such as Domino’s, KFC, McDonald, Baskin Robbins, Starbucks, Jockey International, Hanes, TGIF, Maple Bear etc., like other foreign countries India is not “one market” the market is fragments because of the demography, language cultural background and socio-economic diversity. This becomes a challenge for an international franchisor to understand all the diversified tasted and preferences, to establish and expand business in India.

The same way some of our successful Indian brands/companies have entered the foreign markets, some of them are Saravana Bhavan, Khana Khazana, Sankalp, Cafe Coffee Day, Malabar Gold, Gitanjali, Shahnaz Husian, VLCC, Kaya, Eurokids, Shemrock, NIIT, APTECH, CADD CENTER are some of the brands that have successfully ventured in to other regions in the world. There are few handicraft business and sari business and ethnic wear brands too have entered few markets. There is immense potential for Indian brands to go global and take advantage of Indian Diaspora present across the world and use this opportunity to spread Brand India. However there are enough ingrown brands in the country like Green Trends, Limelite, Kidzee, Gini & Jony, Cookie Man, Dosa Plaza, Jumboking, Mocha, Nilgiris, are brands a prospective franchisee can look at to start a business.

Franchising, though as a concept is western, is not limited to the developed countries alone. It has spread its mark to developing countries like Brazil, China, Nigeria and India are attracting a lot of attention in the franchising space because of the huge consumer class. India, with its large population has always been a consumption country and will always remain for years to come. The appetite for consumption is considered as the biggest growth driver. Franchising as a business model has achieved stability over the course of time, given new entrepreneurs increased confidence on the success of their ventures. These available investments and increased investment capability have also been a key factor driving the growth of the industry, especially when investment support from franchisor is minimal. 

Businessmen or new entrepreneurs predominantly choose franchising route as it helps increase the scale of operations while reducing the time to market. This also aids in brand building process through value creation. Because of the concept of franchising there is absolutely uniformity or product or service offering by organisations thereby leading to increased quality and standards that are being followed to give the same experience to the consumers across all the stores ? 

The fact is that taking a franchisee of a particular brand is for the uniqueness of the concept and value of the brand that the franchisor has created. The franchisor promises return on investments (ROI) for the investments being made by the franchisee attracts entrepreneurs to take up franchising as a business option. Franchisors look for people who can understand the process and can operate the business by quick decision making abilities. Franchisors look for people who can learn quickly and implement the learning to lead a team of professionals. There are different formats of business models in franchising business. Most of the franchisors adopt the Franchisee Owned and Franchisee Operated Model (FoFo), the other models are Company Owned – Franchise Operated (CoFo), Franchise Owned – Company Operated (FoCo), Company Owned – Company Operated (CoCo) and Joint Venture models. There are many reasons for people considering franchising route. The first one being franchising is a safe, best and easiest way to start a business, higher profitability and better ROI, lesser risk than a new start up, higher growth and expansion friendly.

Key challenges faced in franchising are both the franchisor and franchisee are faced with challenges before and during the operations. The retail space rentals are very high and it is impacting the ROI, collecting the royalty on time from the franchisee is a serious concern for the franchisor and this is because of the failing profits.

Today Government of India is helping entrepreneurs with good ideas to start up a new venture by providing loan though the MSME scheme. Please visit the MSME site for more details. Today MSME not only provides loan but they also provide training for different needs. The training programs are done very systematically. They provide adequate support in helping to do all the required paper work to make it easy for the entrepreneur to start the work with ease as one point window system. MSME, has evolved into preferred facilitation destination for both potential and existing Entrepreneurs by means of synergised initiatives in a Public-Private Partnership mode (PPP). The example of 108 emergency ambulance services is a classical example of PPP. The vision is expected to enhance the competitiveness of the existing enterprises, contribute towards sustainably establishing more number of potential enterprises, accelerate the employment generation, contribute towards economic growth and provide highly skilled Man Power to industries. There are many schemes released by Government of India to help entrepreneurs to succeed. 

Guidelines of the Scheme for International Cooperation:

Guidelines for Market Development Assistance on Production Scheme

? Guidelines of Scheme for Assistance to Training Institutions 

? Scheme of Surveys, Studies and Policy Research

? Scheme of Surveys, Studies and Policy Research - List of Agencies as on 26.08.2010

? Surveys/Studies conducted under the Surveys, Studies and Policy Research Scheme

? Scheme of Fund for Regeneration of Traditional Industries (SFURTI)

? Rajiv Gandhi Udyami Mitra Yojana (RGUMY)

? Implemented through NSIC

? Marketing Assistance Scheme

? Performance and Credit Rating Scheme

? Implemented directly by Ministry

? Scheme of Surveys, Studies and Policy Research

? Guidelines of Scheme for Assistance to Training Institutions

? Scheme of Fund for Regeneration of Traditional Industries (SFURTI)

? Rajiv Gandhi Udyami Mitra Yojana (RGUMY)

Implemented through NSIC

? Marketing Assistance Scheme

? Performance and Credit Rating Scheme

? Implemented through KVIC

? Guidelines of the Market Development Assistance (MDA) on Production Scheme

? Prime Minister's Employment Generation Programme (PMEGP)

? Product Development, Design Intervention and Packaging (PRODIP)

? Khadi Karigar Janashree Bima Yojana for Khadi Artisans

? Interest Subsidy Eligibility Certification (ISEC)

? Scheme for Enhancing Productivity and Competitiveness of Khadi Industry and Artisans

? Workshed Scheme for Khadi Artisans

? Implemented through Coir Board

? Rejuvenation, Modernization and Technology Upgradation of the Coir Industry.

? These are various schemes that are available for new entrepreneurs through Governmental Schemes and if they have the credentials with a good educational background these loans can be secured.

Today franchising is a great option for becoming a good entrepreneur. Many do have the idea of starting a business they will not have the business acumen, this is a good way to learn since the company would support in terms of locating the right location, help in projects, inauguration, marketing, operation, accounts and IT.

People who are returning from gulf countries can look at this option by investing in to good business by checking the credentials of the franchisor and the opportunity in different sector.

Author Profile:

Chackochen Mathai, M.A, MMM, M.A, MPhil a research scholar currently pursuing Ph.D in Franchise Management from Hindustan University has 23+ years experience in the field of franchising. He worked for major franchising brands like DSRC, NIIT, Aptech, SSI, CADD Centre, Internetworkz.

As GM - Business Development with Trends Invogue Pvt Ltd, a CavinKare Group, his responsibility is to franchise 2 saloon brands Green Trends & Limelite. He is recognized as a franchising coach and a mentor, a regular writer and a sought after speaker in many franchising forums in the country. He can be contacted @ Mob: 9003222086,