Franchise in India

Franchise in India

Franchising in India is at a very nascent stage. However, this industry has clocked the annual growth rate of 30% with a market size of USD 7.2 billion, the second fastest growing industry. In the US, 45% of the sales come from franchised business; India is still to reach that stage. India offers lot of potential for the franchising community & expected to reach US$ 20 billion by 2013. Franchising is still an emerging trend in India. It is still growing and as such, most of efforts by Indian franchisors are still inclined to franchise recruitment and sales unlike in the West where franchise management and ensuring franchisee profitability is the matter of greater concern. The picture is likely to change with the passing of time and after gaining experience and knowledge in the same domain. Few of the important sectors that are thriving well in this industry are:

Education Sector: India, with the largest youth population, is an attractive destination for the potential business opportunities in Education Sector. Its unquenchable thirst for quality education with world class training systems and its desire to fill the wide gap between the number of potentially employable people and corresponding training institutes available has led to a widespread demand for franchised education. This has given rise to the various education operators and service providers such as play schools, schools, institutes, development & training institutes, professional coaching operators etc. According to a survey, the growth of the education sector in the country is pegged at 35% amongst new concepts and it will continue to grow in the years to come. Keeping in mind the current market trends that need to be capitalized in India, the education sector further opens the doors for many entrepreneurs. Looking at the risk and profitable returns variation from business to business, franchising ensures a safe method to own a brand especially in the Education sector which is least effected territory even in the time of recession. Private institutions are typically perceived as hallmarks of quality education and given the demand, Indian education entrepreneur are ready with massive expansion plans, which will provide thrust for the education sector to grow multifold.

F & B: With the increased number of people preferring to eat out and spend more on food items, this sector has dominated the franchising industry like no other business sector. The market is flooded with food franchise opportunities of different categories suiting to different level of budgets. There are many different options for food and beverage franchising, such as fast food, health food, pizza, sandwich shops, ice cream parlor, smoothie, juice bars, cookie shop, candy outlet, and bakery as well as restaurant franchises. The Food & Beverage sector is expected to touch 45% of growth level in the near future. This may not be the least effected territory but is undoubtedly one of the safest ones to go in for.

Clothing & lifestyle: Changes in economy and lifestyle all over the globe have led to an increase is sales of clothing, shoes, jewelry and accessories which makes this a great industry to try to get into, particularly on a franchise level. People buy clothing, shoes and accessories quite often based on a brand name. When you buy into a franchise, you are getting that brand name with it so you are already a step ahead. Thus, this sector offers lucrative franchising opportunities with people willing to spend adequate amount of money on clothes and accessories. As consumers want the best clothes for themselves they are ready to make investments too. Thus, clothing industry will never be out of business if one gets to offer quality products as per the demand of the market. Industry statistics peg the Indian apparel market currently at Rs 1389 billion, growing at a Compound Annual Growth Rate (CAGR) of 12 per cent.

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