The Future is Bright for Franchising in India

The Future Is Bright for Franchising in Indialow-priced general merchandise products and services.
Though franchise companies represent a small portionIndia is just one of the geographical areas targeted for
of all US business, the franchise industry is big. In thethe company’s multi-million dollar overseas business
United States, there are over 2,500 franchise systems,expansion.
with more than 534,000 franchise units, whichAnd there are some surprising entries to franchising in
represent slightly more than three percent of USIndia too, which at first glance, might not seem like a
businesses. Yet that small percentage generates 35logical fit with traditional Indian culture and consumers.
percent of the retail and service revenue in the U.S.Contours Express launched its first Indian center in
economy.Bangalore, with a second location in Mumbai. The
With franchise-related products and servicescompany has 700 fitness centres for women in the
estimated at $800 US billion annually, internationalU.S and additional locations across 24 countries, and
demand for franchise brand name products andplans to have at least 1000 Contours clubs operating
services is creating huge opportunities for Americanaround the world.
companies to expand overseas.Pizza Corner aims to open 36 stores in India, and is
India, which has a growing middle-class of over oneextending efforts to expand in Sri Lanka, Nepal and
billion people, is now positioned as a major force in theSingapore.
global economy and fertile ground for investment inGolf USA has grown to almost 100 stores in 32 states
retail and business development. The franchisingand 6 foreign countries; and is actively seeking
industry in India is expected to grow at an annual rateentrepreneurs to operate stores in India.
of 30 percent, and to drive the country’s currentAccording to statistics from the Franchising
$330 retail sector even higher. In 2007, more than 750Association of India, franchises currently account for
national and international franchisors were operating inonly two percent of retail revenues in India compared
India, employing millions of people, and generatingto almost 50 percent in the US. However, that two
revenues in excess of $3 US million.percent is growing at a fast pace, and the implications
The industries cited as the top prospects forpoint to astounding market potential. The success rate
successful franchise opportunities in India include:for individual franchise business owners in the US is 92
* Food and beveragepercent, and since franchise businesses are based on
* Educationproven systems, the success rate for Indian franchises
* Apparelshould be comparable.
* EntertainmentFranchising has a bright future in India due to the
* Courier Servicesconvergence of many factors:
* Stationery and gift shops* The average Indian income is steadily rising and
* Health and beautyindividuals have more purchasing power.
* Fitness and nutrition* Telecommunications and transportation infrastructure
Many of the world’s largest and well-knownimprovements facilitate the exchange of information
franchise companies, such as UPS India,and goods.
McDonald’s, Yum Brands, Baskin Robbins and* Increasing levels of consumer spending, with greater
Subway already have a visible presence in India. Otherrecognition of brand value.
US companies, from diverse industry sectors, are now* Internet access is opening the world to India, making
gaining a foothold too.its population more aware of global trends and brands.
With India’s retail sector growing at more than eightAnd conversely, the Internet is making it easier for
percent a year, The Dollar Store is actively seekinginternational companies to gain an understanding of
franchisees. This retail chain, based in Florida, USA, sellsIndia’ culture, geography and politics.