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Franchising in India - Mind Hosts
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Jul 14, 2021
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Franchising in India

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The ultimate goal of marketing is earning profits through the satisfaction of the customer. Over the years the dynamics of marketing have changed and today marketing does not and cannot aim just at profit-making but today’s priority rests on customer satisfaction. Marketing is a complex and dynamic process which involves continuity. It is run on planning, execution, control and innovation.

Understanding consumers’ needs and wants, building strong customer connection and capturing value from customers to create profits and customer quality forms the basis of marketing. Effective marketing is the backbone of organizations and it is carried forward by identification of customer needs. Pricing, promotion, framing ideas and distribution of products and services to people constitute business.

Taking into consideration the geographical and social changes, it is crucial to give new directions to marketing. Franchising is one of the significant options for marketing. Franchising has become a major force in business and has come to stay.

What is Franchising?

  • It is a form of marketing and distribution
  • The owner of the business is the franchisor
  • The franchisee; a person or a group of persons are granted the right to sell products or provide services owned by the franchisor’s business system.
  • The franchisee is permitted to use branding and trademarks of the franchisor’s business system under stipulated guidelines.
  • In franchising it is mandatory that the franchisee to enter into a partnership agreement with the franchisor according to the time period agreed upon.

Around 1990s the Indian market opened its gates for franchising. With its increasing demand in all sectors of the economy offered an attractive proposals for foreign brands to establish their franchises. As a result, the Franchising Association of India was set up in the year 2000 in Mumbai. Gradually, many foreign companies and institutions started making their mark.

India is an excellent platform for franchising because of the following features:

  • India is a vibrant economy with a GDP rate over 8 and promising to go up further
  • Continuing efforts to sustain reforms to liberalize economy
  • Transforming Indian lifestyles
  • Changing dynamics of consumer base
  • Increasing purchasing power of the Indian middle-class

There is a myth that opting for franchising may cost millions. But in reality, it does not cost so much and is open for anyone to start a franchise. Among the South-Asian countries, India has proved to be an economic and commercial hub. There are many companies coming up with franchising options. Franchising actually results in the country’s economic development and self-sufficiency. One of the most potent advantages is that it creates immense potential for job creation. Youth in the country are quite capable and skilled but are being able to find the right anchor. Franchising is truly a blessing for those who dream of becoming successful entrepreneurs and who are ready to put in their best efforts to realize their dreams.

Aspects to be taken into consideration before selecting any franchise 

1)Market Requirement and Research – Understand the market requirement, different brands and then making a choice is important. Market research is crucial.

2)Cost and Setup Fee- This includes refundable fee, non-refundable fees, training fees, start up fees and so on. Selecting the right location, setting up the interiors and  manpower also should be considered.

3)Guidelines – it is important to consider the guidelines offered by the franchisor in terms of salaries, number of personnel, products and services, fixation of prices and so on.

4)Assistance and Support- The support of the franchisor is important and this aspect also should be thoroughly looked into before starting a franchise. This includes training, support for marketing and technical operations.

Opening a franchise business is an excellent step towards betterment of the self and the country. The edge that a franchisee can have is in terms of the assistance and support of the franchisor and of using a brand successfully. The risk factor is low and has the potential for youth empowerment.

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