7 Reasons to own a Franchise Now

From aspiring entrepreneurs to small businesses, Franchise Insider understands that the cloud of Covid-19 uncertainty has derailed the plans of one and all. No wonder many are now skeptical about the future of their businesses. Strange as it may seem, but this is a good time to make a new beginning. The one you have been planning for a while now. 

It is natural to be perplexed when the economy continues to blip. When things and habits of people around you are undergoing a sea change, what a businessman needs is a bankable franchise model for its enterprise with low-risk management, high returns, and a higher success rate

NOW is the time to be part of India's growing Franchise Business Model

The domestic market of a country of 1.3 billion, the second-largest in the world, is self-driven. The pandemic has beyond a doubt put a brake on economic growth. But it is not as bad as it seems to be. Outlook on the business side is not all negative. Urbanization, purchasing power and brand awareness in India is only going up. For, Indians' services and goods needs will stay forever. Green shoots have begun to appear in the economy and demands are once again northward.

The franchise business in India has registered almost four-fold growth since 2013. Prospects are bright as well. From the current 2 percent, the franchising business is expected to contribute 4% to the Gross Domestic Production (GDP) by 2025. The fact that India is the second-largest franchising market in the world, behind only the US, reflects the bright future of the industry.  

India's consumer spend is pegged at US$ 1.5 trillion and it is expected to grow by US $ 6 trillion by 2030. The vast untapped domestic Indian market will continue to attract foreign franchisors and local entrepreneurs to tap this flow.

India is not just one of the most populous countries in the world, but also one of the youngest, with over 65 percent of its residents under the age of 40 years. This widens the base of the entrepreneur’s pool for franchisors, pulling the best in the world to open shops in India. Financial awareness combined with the risk appetite of young India has fuelled the franchise industry's growth in this country.

You can be part of this upward trend and claim your share in India's US$ 450.4 billion franchise industry. Here are the top seven reasons to own a franchise today

1. Franchising: A low-risk, high-success dynamic model

Apart from capital, the biggest investment in any business is coming up with a model. It should be sustainable as well as profitable to ensure the desired returns. Franchise Model: Wherein an established business (franchisor) gives license to others (franchise) to use the name, the product, and its tried and tested business model, charging initial fees and management service fee in form of royalty, reduces the teething problem and helps settle in an already established system. All the required training, product development, marketing, and advertising, promotional activities, and management services, which have stood the test of time, are offered to the franchisee.

A franchisee has to register a Firm/LLP/Pvt Ltd company so that they can sign a LOI/MOU with the Franchisor. This is the initial contract that binds Franchisor and Franchisee.

It is said that the history of Indian franchising is older than its independence. In 1940, the first retail chain had come to India. But the model got thrust only four decades back with the entry of an IT firm, and there has been no looking back since. Today, from food, radio taxis, education to information technology, franchising has emerged as the most successful model for most of the sectors. 

2. Booming Industry

The flourishing industry now, according to the Franchise Association of India (FAI), boasts of over 4,000 brands, including 50 percent foreign-based. The industry is likely to see a growth of 40% by 2025, says a survey by KPMG and FAI. 

India is home to nearly 200,000 franchise outlets and the number is only growing by the day. Even in ties-II cities today, Dominions, McDonald's, DTDC, Lens

kart, Euro kids -- all of which are franchises -- are household names. The growing middle class only provides perfect opportunities for new outlets to establish and grow.

Start-ups are a buzz word today. But against a highly risky take-off for a business built from scratch, the franchise industry boasts of 85 percent success rate. It guarantees flexibility, status, and money in return.

3. Favorable business conditions

With more suitable real estate options available now than March 2020 -- when Covid-19 hit the world -- negotiable rentals, attractive deals by franchisors, and a huge trained pool looking for jobs, a franchise business offers an opportunity like never before. 

4. Be employment facilitator

Be self-employed and provide jobs to others. As a franchise owner, you have an opportunity to hire hands as per the nature and size of your brand. On average, a franchised outlet provides employment to 5 to 30 persons. Today, more than 10 percent of the estimated workforce is directly connected to the franchising industry. All those in the supply and delivery change get the benefits of indirect employment through the industry.

5. High Success Rate: A franchisor is ready with research and development and he is aware of what works and what does not. Gaps in the model have already been taken care of. Franchisee gets a readymade framework around which a business is built. The road ahead for a franchisee has already been laid, explored, and cleared, presenting minimal failure risk than non-franchisee owned small businesses.

6. High Demand: Being one of the populous countries in the world has its own share of advantages. Given the high consumer number, it by default becomes a potential market, wherein various types or brands can capture growth with a wide range of products. With more and more families joining the upwardly mobile category, easy access to the internet and a growing brand consciousness make it the most progressive industry.

7. First-time entrepreneurs: The above two reasons make a strong case for first-time entrepreneurs to take the tried and tested path. They account for over 30 percent of franchisees in India. Their share is only going to grow given that India has a huge pool of youth ready to taste the water with minimum risks.

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