An Overview of the Indian Franchise Industry

Rishabh Sharma
Rishabh Sharma Jan 14 2021 - 4 min read
An Overview of the Indian Franchise Industry
Nowadays, the franchise industry in India is aggressively developing and offering numerous benefits to Indian entrepreneurs and consumers. Here we have discussed the Indian Franchise Industry. Read on to know more...

One of the major benefits for the people in the franchise industry is that the business model and products/services are already established and proven over time. It becomes much easier to run a tried and tested business model, and at times, even the support for training and support regarding the brand is provided by the franchisor. This is just one of the reasons why the sector has achieved success across the global markets, including in the Indian markets.

The concept of franchising began in the 1990s in India, with the start of the era of liberalization. Initially, this idea was adopted by a few educational institutions and IT companies for their business expansions. At first, they were moving a slow pace, but at present, the franchise industry in India has several well-known and established brands in various cities operating under this concept. The franchise industry in India is today estimated to be of billions. And going by recent trends, it seems that this figure is only set to rise in the future.

Causes and Growth of Franchising Industry in the country:

The business model that franchising offers is easy and that’s the major reason why the industry is growing at a fast pace. There are a few more reasons for it turning out to be a huge and the fastest developing sectors in India:

1. Lower rate of failure-

Comparatively, the concept of franchising has a reduced chance of failure than the other start-up ventures, because the franchise business has already been worked out and have made a presence in the market. At the initial time of every major brand, the loopholes that existed have been taken care of, and then, the system turns out to be proven. As the brand itself has faced every phase, they know, what works and what does not for them– so people are more eager and confident about investing in franchise businesses.

2. Increasing franchise businesses-

The rising buying intensity of the Indian middle-class people combined with a hike in brand awareness has created a market demand for international brands that retail primarily through the franchise concept. In addition, being a country of over a billion people, the Indian market provides huge sales to them simply, as the number of consumers in the nation is so high.

3. India, a vast market-

Due to the high demand in India, the brands and investors from other countries, mostly American, view India as a huge and beneficial decision to set up franchised stores. The franchise businesses work across various fields such as food and beverage, beauty, healthcare, and many more – thus allowing a greater number of organizations with varied products and services to set up successful franchise businesses across the nation. Being one of the fastest-growing economies in the world, India offers great opportunities in this emerging business concept.

4. Privatization in different sectors-

Gone are the days of consumers having to depend on a single service. In the privatization of everything in the nation, from restaurants and healthcare to various sectors, there has been a constant hike in both the arrival of international brands in India as well as Indian retail chains. And with it, the scope for the franchise business has gone up, too. Names like Whitehat Jr, Guardian Pharmacy, and Ferns n Petals are just a few examples of successful privatization and franchising across the country.

5. Adjustment According to Indian Consumers

Learning about customer needs and catering to their specific needs and tastes is a key part of any franchise business to be successful, and this is also a reason why franchised outlets in India have built such a massive consumer base. Most big brands in the country have customized their products and services according to the Indian consumer, and even hospitality services. With the demographic makeover that India is experiencing with a middle class that has increased disposable income, there is a steady growth in the number of consumers for branded products and franchised names.

6. First-time entrepreneurs-

According to a research, the Indian franchise industry is being driven by young people(entrepreneurs) who are tilting towards franchising as their first entrepreneurship venture. These new entrepreneurs choose to be franchisees due to the minimal risks and tried&tested business model, which provide almost-instant benefits and freedom in business.

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