Carrefour to sell in India by 2009, opts for franchisee route

Carrefour has announced that it will roll out fully-owned stores to sell to wholesalers in India by mid-2009 even as the company is in talks with three Indian companies to open the French firm’s franchisee stores that will sell directly to Indian consumers. Carrefour has floated two separate units in India—Carrefour WC & C India Pvt. Ltd will roll out fully-owned wholesale stores and Carrefour India Master Franchise Co. Pvt. Ltd will enlist an Indian company to open the French firm’s branded stores in the country. The Indian franchisee will open Carrefour brand hypermakets in India and Carrefour’s 100%-owned cash and carry stores will feed it, said Herve Clec’h, managing director of Carrefour in India. Carrefour plans to invest in India. Currently, India allows foreign retailers such as Wal-Mart and Carrefour to own 100% cash and carry subsidiaries that sell to businesses. It doesn’t allow full ownership of multi-brand stores selling to individuals. The Indian company will open Carrefour hypermarkets and will pay a royalty fee to use the French company’s name in India. The firm will have a clause in the franchisee agreement that Carrefour will become a majority-partner in the front-end retailing if India allows foreign multiple retailers to sell directly to Indian consumers. Carrefour will retain the Indian franchisee as a partner even if India allows 100% foreign ownership in front-end retailing. Carrefour will finalize the Indian franchisee by the first quarter of next year and expect to roll out cash and carry hypermarkets of about 5,000 sq. m that will sell mainly food items.