Why is Franchising Business Booming in Indian Market?

Rishabh Sharma
Rishabh Sharma Feb 22 2021 - 3 min read
Why is Franchising Business Booming in Indian Market?
Franchise business in India is on an upward trajectory. The sector which delivered impressive results in previous years and it will remain its pace of progress in the years to come as well.

The simple business model that franchising offers is a significant motivation behind why the industry is growing by a wide margin all over. Nonetheless, there are a few reasons for it turning out to be a particularly immense success and among the fastest-growing sectors in India: 

1. Lower Rate of Failure: 

Compared with other start-up ventures, franchises have a diminished possibility of failure since the business idea has already been worked out. Existing loopholes are dealt with, and there is a proven model of what works and what doesn't so franchisees are more eager and confident about investing in such businesses. 

2. Demand for Franchised Business: 

The increasing buying force of the Indian middle class combined with an expansion in brand awareness has encouraged a significant market interest for global brands that retail primarily through the franchise system. Furthermore, being a nation of over a billion people, the Indian market gives colossal numbers in sales simply because the number of consumers is so high.

3. India as a Big Market:

Because of the demand in India, mostly American investors and brands, see the country as a major, advantageous destination to set up franchised outlets. The franchise model likewise works across diverse fields like food and beverage, beauty, medical care, and a lot more in this manner allowing a greater number of companies with differed products and services to set up effective franchise businesses across the nation. India, being one of the quickest developing economies on the planet, offers great opportunities in this arising business model. 

4. Privatization in Different Sectors:

Gone are the times of customers relying upon a solitary service. With the privatization of everything in India from schooling and medical care to telecommunication, there has been a consistent rise both in the arrival of international brands in the nation as well as national retail chains. With this, the scope for franchising has gone up, as well.   

5. Indianisation of Products and Services: 

Understanding the customer section and taking into account their particular necessities is a critical piece of any successful business, and this is a significant motivation behind why franchised outlets in India have built a massive consumer base. Most big brands in the nation have customized their offerings to suit the Indian palate and hospitality services. With the demographic makeover that India is encountering with a middle class that has increased disposable income, there is a consistent development in the number of consumers for branded products and franchised names. 

6. First-time Entrepreneurs: 

Reports demonstrate that the Indian franchise industry is being driven by youngsters who are opting on franchising as their first entrepreneurship venture. These new entrants decide to be franchisees because of the limited risks and already-established model, which give almost-instant benefits and freedom in business. Truth be told, as of now, about 35% of Indian franchisees are first-time businessmen, contributing substantially to the development of the sector in India.


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