Growth in services franchising to surpass product

Franchise activity in India has been growing 30 per cent year-on-year in the last five years, with the segment showing a healthy growth of 35 per cent in the last two years. While the franchise market is currently estimated at $25 billion in India, globally it has emerged as a $3.65 trillion market.

Though the segment currently contributes to about just 1 per cent to the nation’s GDP, it is going to contribute more in the coming years, points, Gaurav Marya, chairman of Franchise India. One of the pioneers in the segment, Franchise India has benefited over one lakh business investors through more than 100 shows held both in India and overseas. The company assisted over 800 companies in their franchise search. It encompasses a range of domestic and international portfolio of franchise and retail companies apart from offering Franchise and Retail consulting.

Marya, started his first business at the age of 16 and over the years has started and sold about 15 other businesses ranging from mobile phones, career advisory, restaurants to entertainment business. At the age of 24, he discovered his real passion in life— Franchising. He interacted with over 25,000 budding entrepreneurs to help them select and meet the challenges of start-up businesses. Over 60 major American brands consulted him for their expansion plans in India. Marya consults companies on the appropriateness of franchising, both domestic and international, as a method to obtain their long-term expansion goals and in the design and development of their franchise systems. He spoke to Metro India in detail and shared his views on the developments, trends and future of the segment.

Marya explains today established product companies are looking at franchisee route to expand their presence to wider geographies. Urban spending is going up. There is a growing demand for financial services, banking and even ATMs. New categories will also emerge in the franchising space in the country. The industry will see a gradual shift from a product oriented activity to services. He adds, “About 75 per cent of the franchising currently is in products category with the remaining 25 per cent being services. This will get equal in the future.”

He points the segment is getting even more interesting as 30 per cent of the franchise owners are first time owners and 50 per cent of the franchisees have not done any business previously. However the awareness on the opportunities and what to look for in a franchise opportunity is lesser in India compared to the US. In India, the segment needs to get standardised further. There is still a lot to happen in India in this space. With the emergence of entrepreneurial ecosystem, India too is expected to achieve big in the years to come.

When asked what aspects should a franchisor and franchisee look into while evaluating their compatibility to work with each other, he said, “There should be financial, marketing, operational and strategic fit. Though these can help both sides to work together better, it’s important that franchisors should take an active part in handholding and improving franchisee business. Both sides should be able to align their aspirations well.”

Marya said, “India offers a lot of franchise opportunities as more and more American and European brands eye their presence in the country.” Franchise India as an integrated franchise solution company operating since 1999, consulted several major brands such as HCL, MGF, Quality Walls, Tata, Gitanjali, HSBC, Levis, JK Tyres, Lakme, D'damas, Adidas, Euro Kidz, The Apollo Clinic, Chhabra 555, Kidzee, Motilal Oswal, Rosebys, Next and Welhome. “Franchising consultants cannot only bridge the gap between the franchisors and franchisees but can also help improving the awareness of the franchising opportunities and measures to be taken both sides to make such alliances or ventures successful,” Marya adds.
He says, franchise broker community which is growing constantly will become a major group that will influence the growth of franchising in India, particularly in the next 3-4 years.

On Marya’s Franchise India expansion plans, he said, “We would like to penetrate our activities to about 300 cities in India achieving 40-50 growth annually. While we aim to consolidate our presence in Asia, we see big potential in neighbouring countries such as Bangladesh, Sri Lanka and Nepal. We also see growing opportunities in matured markets such as Australia, the United Kingdom and North America. We anticipate one-fourth of our revenues coming from our overseas markets in two years. We will also look at acquisitions if we find any appropriate asset.”

Source - Metro India

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This release was published on openPR.