Current Scenario of Franchising Industry India..........

26 Feb 2020

 Current Scenario of Franchising Industry in India      


India is a second largest franchise market in the world after the US with about 5000+operating franchisors and over 2.5 lakhs franchisees.

Effect of Economic Slowdown and fragility in jobs results in the surge of First-time entrepreneurs prompting a surge to Indian franchise business industry.

Though due to the absolute dryness in the market, the seasoned investors or business buyers are keeping themselves at bay and waiting and watching for the right opportunity to move forward. This results in the vacuum of investments in the larger projects but the small projects with investment under 50 lakhs are driving the franchise market soo well.

A spurt of first-time entrepreneurs is driving growth of franchise industry in India, which is pegged to touch around USD 200 billion in size in the next five years

The rapidity in the Growth of the Franchise Industry is happening due to the vast penetration of the brands in the tier II and tier III towns. The reason behind the major shift in the business in tier II and tier III towns is the availability of the disposable income and awareness of the brands among the people.

With a lot of professionals, especially from IT & Telecom background, choosing the franchise route to entrepreneurship in the last few years, the industry has witnessed a year-on-year growth of 40-45 per cent. The major investment is moving towards the tier II and tier III towns.

Today, 50 per cent of all franchise buyers are first timers in business. This is the biggest ever surge in the percentage of first timers and this is because the uncertainty in the jobs and insecure future. The Franchise Model is helping them to change their shoes conveniently; securely as they get the hand-hold support from the franchisor to structure their business.

There is a major shift in the thought process as earlier when people would buy a franchise they have the mindset that they have invested and they put other people to run the business and did not get involve in day-to-day operations but now it is nging as people who have bought a franchise are driving from the front to run the business and also share their views and suggestions with franchisors which was not there earlier and that was one of the major reason in the failure of the business.

To select the right franchise business concept for themselves it is highly recommended to go for a structured Market Study to ascertain the Right Market Mix and to understand the potential of the Markets which helps in prompting to assess the right investment as well as to get the fair understanding on the Returns making your investment more secure and beneficial.

By – Gaurang Mohan; Mentor, M.D. & CEO – FranchiseNeed (Building Entrepreneurs)


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