The Global Slowdown has severely affected the Indian retail space. Well known grocery and mobile retailer Subhiksha is under massive crisis as the Government summoned all the directors today to inquire into the Provident funds and salary accounts of its employees.
Retailers have changed their business model to beat the slowdown and are actively looking for partnerships through the franchisee route. This might sound like the days of your parental generations are back in Indian business – Distributor, C&F etc. Well in the current market scenario, retailing in India is taking similar shape.
The brand licensing industry is expected to grow to Rs 30,000 crore. Franchising is a safe option as the Retailer mitigates lot of risks and Franchisee if at all a very serious businessmen with the fire of entrepreneurship can make a lot of difference.
Typical RoI in Franchising is between 15-20%. According to Franchise India Holdings, new breed of individuals are storming this sector who were previously on Dalal Street and the Indian Realty market. This works well with small format chains [exclude luxury brands] where one does not require massive investments or hand holding. This works on the model of Master Franchise for a region or country and sub-franchisees of big brands.
Related Reading:
Tata Westside Franchisee Business Model
Vishal Retail Looking for Franchisees to Expand