Franchising
Business in India
Entry India, LLC
info@entryindia.com
Entry India, LLC
www.entryindia.com
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Target Audience
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Small & Medium Enterprises (SMEs)
Start ups, and
Non-Resident Indians (NRIs)
Who want to
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Expand their business into India
Start a new business in India
Profit from opportunities in India
Entry India, LLC
www.entryindia.com
2
What investors consider -1
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Business, Economic and Social Environment
Markets & Growth Prospects
Legal and Regulatory Framework
Special Incentives
Entry India, LLC
www.entryindia.com
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What investors consider
Specifics
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Fluidity of capital
Flexibility of the labor pool
Government receptivity to business
Information communication technologies
Private sector development infrastructure
Legal systems to protect intellectual property rights
Available scientific and human capital
Cultural propensity to encourage creativity.
Entry India, LLC
www.entryindia.com
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India Rising
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Most attractive socio-economic & business fundamentals
Market least affected by the global recession
World’s largest democracy: 1.2 billion population
100 million middle class in 2009 -> 580 million by 2025 *****
World’s 4th largest economy
Largest English speaking nation in the world
Entry India, LLC
www.entryindia.com
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India Investment Options
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Large potential in retail, infra-structure,
healthcare, education ……
Invest in Stocks, Bonds, Real Estate ….
Start or expand your existing business to
India
Entry India, LLC
www.entryindia.com
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India Investment Options-2
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If you have a business and want to expand it
to India, consider becoming a Franchisor
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If you want to start a new business, consider
becoming a Franchisee
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NRIs instead of regularly sending money to
your family in India, start a franchise for them
Entry India, LLC
www.entryindia.com
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Why Franchise in India
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Franchising is Big Business Globally
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The United States of America is at the forefront of the franchise boom
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40 % of retail sale revenues are from franchising
50,000 Malls, 40,000 Supermarkets
Franchising has a Huge Growth ahead in India
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Over a million franchised outlets with sales of 2-3 trillion dollars
Relatively New Concept for India
Around 1,200 Franchisors in the country (200 are foreign)
More than 100,000 franchisees
Current market size in India: $10 billion
$20 billion by 2013 (30 % Growth Rate)
2% of the total Retail Sales
300 Malls, 1500 Supermarkets
Franchising infrastructure is in place in India
Entry India, LLC
www.entryindia.com
8
Premier
Franchising Resources
International Franchising Association (IFA)
http://www.franchise.org/
IFA represents all aspects of the franchise community and works to
protect, enhance and promote franchising.
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The Franchising Association of India
http://www.fai.co.in/
Provides a one-stop shopping experience for franchising business
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Entry India, LLC
www.entryindia.com
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Franchising Defined
Franchising is a method of doing business
wherein a franchiser licenses brand, product
and proven methods of doing business to a
franchisee in exchange for a recurring
payment. Various types of support are made
available continuously by the franchiser to
enable the franchisee to compete and grow.
Entry India, LLC
www.entryindia.com
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Franchisee Advantages
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Franchising Reduces Business Risks
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90% of start-ups fail in the first year. In a franchised
business, over 90% succeed.
Proven business model, recognized brand, customer
acceptance
Established methods and quality
Pre-opening (site selection, financing etc) and operational
assistance: staff, training, advertising
Wider market penetration
Relatively low capital investment
Entry India, LLC
www.entryindia.com
11
Franchisee Issues
in India
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Some Loss of entrepreneurship
 loss of independence in doing and developing business, in
pricing, in new product introduction, in hiring etc.
Legal and disclosure framework for franchises is not in
place
Real estate markets are somewhat unstructured and
unrealistic, making it difficult for start-up ventures to invest.
A franchisor’s problem may become your problem
Entry India, LLC
www.entryindia.com
12
Franchisor Advantages
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The franchisor gets easier access to capital for rapid
growth
The franchisor leverages the franchisee’s knowledge of
the domestic market & regulations
Franchisees are far more motivated to maximize sales
and profits than salaried branch managers.
Franchisees are an important source of new marketing
and product concepts
Entry India, LLC
www.entryindia.com
13
Franchisor Issues
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Liability of Parties Uncertain
No Franchise specific legislation: the liability of either party is
determined by the agreements between them or on the basis of
general applicable laws
Possible loss of direct operational control
Possible loss of Intellectual Property
Entry India, LLC
www.entryindia.com
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Franchisee Plan
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Research
 Get Reports
 Attend tradeshows
 Evaluate strength of the franchisor
 Talk with existing Franchisees
 Work in an existing operation
 Get professional help in navigating through the paper
trail and due diligence
Write a business plan
Entry India, LLC
www.entryindia.com
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Franchisor Plan
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Phase 1
Market Research
Entry Strategy
Legal &
Disclosure
documents
Growth Strategy
Business Plan
Phase 2
Roll out plan
Locating the right partner
Govt. clearances and approvals
Valuations and Negotiations
Phase 3
Support Activities
Audits & controls
Road map for franchise expansion
Entry India, LLC
www.entryindia.com
16
Growth Sectors in India
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Retail, Telecom, Education, Healthcare are
fastest growing
Automotive, IT, Beauty, Tourism are fast
catching up
Entry India, LLC
www.entryindia.com
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Example
Education Franchising India
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India is one of the largest markets for education in the world in terms
of number of students.
Current Situation
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400 active education franchisee owners in India.
Informal and supplementary education has the lion’s share of
education franchising.
Professional and vocational skills (Aviation, Hospitality, Hotel
Management, Finishing School, Retail Training, Financial Services,
and Insurance are the most franchised followed by IT training.
NIIT, Aptech in IT education, Oxford and Cambridge in vocational
learning, Hughes network for management etc.
Demand-supply mismatch for quality schooling
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270 million students by 2020
They will need schools, teachers, training, jobs, housing,
entertainment…….
Entry India, LLC
www.entryindia.com
18
Best Way to find Partners
for US based companies
US Department Of Commerce
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Golden Key Service
buyusa.gov/india
Appointments with pre-screened partners
Profile on each Indian company/partner
Post meeting de-briefing
Available in New Delhi, Mumbai, Chennai, Calcutta,
Bangalore, Ahmedabad, and Hyderabad.
Payment SME: $700; Large: $2,300
Entry India, LLC
www.entryindia.com
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Summary
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Notwithstanding the current economic slowdown
and certain regulatory issues, the franchising market
(specially healthcare and education) has enough
reasons to remain upbeat about its future in India.
To succeed
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Prepare thoroughly
Focus on Establishing Solid Local Partnerships
Get a legal firm and a CPA who have worked with foreign
businesses
Track Progress, Enjoy Profit
Entry India, LLC
www.entryindia.com
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Thank You
Entry India, LLC
www.entryindia.com
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