A group of luminaries was gathered at “Entrepreneurship Summit 2013”, organized by Franchise India, at Pragati Maidan, New Delhi, on 19th-20th October. The session titled ‘Franchising in Retail’ had a mix of panelists including players who are leveraging franchisees for profitable growth and who are planning to adopt the model for their expansion.
Sustainability is quite important for flourishing through franchise model, believes Ashita Chabbra, Head - Business Development, Chabbra555. She added, “Franchising in retail is at nascent stage, but it is sure going to be a game changer in unorganized retail space . All it requires local efforts and investment for successful retail expansion through franchise model. Ms Chabbra stressed that sustainability is a quite important factor for flourishing through this business model. A franchise owner must think a brand as his own. Each of our franchise owners is an entrepreneur in himself. They operate their stores at by themselves. Speaking further she said, “ Each day so many people come to us with their investment budget, and they asked for their desired ROI. Well, this does not work; they need to understand, ultimately, franchising is a business with its associated risk and returns. No business promises you lucrative margins anyway. A franchise owner can support her franchisers in back end operations like stock re-cycling, supply chain, marketing, etc; but do not expect him/her to generate business for you."
Sharing his views on the subject Gopalakrishnan Sankar, CEO, Reliance Footprint, said, “Franchisor and franchisee should share the common dream.” The company has 40 company-owned stores spread all across the country and is keen to enter the franchise model. He added, "The business model should be perfect not only in terms of layout but fiancés as well. Franchiser and franchise should share the common dream. A franchiser should not and must not do the work of franchise."
Jurgen Wolf, Managing Director, Hafele India, summaried, when we started operating in India we had known little about franchising; today we are operating a robust network of franchisees. He stressed that hidden players of home interior solution was the biggest challenge when we started here. He also informed that branded luxury apartment of the INR 7,500 car in India, hence there are enormous business opportunities in this segment especially for property developers and interior designers. Moreover, people love to associate with good brands. When it comes to franchising selecting the right partner is important for us, then comes location. Over the years we have developed a clearly defined franchise model, where franchisee and franchiser both understand what should expect and what should not that includes developing the shop interior as per the parent brand guidelines, especially if the store is located in small town, marketing to generate footfalls, keeping shop displays up to dated etc.
Ashutosh Garg, Chairman and Managing Director, Guardian Lifecare, Garg highlighted that we have attempted franchising twice in the span of the last ten years. Over the years we have observed that expectations of franchises are quite high. He stressed that do not go into franchising until you are certain about your brand. Having a faith that franchiser that can operate your store is equally important, do not go into business liasioning if a franchise is not of your trust. Moreover, pharmacy business requires the skilled human resource. Make sure that franchise owner can matchup those expectations. We require at least three pharmacists to operate our store. We have witnessed several incidents in the past when our pharmacists were mistreated by the franchise owners. Such incidents are especially come from those stores which are not doing good. Moreover, It is equally important for the franchiser to offer something valuable, so he can sustain in business for the long run.
Highlighting the importance of retail franchising Balachander, MD, Laundry project India, also showed keen interest to implement franchise model in coming months. There is a lot of scope for outsourcing as well in this sector. A few years back, opportunity was quite limited in this segment; that time there was no option in this segment but to start a company. Over the years, we have tried to create a cool and young brand; now we are open for franchising as well.