Earlier, I had to rush 10 km from my house, just to have a bite of my favourite ‘Aloo tikki’ from Bobby Tikki Wala (BTW). Such was the craving, and the solution was to travel. However, now I have 2-3 BTWs within the 2-3 km radius with Free Home Delivery option hanging at their doors. My family was thrilled and phrased it like, “they have come to our town too”. Indeed, they have. Not just BTW, but the concept of franchising along with many of your favourite brands.
According to IBEF, the Indian food market is currently valued at US$ 1.3 billion and is growing at a CAGR of 20% CAGR which is expected to cross US$ 2.8 billion by 2015. This signifies the huge potential and the pool of opportunity this industry has to offer, and the success of Dominos by Jubilant Foodworks Ltd (more than 800 restaurants in 170 cities in less than 2 decades), or Subway’s plan to operate 1000 outlets in India by 2015 (involving an investment of Rs. 300 crore), demonstrate the success and a glimpse of future for food franchising in India.
The trend of franchising has shifted gears in the last few years in India. Among the main reasons contributing to this shifting, are the rise in the delivery sector, the organizing of the food sector and changing preference of consumers towards fast food. The increase in the online food ordering service has also compelled the owners to think of opening the franchise of the famous brands in varied localities in order to facilitate the target group there. As the ease of getting a bite of your favorite brand within your residential area, or at the comfort of your couch is captivating.
Franchising not only ensures the customers of a standard taste but also a safer bet for the owners from the business point of view. Yeah, it has its share of cons too and thereby, certain points have to be considered. Such as a fixed amount, a good one, as royalties, advertisement fees, the restraints like pricing, geography territory, staff quality as per set by the brand along with some other legal obligations. However, the saved effort in making a brand from scratch outweighs the cons to a large extent. With franchising, all you need to figure out is a good location which can give you a good positive margin between the profits and royalties.
So, the next time you visit a brand far from your home, don’t worry and just wait. As it will come to your locality too, sooner or later.