Author- MUSKAN BAJAJ
Introduction:
India is currently one of the most important South Asian commercial and economic hubs, and many foreign companies are entering the country with a range of franchise options. With approximately 1.3 billion citizens, India is the second-most populated nation in the world and is expected to surpass China as the most populous nation by 2027. By 2035, the nation’s economy is anticipated to overtake that of the United States and become the largest in the world.
In India, the franchise industry has experienced a phenomenal growth rate of between 30 and 35% YoY. The industry ranks as the fifth largest in the world and accounts for about 2% of India’s GDP. Franchises help businesses expand their presence in India and also contribute significantly to the nation’s economic growth by creating additional jobs. People look for company ideas, but they are hesitant to take a risk since they are unsure of whether their venture will succeed or not. However, a franchise firm has a lower risk element because it uses a proven brand business strategy. In exchange for a franchise fee, the owner of a franchise licences the company’s operations, along with its goods, reputation, and expertise.
The company that issues franchisees with licences is known as the franchisor. According to the Franchise Rule, franchisors must disclose important operational data to potential franchisees.
Definition:
A franchise, as it relates to business, is “the right or licence granted to an individual or group to advertise a company’s goods or services in a specified territory,” according to Merriam-Webster.
According to the International Franchise Association’s (IFA) definition of franchising, which provides more specifics, a franchise is “a contractual relationship between the franchisor and the franchisee in which the franchisor offers or is required to maintain a continuing interest in the business of the franchisee in areas such as know-how and training; where the franchisee operates under a common trade name, format, or procedure owned by or controlled by the franchisor.”
Meaning:
In a franchising agreement, the franchisor provides or licences certain franchisee rights and authorities. A well-known marketing tactic for business growth is franchising.
There is a legal contract between the franchisor and the franchisee. Franchisees are given permission by the franchisor to sell their goods, services, and to utilise their brand name and trademark. These franchisees also behave like dealers. In exchange, the franchisee gives the franchisor a one-time payment, commission, and a portion of the profits. Franchisees have the benefit of learning about business practices and not having to spend money on employee training.
The following are some of the key advantages of opening a franchise in India:
1. Rapid expansion
2. Lower operational costs
3. Local business expertise
4. Branding
5. Technical proficiency and training
6. Franchisee faces less risk
7. Capital is readily available
Franchise company drawbacks include:
1. High costs
2. Limited control
3. Consistent costs
4. Lots of opposition
5. Comply with all Franchise Rules
6. Greater control over the parent organisation
It’s crucial to conduct study before beginning a franchise in India and to carefully weigh the expenses, risks, and potential benefits of joining a franchise system.
What is the state of the franchise market in India right now?
If you are an entrepreneur looking to buy a franchise firm in India, now is one of the finest times to consider moving forward. The franchise industry in India has been expanding quickly. Since the franchise market is expected to reach INR 10,000 crore in revenue by 2024, India has some of the top franchise business ideas.
Additionally, with almost 4600 franchisees, India has the second-highest number of franchisees after the US. However, there are more than 1.7 lakh franchisees of these franchises who run more than 2 lakh locations around the nation. You have the option of choosing one of three possible franchise business models as a franchisee: single unit, or multi-unit franchise.
Top 10 Beverage Franchise in India:
CAFÉ COFE DAY
The largest coffee company in Asia, according to this 140-year-old corporation. Its slogan, “A lot can happen over coffee,” refers to the Sienna and Celesta machine, which makes people pleased with something hot and wonderful. It’s straightforward and easy to become a franchise; all you need is a $10 lakh investment and a space between 1000 and 1500 square feet.
In this, they’d give you one of their coffee makers, which use the newest technology to produce coffee or tea with the simple touch of a button. In addition to coffee, they offer pastries, snacks, soups, and other energising beverages.
STARBUCKS
Starbucks is a café that, particularly among young people, has come to represent style and status. By opening franchise stores all over India in partnership with Tata, it has rapidly expanded and significantly increased its market share. Starbucks is well-known for its extensive coffee selections and welcoming environment in its locations. You must make a 1.5–2.2 crore rupee investment to purchase the franchise.
CHAI SUTTA BAR
One of the Indian beverage chains with the quickest growth is Chai Sutta Bar. The brand was started in 2016 by Anubhav Dubey and Anand Nayak. They also offer top-notch business and franchise support. More than 425 tea cafes operated by Chai Sutta Bar can be found in almost 200 Indian cities. The total amount invested is between 16 and 18 lakh rupees. The franchise price ranges between 6 and 8 lakhs. The company generates 100 crores in revenue. The brand built stores in Dubai and Oman after establishing itself in India.
MBA CHAI WALA
Praful Billore launched the renowned beverage brand The MBA Chai Wala. The entire investment needed is between 7 and 10 lakhs, plus a 3 lakh rupee franchise fee. 100 to 200 square feet are needed for a university model. The required area for a dine-in model is between 800 and 1500 square feet. A 2500 square foot area is needed for a lounge model.
KEVENSTERS
Keventers is a well-known milkshake brand in India that was started by Edward Keventer. Super Milk Products Private Limited, the main firm, first debuted it in 1920. To create a Keventers franchise, a total investment of between 25 and 30 lakhs is needed. The 9 lakh brand fee may be paid in instalments. 100 to 150 square feet are needed to open a Keventers milkshake shop. The company provides franchisees with store management and customer service training. To operate a Kevensters outlet efficiently, there needs be at least 2 to 3 employees.
SMOOTHIE FACTORY
Smoothie Factory was created in 1996 by James Villasana. Fruit juices, yoghurt, salads, and smoothies of exceptional taste and quality are included in the brand’s menu. The company targets consumers who are concerned about their health and offers one of the most successful franchise models in India.
A Smoothie factory franchise in India requires an overall investment of between 10 and 20 lakhs. Around 5 lakh rupees are collected as the brand fee. 300 to 500 square feet are needed to set up a franchise location for this company. The brand currently has more than 140 locations around the nation.
SHAKE SHOOK
In 2015, Abhishek Tripathy opened the first Shake Shook store in Gurdaspur. Shake Shook offers premium milkshakes with an emphasis on wellness. It is a popular brand of chemical-free milkshakes that is sold throughout India.
Investment for the Shake Shook franchise ranges from 9 to 10 lakh rupees. Three lakhs are levied as the brand fee. To start a Shake Shook franchise location, you need a place that is between 200 and 500 square feet large. There are approximately 10 locations for this brand in the nation right now.
CHAI KULHAD BAR
In addition to launching the brand in 2020, Vishal Parmar also began franchising. Kiosk and café franchise types are available for Chai Kulhad Bar. Starting a franchise shop for this brand requires an expenditure of between 5 and 10 lakhs. The ROI period lasts around one month. A space of at least 100 to 250 square feet is needed for a chai kulhad bar. The brand charges a franchise fee between two and five lakhs.
DRUNKEN MONKEY
One of the top manufacturers of shakes, juices, cold drinks, and similar beverages is Drunken Monkey. The company offers 200 distinct smoothie varieties on its roster. The unique aspect of Drunken Monkey is its emphasis on quality and health without sacrificing flavour. The business model of this company, which was created in 2016 and started franchising in 2017, is franchise-franchise-operate-dated. Between 20 and 30 lakhs in total are needed to purchase a Drunken Monkey franchise in India. The brand charge is 6 lakh rupees. You require a location of 200 to 1000 square feet and three or four qualified employees in order to open a Drunken Monkey franchise shop.
TEA TIME
This company was started by Uday Srinivas Tangella. The company’s reputation for quality and flavour is strong. Tea Time’s pricing is a significant component in why it is a popular brand.
In addition to many tea variations, the company also offers a variety of milkshakes, coolers, and flavoured milk. More than 20 Indian states are home to the tea-Time Group. Currently, the brand operates more than 3000 stores.
The inexpensive startup costs of a Tea-Time franchise are a big draw. The amount invested is between 4 and 5 lakhs. The ROI takes six to eight months, and the profit margin ranges from 40% to 80%. The company offers assistance in selecting the area and will offer a full start-up kit.
Conclusion:
Franchising is the practise of operating a business in cooperation with some or all elements of another prosperous business. In the past, companies would offer distribution partnerships or distributorships, which granted the right to sell a product in a specific territory. However, in more recent times, the idea of franchising has developed, when a corporation permits another company to operate under the same brand and leverage the parent company’s knowledge to build a profitable business. Despite these difficulties, many businesses wishing to increase their presence in India continue to find the franchise business model to be a compelling alternative. Franchising can be a fantastic solution for business owners to launch their enterprises rapidly and with low risk.
