After 1990, the model of franchise management was introduced in India, with the start of the era of liberalisation. Initially, the model was only adopted by a few education institutes and information technology companies. But today, the franchise model has been adopted across various sectors in India.
According to Franchise India, currently, there are 4,600 franchisors in India with 50% regional brands, 34% national, and 16% global brands in the franchising sector in India.
India’s richly diverse culture is reflected in its population and the key to the success of any franchise within India lies in accommodation of the market. The needs and tastes of India’s consumers are unique, and over 22% of brands of the top 100 franchises in the last five years have adopted the franchise model focusing on the preference of the Indian market.
As per the report by GrantThornton, over a decade, franchising business has witnessed significant growth by assisting companies such as with companies such as Raymonds, Patanjali Ayurved Limited, Bikanervala Foods Private Limited, expanding their presence and optimising cost. Whereas, at the local level, every franchisee not only gets a lucrative employment opportunity but also becomes an active contributor to the growth of the company.
Over the years, food and beverage franchises have consistently dominated the franchise sector within India. Currently, one-third of new food outlets in India are established through franchise systems. Due to rising demand and frequent innovations in the industry, it is estimated to double its workforce, providing plentiful employment within India by 2022.
Further, retail, healthcare, and beauty and education are also attractive markets for franchising. But, it is the consumer service market that has picked up in the last couple of years. Today, with companies such as Vakrangee, DTDC, MakemyTrip, etc. consumer service has entered the rural arena as well.
Here are some key sectors that possess immense prospects for successful franchise opportunities:
The consumer service accounts for nearly 14% of the top 100 franchises in India. With franchisors being largely concentrated in financial services, logistics, hotel, courier, and cleaning services. The players in the industry have experience of around 30+ years with almost all having a pan-Indian presence.
The food and beverage sector dominates India’s franchising sector accounting for 27% of the top 100 franchises in India. The majority of the growth in the organised space is expected to come from the expansion of franchising chains, where there are several options to choose from such as fast food, ice cream parlors, juice bars, bakeries, and restaurants franchising. The players in the industry have an experience of around 39+ years with the top-tier players having a pan-Indian/global presence, and middle- and bottom-tier player having a regional presence
The education and training sector accounts for nearly 16% of the top 100 franchises in India with franchisors being largely concentrated in the preschool, higher education, and IT training space. The players showcased in the industry have an experience of around 13+ years of experience with the players across all tiers having a PAN India or global presence.
The health and beauty sector accounts for a share of approximately 11% of the top 100 franchises in India with franchisors being largely concentrated in the fitness and salon/spa space running exclusive outlets. Providing quality service experience is essential in the segment and many of the businesses employ machinery, often patented, to serve their customers. The players in the industry have an experience of around 32+ years with a regional, pan-India.
The retail sector accounts for the second-largest share (24%) of the top 100 franchises in India. The franchisors are largely concentrated in the apparel, pharmaceutical, jewelry, consumer durable, and footwear space. The players in the industry have an experience of around 43 years with a pan-Indian presence.
The franchising market in rural India is presently dominated by the consumer service sector. Companies like Oyo, Vakrangee, DTDC, Gati Logistics, Linq, and others through their franchise model are catering to the needs of rural masses, nurturing entrepreneurship, and giving new means of livelihood.
Followed by consumer services, the education and training sector are increasing their customer reach in rural India. With major support from the public sector through initiatives like skill India, not only the overall education and training levels have improved in rural India, the rural populace also prefers the importance of salaried employment and self-owned business.
Large sectors like food and beverage and retail have also witnessed rapid growth in rural India. Some of the prominent players that already have made an impact are Amul, Mother Dairy, Patanjali, Raymond among others.
