Turn South for great returns

Franchise India is also organising series of business opportunity shows for potential franchisees with thousands of brands from diverse industries and sectors. Let’s know more about the galore of opportunities in South India and how favourable is it to start a business in that picturesque part of the country.

Right from F&B to IT, fashion to beauty and health, hotels, resorts, automotive and much more, South India has business prospects in all these sectors. Already existing brands from various industries have already started seeking franchisees from South India. Kerala is one of India's most progressive states in terms of social welfare and quality of life. In contrast to the rest of India and most other low-income countries, Keralites enjoy education and health at levels that are on par with the West. Similarly, Chennai, Bangalore, Hyderabad have been a home to large number of industries. This evidently shows that franchise business is a sure shot success in South of India. 

Bengaluru based preschool brand, Little Elly has massive 100 outlets alone in South India. Vittal Bhandary, MD, Little Elly says: “South of India has a great business prospect. People from south India are more concerned about the quality and curriculum delivery which we believe is our strength.” Green Gold stores that owns and sells merchandise of famous cartoon characters Chhota Bheem and Mighty Raju has 26 Green Gold Stores in India. Out of this, 13 stores are in Southern region which covers the city of Hyderabad, Secunderabad, Bengaluru, Chennai, Kadapa, Kakinada and Nizamabad. Sudeesh Varma, Head, Green Gold stores says: “For setting up a Green Gold Store, region does not matter, what matters is good buying power and the acceptance of our brand Chhota Bheem. If the location is perfect, you will surely find a lot of Chhota Bheem fans and the store will pick up sales in no time.”

Delhi based florist, Just Flowers has two franchisees in Bengaluru and Udupi and plans to open two more in Chennai and Hyderabad. Anand Kumar, MD, Just Flowers says: “Opening a franchise outlet in South India is beneficial because the company already has a good flow of online orders. We have different city based websites there. This way we can give business from day one and it will help franchisee to get break-even within 2-3 months.”

Rewards

South India not just has established brands like Titan, TTK Prestige and Naturals but it has huge prospects for the rising brands too. A vital aspect which decides the feasibility of any franchising business in a country, relates to the class of consumers it caters to. India is a multi ethnic country and people in every state are very much aware about the avenues best suited for them in any business. Franchising definitely gives a chance for franchisees to understand the concept, think before investing, do research and then put in their hard earned money in any brand. Liv India Group’s, Speed Car Wash is a Delhi based brand but it operates 12 out of its 40 centers in South India. Jasmeet Singh, Vice President- Channel expansion, Liv India management Pvt Ltd says: “Owning and running a car wash business these days, is not mere business but, it’s one of the most lucrative and profitable businesses. We started with one outlet in Coimbatore in 2012 and got a very successful response and soon we started getting enquiries from neighboring cities in South. The demand for a professional car wash service was the key which motivated us to franchise thus reaching beyond our territory / limit.”

The growth of information technology (IT) hubs in the southern region have stimulated economic growth and attracted foreign investments too. Investors from different parts of the country are keen to take franchise rights of brands in South India. Established in 2003, Nandita's- The Beauty Zone is one of the leading chains of Organic Beauty Boutique and Unisex Spalon in South India. The brand has three outlets in South India. Nandita Sharma, CEO, Nandita’s - TBZ says: “Nandita’s - TBZ was born in a small city of Mysore. Initially giving out franchise rights in its vicinity is more easy and successful as the support is rendered time to time with ease.  Our brand has proved its success in south India as it is running successfully since last 11 years. Before we transcend borders, our aim is to create a strong base of the brand in south India and our operating strategy is to choose right people at the right place at the right time to create an Impact for both the investor and the brand.” At Cookie Man, franchisees are an integral part of the business. About 50 per cent of their 70 stores are franchisee-owned. The number stands at approximately 39 (number of franchisee-owned) stores across 27 (number of cities). For Cookie Man franchisees play an important role in not only bringing knowledge of local buying patterns but they also bring an entrepreneurial zeal that makes the business thrive. Anupam Saluja - CEO, Australian Food (I) Pvt. Ltd says: “Cookie Man currently has 21 outlets in southern India out of which nine are franchise stores. India is a country of vast differences and cookie consumption patterns vary from state to state. For example, West Bengal - and more specifically Kolkata - is traditionally a very high per capita consumer of biscuits, automatically allowing the franchisee to show good returns.”

Booming recruitment market

Just like other industries, even the recruitment sector is on a boom in Southern India. Morpheus Human Consulting currently has 16 franchisees in India and the Middle East who are helping the brand in this revenue stream. Morpheus has two outlets in Chennai and Coimbatore. Kailash Shahani, Founder, Morpheus Human Consulting Pvt Ltd opines: “As per the latest survey done by a leading portal company, recruitment market in Southern India is set to grow by 23 per cent which is far better than other regions. This business potential has created a sudden need to shift focus to this region. Our expansion in the Middle East has also ensured that we focus on southern India market considering 65 per cent of the Indian nationals comprised majorly from this region. We intend to add at least seven new franchise outlets which would cover Kerala, Tamil Nadu and Karnataka by the end of 2014.” 

Altering food preferences

The F&B sector in South India has also witnessed a major shift in taste. Much before the international food chains forayed into India, the regional markets were dominated by the local tastes and preferences. The general perception being that robust, wheat-based foods form a staple diet in north while the people of south India prefer a subtler rice-based diet. However, the consumption trends have undergone a sea change today. Subway operates more than 420 restaurants in India, out of which 127 are located in south India. Sanjiv Pandey, Marketing Manager, FAF, Subway Systems India Pvt. Ltd says: “Wheat-based products such as pizzas, burgers and sandwiches are received as well in Bangalore and Chennai, as in Delhi and Ludhiana. The concept of local taste and preferences is slowly fading, exposing people to a homogenous market. With its low start-up cost, simple operation and flexible floor plans, Subway concept makes for an appealing business model to be adopted by the potential franchisees.”

Chatar Patar, a Pani-Puri brand that has just hopped on the franchise bandwagon also sees huge prospects in South India. Out of 31 franchise outlets, the brand has two outlets in Cochin and Bengaluru and is further planning to grow there because of the returns and solidity the market offers. Prashant Kulkarni, Founder, Chatar Patar opines: “South India is a great market for North Indian food. Our business is definitely gaining heights there.”

Why operate a QSR in the South?

• Studies indicate there is a radical change in the consumption patterns of south Indian consumers, who have traditionally been known for their price sensitiveness.
• On the strategic front, there is a huge untapped potential in a fast emerging market.
• Over the last ten years, southern states of India have gained manifold in terms of business and commercial activity, leading to the increase in working population, which forms a majority of consumers for the international food brands.