India is the second-most populous country with over 1.3 billion people and is projected to be the world’s most populous country by 2027. The country’s economy is also expected to surpass that of the United States by 2035, making it the world’s largest economy.
The franchise business has been a shining star of India’s economy and it is time for the franchises to explore the opportunities in the smaller cities too and spread their wings. The smaller cities have a lot of potential and there are many people who are looking for good franchises to invest their money. The current state of the franchise business in India is very promising, where the industry is growing at a rapid pace and is expected to reach Rs 7,000 crore by 2025. Franchising contributes to nearly 4% of the Indian GDP and employs over 1.5 million people.
With such a large population and growing economy, the potential for growth in the franchise business is tremendous. Franchises are already well-established in India, with some of the world’s largest franchisors operating in the country. But there is still room for expansion, as only a small fraction of Indian businesses are franchises. The franchising sector in India is expected to grow at a compound annual rate of 30% through 2025. This growth will be driven by a number of factors, including an increasing middle class with disposable income, favourable government policies, and rising awareness of franchising as a business model.
With over 10,000 registered franchises and 3,500 active ones, the sector provides ample opportunities for entrepreneurs. The concept of franchising is still new in India and has tremendous potential for growth. Franchising offers several benefits to both investors and entrepreneurs. For investors, it is a relatively low-risk way to enter into a new market. For entrepreneurs, it provides an opportunity to start their own business with the support of an established brand. The Indian government has also been supportive of the franchise industry and has taken several measures to promote its growth. These include setting up a National Franchise Development Centre (NFDC) and launching a Franchise India Brand Show (FIBS). With a strong growth trajectory and supportive policies from the government, the franchise business is poised for further success in India.
There are several challenges associated with franchising in India. Firstly, the Indian market is very fragmented, with numerous small businesses competing for customers. This makes it difficult for franchisors to find suitable partners and also limits their ability to expand rapidly. Secondly, the legal framework governing franchising in India is still relatively undeveloped, meaning that there is little protection for either party in case of a dispute. This can make franchising a risky proposition for both franchisors and franchisees. Finally, many Indians are still unfamiliar with the concept of franchising, making it difficult to convince potential partners to sign up for a franchise agreement.
Despite these challenges, the franchise business model remains an attractive option for many companies looking to expand their presence in India. With its large population and growing economy, India offers a huge potential market for franchises. If you are thinking about expanding your business through franchising, it is important to be aware of these challenges and take steps to mitigate them.
Franchising can be a great way for entrepreneurs to get their businesses up and running quickly and with minimal risk. When you franchise, you are essentially buying into an already established brand and business model which can help you to hit the ground running. Overall, franchising can be a great option for entrepreneurs who are looking to start their own businesses with minimal risk and maximum support.
Views expressed above are the author’s own.
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