Why The Franchise Industry May Be Economy's Bright Spot Of India
Why entrepreneurs are in active look for delving into the franchise market. There are hope so many reasons. The franchisers are heavily known for owning their brand of products and an existing business model, which it makes easier for entrepreneurs for operating and function as their franchises.
The franchise market is booming from the days it was quite a while now. India has become the hot target for many multinational companies who are looking to foray into the country’s domestic market. Entrepreneurs have utilised this opportunity to raise their profits by taking franchises of companies like McDonalds, KFC, OYO, MakeMyTrip, Patanjali, etc. Take a look at any Indian metro city or venture into any urban locale and you will see the area dotted with various brand outlets, selling everything from food to clothing.
According to Franchise India, experts have witnessed a growth of 30-35 per cent over the last five years in franchising. It is estimated that the global turnover is around RS 938 billion. The franchising sector contributes around 1.8 per cent to the Indian GDP and is predicted to contribute nearly 4 per cent by 2022
Consumer Affordable Market
India is one of the fastest-growing economies in the world and there is a lot of potential in the franchise business. With an exponentially growing young population, the franchise space in India will continue to witness a rise in the coming years. The expansion and escalation of these franchise businesses will also offer avenues to other people by creating multiple job opportunities across many sectors.
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 percent 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 percent 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.
Challenges In Way
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.
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