Entry India, LLC 1 Franchising Business in India Entry India, LLC [email protected]...

Entry India, LLC www.entryindia.com

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Franchising Business in India

Entry India, [email protected]


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Target Audience

Small & Medium Enterprises (SMEs) Start ups, and Non-Resident Indians (NRIs)

Who want to

Expand their business into India Start a new business in India Profit from opportunities in India


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Business, Economic and Social Environment Markets & Growth Prospects Legal and Regulatory Framework Special Incentives

What investors consider -1


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Fluidity of capital Flexibility of the labor pool Government receptivity to business Information communication technologies Private sector development infrastructure Legal systems to protect intellectual property rights Available scientific and human capital Cultural propensity to encourage creativity.

What investors considerSpecifics


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India Rising Most attractive socio-economic & business fundamentals Market least affected by the global recession World’s largest democracy: 1.2 billion population 100 million middle class in 2009 -> 580 million by 2025 ***** World’s 4th largest economy Largest English speaking nation in the world


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India Investment Options Large potential in retail, infra-structure,

healthcare, education …… Invest in Stocks, Bonds, Real Estate …. Start or expand your existing business to

India


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India Investment Options-2 If you have a business and want to expand it

to India, consider becoming a Franchisor

If you want to start a new business, consider becoming a Franchisee

NRIs instead of regularly sending money to your family in India, start a franchise for them


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Why Franchise in India Franchising is Big Business Globally

Over a million franchised outlets with sales of 2-3 trillion dollars The United States of America is at the forefront of the franchise boom

40 % of retail sale revenues are from franchising 50,000 Malls, 40,000 Supermarkets

Franchising has a Huge Growth ahead in India Relatively New Concept for India Around 1,200 Franchisors in the country (200 are foreign) More than 100,000 franchisees Current market size in India: $10 billion $20 billion by 2013 (30 % Growth Rate) 2% of the total Retail Sales 300 Malls, 1500 Supermarkets

Franchising infrastructure is in place in India


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Premier Franchising Resources

International Franchising Association (IFA) http://www.franchise.org/IFA represents all aspects of the franchise community and works to

protect, enhance and promote franchising.

The Franchising Association of India http://www.fai.co.in/Provides a one-stop shopping experience for franchising business


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Franchising Defined

Franchising is a method of doing business wherein a franchiser licenses brand, product and proven methods of doing business to a franchisee in exchange for a recurring payment. Various types of support are made available continuously by the franchiser to enable the franchisee to compete and grow.


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Franchisee Advantages

Franchising Reduces Business Risks 90% of start-ups fail in the first year. In a franchised

business, over 90% succeed. Proven business model, recognized brand, customer

acceptance Established methods and quality Pre-opening (site selection, financing etc) and operational

assistance: staff, training, advertising Wider market penetration Relatively low capital investment


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Franchisee Issuesin India

Some Loss of entrepreneurship loss of independence in doing and developing business, in

pricing, in new product introduction, in hiring etc. Legal and disclosure framework for franchises is not in

place Real estate markets are somewhat unstructured and

unrealistic, making it difficult for start-up ventures to invest. A franchisor’s problem may become your problem


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Franchisor Advantages

The franchisor gets easier access to capital for rapid growth

The franchisor leverages the franchisee’s knowledge of the domestic market & regulations

Franchisees are far more motivated to maximize sales and profits than salaried branch managers.

Franchisees are an important source of new marketing and product concepts


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Franchisor Issues

Liability of Parties UncertainNo Franchise specific legislation: the liability of either party is determined by the agreements between them or on the basis of general applicable laws

Possible loss of direct operational control Possible loss of Intellectual Property


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Franchisee Plan

Research Get Reports Attend tradeshows Evaluate strength of the franchisor Talk with existing Franchisees Work in an existing operation Get professional help in navigating through the paper

trail and due diligence Write a business plan


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Franchisor PlanPhase 1

Market Research Entry Strategy Legal &

Disclosure documents

Growth Strategy Business Plan

Phase 2Roll out planLocating the right partnerGovt. clearances and approvalsValuations and Negotiations

Phase 3Support ActivitiesAudits & controlsRoad map for franchise expansion


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Growth Sectors in India

Retail, Telecom, Education, Healthcare are fastest growing

Automotive, IT, Beauty, Tourism are fast catching up


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Example Education Franchising India

India is one of the largest markets for education in the world in terms of number of students.

Current Situation 400 active education franchisee owners in India. Informal and supplementary education has the lion’s share of

education franchising. Professional and vocational skills (Aviation, Hospitality, Hotel

Management, Finishing School, Retail Training, Financial Services, and Insurance are the most franchised followed by IT training.

NIIT, Aptech in IT education, Oxford and Cambridge in vocational learning, Hughes network for management etc.

Demand-supply mismatch for quality schooling 270 million students by 2020 They will need schools, teachers, training, jobs, housing,

entertainment…….


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Best Way to find Partnersfor US based companies

US Department Of CommerceGolden Key Service

buyusa.gov/india Appointments with pre-screened partners Profile on each Indian company/partner Post meeting de-briefing Available in New Delhi, Mumbai, Chennai, Calcutta,

Bangalore, Ahmedabad, and Hyderabad. Payment SME: $700; Large: $2,300


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Notwithstanding the current economic slowdown and certain regulatory issues, the franchising market (specially healthcare and education) has enough reasons to remain upbeat about its future in India.

To succeed Prepare thoroughly Focus on Establishing Solid Local Partnerships Get a legal firm and a CPA who have worked with foreign

businesses

Track Progress, Enjoy Profit

Summary


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Thank You

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