By: Prerna Pawar

Shagun Singh

Krish Desai

FRANCHISING IN INDIA(Formats, Success stories and

legalities)

Types of franchising formats in India

Investment franchising

Management franchise

Business format franchising

Manufacturing Franchise

Product / Trademark Franchise

Distributorships / Dealers / Agencies

Investment franchising

Franchisor invests large amounts of money into the business and finance franchises without working directly within the business

The franchisee will employ a team of managers to ensure the smooth running of the franchise and will not have to work there themselves

Management franchise

Includes office based work

It is best for those with management experience and the ability to work with a number of staff

Requires skilled staff with experience in administration and dealing with clients

It requires some marketing skills to create interest in the services offered to potential business clients

Business format franchising

The format of franchising permits the franchisee to use the franchisor’s product/services, trade name, trade mark and most importantly the prescribed business format

Franchisees have the identity of Franchisor company-right from store design to service standards to deliveries

Examples: McDonalds, KFC, Dominos, Barista Coffee Chain

Manufacturing franchise

These types of franchises provide an organization with the right to manufacture a product and sell it to the public, using the franchisor's name and trademark

Examples:

Product / Trademark franchise

Manufacturers use the product franchise to govern how a retailer distributes their product

The manufacturer grants a franchisee the authority to distribute goods by the manufacturer and allows the owner to use the name and trademark owned by the manufacturer

Example: Bata India

Distributorships, Agencies and Dealers

A parent company grants the right to the franchisee to sell their products

The term is commonly used to describe wide variety of business relationships which may or may not fall into the legal definition

Examples:

Dominos franchise story

• Founded in 1960 by Tom Monaghan

• Goal: open three pizza delivery stores.

• By franchising, Domino’s Pizza has become the world leader in pizza delivery

• Currently there are 9,350 stores in 70+ international markets.

Franchisor –Franchisee relationship

Domino’s Pizza Group (DPG) is known as a ‘master franchisee’.

Franchisees are both DPG’s customers and

business partners.

DPG operates service level agreements which clearly set out the high standards of service and support

The DPG functions that provide the majority of regular and visible support to franchisees - information systems, foodservice, flawless execution (training and operations) and marketing - are accountable, transparent and managed by skilled and experienced people who are motivated to make franchisees successful

Four week intensive Franchise Development Program: designed to equip with the knowledge and skills required

The Bata Way

 It is a large, family-owned shoe company established in Zlin, modern-day Czech Republic and currently headquartered in Lausanne, Switzerland

Three business units worldwide – Bata Metro Markets, Bata Emerging Markets and Bata Branded Business

Retail presence in over 70 countries and production facilities in 27 countries

In its history the company has sold more than 14 billion pairs of shoes

Bata India is the largest retailer and leading manufacturer of footwear in India and is a part of the Bata Shoe Organization.

The Company went public in 1973 when it changed its name to Bata India Limited 

Large non retail distribution network through its urban wholesale division caters to customers through over 30,000 dealers

Legalities in franchising

Protection of Intellectual Property Rights

Why is a franchising law required?

Application of Multiple Legislation Absence of Disclosure Requirements 

Applicability of Laws of other Countries

Lack of Proper Format for Franchising Agreements

Liability of Parties Uncertain

Thank You!