Franchising In India W.R.T. Baskin Robbins shiny.doc

8/17/2019 Franchising In India W.R.T. Baskin Robbins shiny.doc

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Franchising In India W.R.T. Baskin Robbins

Index

SR NO. TOPIC PAGE NO.1 Introduction 1-2

2 Introduction to Franchising 3-7

3 usin!ss For"at Franchising and Product # Trad! Na"!

Franchising

7-$

% E"!rging Tr!nds in Franchising 1&-13

' E(o)ution o* Franchising in th! +or)d 1%-1'

, E(o)ution o* Franchising in India 1,-1

7 % Rs o* Franchising 1$-2&

Franchising Fra"!/or0 2&-22

$ O**!r ocu"!nt 23-2'

1& od!s o* Franchising 2,-2

11 Ad(antag!s # isad(antag!s o* Franchising 2$-31

12 Issu!s in Franchising in Indian ar0!t 32-3313 Franchis! a/s in India 3%-37

SR.

NO.

TOPIC PAGE NO.

1 4istor5 o* as0in Ro66ins 3-%1

2 ar0!ting Strat!gi!s o* as0in Ro66ins %2-%7

3 Co"!titors # Pro"otions o* as0in Ro66ins %-'2

% Cas! Stud5-Th! oot Stor!s '3-'

' i6)iograh5 '$

EXECUTIVE SUMMARY

Franchising is a uni8u! and d5na"ic 6usin!ss "!thod. A succ!ss*u) *ranchis! /i)) a))o/ 6oth

th! *ranchisor and *ranchis!! to r!a th! 6!n!*its. 4o/!(!r9 *ranchising shou)d not 6!

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consid!r!d a *ast road to *ortun!9 nor shou)d it 6! us!d to assist a 6usin!ss that is not

!r*or"ing /!)).

:nd!rstanding9 ti"! and "on!5 ar! a)) r!8uir!d to succ!ss*u))5 !sta6)ish a *ranchis!. Ti"!

r!8uir!d *or s!tting u a *ranchis! cou)d 6! u to thr!! 5!ars and th!n it cou)d 6! a *urth!r

thr!! to *i(! 5!ars 6!*or! th! *ranchisor 6!gins to "a0! a ro*it *ro" th! *ranchis!.

!n!*its o* *ranchising inc)ud! th! *ranchis!!s *unds and )a6or ar! us!d to !;and th!

6usin!ss< *ranchisor can 6! *r!! *ro" th! da5-to-da5 o!rations o* th! 6usin!ss< th!

*ranchisor can s!! a ro*it /ithout !;c!ssi(! in(!st"!nt in th! 6usin!ss< *!/!r sta**

"anag!"!nt ro6)!"s< !ach *ranchis!! /i)) 6! th! o/n!r o* th! 6usin!ss and th!r!*or! "or!

d!t!r"in!d to succ!!d and "or! *ranchis! 6usin!ss!s can 6! sr!ad o(!r a gr!at!r g!ograhic

ar!a9 th!r!*or! incr!asing th! oo) o* ot!ntia) custo"!rs.

Franchising is on! a(!nu! that can 6! us!d to succ!ss*u))5 !;and a 6usin!ss. an5 o* th!

/or)ds )arg!st cororations ha(! us!d *ranchising to s!!d u th!ir gro/th as g)o6a) 6rands.

i0! an5 6usin!ss (!ntur!9 a *ranchis! n!!ds to 6! "anag!d corr!ct)5.

Th!r! ar! s!(!ra) guid!)in!s to o!rat! /ithin *or thos! consid!ring !;anding a 6usin!ss (ia

*ranchising. Th! *ranchisor shou)d o/n and o!rat! at )!ast on! out)!t 6!*or! *ranchising

co""!nc!s. Th! *ranchisor /i)) th!n 6! a6)! to r!dict an5 ro6)!"s and r!cti*5 th!s! 6!*or!

oth!rs in(!st in th! 6usin!ss.

A)so9 th! 6usin!ss "ust 6! ro*ita6)! and 6! a6)! to 6! !asi)5 r!)ica6)!. !*or! an5

!;ansion co""!nc!s9 th! *ranchisor "ust r!c!i(! ro*!ssiona) *ranchis! ad(ic!. A d!tai)!d

o!rations "anua) "ust 6! /ritt!n 65 th! *ranchisor and th! *ranchisor "ust a)so !sta6)ish a

sound training rogra". Th! *ranchisor "ust 6! 0!!n to d!(!)o th! 6usin!ss and 6! o!n to

sugg!stions that cou)d 6!n!*it th! *ranchis! and to "aintain standards to !nsur! consist!nc5

across th! n!t/or0. Th! *ranchis! shou)d ha(! a sound "ar0!ting ca"aign.

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An un*ortunat! statistic is that an !ntr!r!n!ur has a high chanc! o* *ai)ur! in th!ir *irst *i(!

5!ars o* o!rating th! 6usin!ss. !*or! *ranchising is chos!n as an !;ansion "!thod9 a

6usin!ss shou)d 6! trading *or at )!ast thr!! to *i(! 5!ars to sho/ it has a ro*ita6)! conc!t9

d!"and *or its good or s!r(ic! and a 6usin!ss structur! a6)! to suort *ranchis!!s in "an5

di**!r!nt )ocations. I* th! 6usin!ss *ai)s to "!!t th!s! guid!)in!s9 it "a5 6!co"! anoth!r

statistic o* *ai)!d 6usin!ss.

Franchis! consu)tants shou)d 6! aroach!d *or ad(ic! r!garding !;ansion (ia *ranchising.

It is crucia) *or ot!ntia) *ranchisors to s!a0 to th!s! !;!rts.

ITR!"UCTI!

usin!ss!s can 6! start!d in di**!r!nt /a5s. Th!r! ar! so)! rori!torshi9 artn!rshis and

=oint (!ntur!s. ut a"ong th!s!9 th! r!c!nt tr!nd o* !;anding 6usin!ss through a /id!

n!t/or0 is 0no/n as *ranchising. ut in addition to *ranchising9 th!r! ar! t/o oth!r ou)ar

"!thods 65 /hich 6usin!ss!s !;and th!ir "ar0!t and distri6ution chann!)s>

1. istri6utorshis

2. ic!nsing

In a distri6utorshi9 th! distri6utor usua))5>

? has a contractua) r!)ationshi /ith th! su)i!r

? 6u5s *ro" th! su)i!r in 6u)0 and s!))s in s"a))!r 8uantiti!s

? is *a"i)iar /ith )oca) "ar0!ts and custo"!rs

? "a5 do 6usin!ss /ith "an5 co"ani!s9 "or! than =ust th! su)i!r@roduc!r

? "a5 not r!c!i(! contractua) suort and training *ro" th! su)i!r@roduc!r )i0! a*ranchis!!.

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So"! distri6ution arrang!"!nts ar! si"i)ar to *ranchis!s and (ic! (!rsa. A *ranchis!! /ith a

gr!at d!a) o* )!!/a5 in ho/ to run th! 6usin!ss "a5 )oo0 )i0! an ind!!nd!nt distri6utor. A

distri6utor "a5 6! su6=!ct to "an5 contro)s 65 th! su)i!r@roduc!r and 6!gin to r!s!"6)! a

*ranchis!.

So"! ou)ar distri6utorshis inc)ud!>

a. A"/a5

6. Co)or ! !auti*u) Cos"!tics

c. norr Sou B!ndor

ic!nsing9 on th! oth!r hand9 a))o/s a )ic!ns!! to a5 *or th! rights to us! a articu)ar

trad!"ar0. :n)i0! *ranchis!s9 in /hich th! *ranchisor !;!rts signi*icant contro) o(!r th!

*ranchis!!s o!rations9 )ic!nsors ar! "ain)5 int!r!st!d in co))!cting ro5a)ti!s and su!r(ising

th! us! o* th! )ic!ns! rath!r than in*)u!ncing th! o!rations o* th! 6usin!ss.

So"! ou)ar )ic!nsors inc)ud!>

a. N!tsca! Co""unications

6. A)! Co"ut!rs

c. Canon Inc.

d. Co"a8 Co"ut!r

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ITR!"UCTI! T! FRAC#ISI$

A si!a6)! roortion o* th! Indian ou)ation sti)) )i(!s in th! (i))ag!s and has )i"it!d

urchasing o/!r9 India a)so has a )arg! and gro/ing "idd)! c)ass and a "uch s"a))!r

/!a)th5 s!g"!nt o* consu"!rs. Th! Indian "ar0!t has a s!g"!nt o* aro;i"at!)5 1'&-2&&

"i))ion !o)! /ith gro/ing urchasing o/!r9 /ho s!!0 roducts and s!r(ic!s *or a 6!tt!r

)i*!st5)!. Aro;i"at!)5 2 !rc!nt o* Indians ha(! a !r caita inco"! in !;c!ss o* D139&&&9

/hich trans)at!s into a s!g"!nt o* 2& "i))ion r!)ati(!)5 /!))-o** consu"!rs. This is s"a)) in

co"arison to Indias tota) ou)ation9 6ut sti)) co"ris!s a su6stantia) "ar0!t s!g"!nt.

Aro;i"at!)5 !rc!nt o* Indians ha(! a !r caita inco"! o* "or! than D39'&&9 or a6out

& "i))ion !o)!< "or! than 1&& "i))ion Indians ha(! a !r caita inco"! in !;c!ss o*

D29&&.

Franchising in so"! *or" has 6!!n o!rating in India *or s!(!ra) d!cad!s. On! /!)) 0no/n

!;a")! o* this is th! ata sho! chain9 start!d in th! 1$,&s. 4o/!(!r9 *ranchising in its

"od!rn conc!t has 6!co"! ou)ar in India on)5 in r!c!nt 5!ars. Th! industr5 is sti)) (!r5

"uch in an !(o)utionar5 stag!. N!/ *ranchis! 6usin!ss conc!ts no/ san across di(!rs!

s!ctors as !ducation9 s!cia)i!d *ood s!r(ic!s9 h!a)thcar!9 gar"!nts and aar!)9

!nt!rtain"!nt9 *itn!ss and !rsona) groo"ing c)inics9 station!r5 and gi*t shos9 and couri!r

s!r(ic!s to na"! a *!/.

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As th! s!r(ic! !cono"5 gro/s in India9 oortuniti!s *or *ranchising /i)) incr!as!. Gi(!n th!

curr!nt 6oo" in th! r!tai)ing and !nt!rtain"!nt s!ctors in India9 an incr!asing nu"6!r o*

)a5!rs ar! s!!ing *ranchising as a gro/th otion. According to industr5 !;!rts9 th! Indian

*ranchis! !cono"5 curr!nt)5 accounts *or ' !rc!nt o* th! countr5Hs GP. According to a

stud5 conduct!d 65 th! F!d!ration o* Indian Cha"6!rs o* Co""!rc! and In(!st"!nts

FICCIJ9 th!r! ar! aro;i"at!)5 ,&& acti(! *ranchis!rs and "or! than %&9&&& *ranchis!!s in

India curr!nt)5 across (arious s!ctors.

Th! sa"! stud5 !sti"at!s that tota) annua) sa)!s turno(!r achi!(!d 65 *ranchis!d 6usin!ss!s

in India is in th! rang! o* D1.,-2.1 6i))ion. Franchising is ois!d to sur !cono"ic gro/th

6!caus! it !ncourag!s ri(at! !nt!rris! /ith no dang!r o* *)ight o* caita)9 and 6!caus! ito**!rs th! ot!ntia) to !sta6)ish roducts and s!r(ic!s that "!!t g)o6a) standards. :n)i0! in

th! :.S. and so"! countri!s in th! /!st9 India do!s not ha(! a s!ci*ic )a/ on *ranchising as

5!t. Franchising is co(!r!d /ithin th! 6road d!*inition o* trans*!r o* t!chno)og5 contain!d in

do"!stic )!gis)ation. A )!ga) *ra"!/or0 *or n!/ *ranchis!rs int!r!st!d in s!tting u "ast!r

*ranchis!s in India !;ists9 in t!r"s o* 6rand rot!ction and ru)!s r!garding a5"!nt o*

*ranchis! *!!s. 4o/!(!r9 th!r! is a gro/ing n!!d to i"ro(! this r!gu)ator5 *ra"!/or0.

Fo))o/ing th! !cono"ic )i6!ra)iation o* 1$$19 s!(!ra) *or!ign co"ani!s /ith strong 6rand

na"!s !sta6)ish!d a r!s!nc! in India through *ranchising. In th! hosita)it5 and *ood s!r(ic!

industri!s9 this has 6!!n th! r!*!rr!d "!thod *or starting o!rations in India. So"!

int!rnationa) co"ani!s that o!rat! through *ranchis!s inc)ud!> 4!rt9 A(is and udg!t *or

car r!nta)< Radisson9 !st +!st!rn and Kua)it5 Inns *or hot!)s< !ntuc05 Fri!d Chic0!n9

o"inos Pia9 TGI Frida59 Ru65 Tu!sda59 Su6/a59 and as0in Ro66ins *or *ood. Pia 4ut

and o"inos Pia ha(! o!n!d "an5 out)!ts and cona)ds has 6!!n o!n *or 6usin!ss

sinc! 1$$,. Si"i)ar)59 Indian co"ani!s /ith strong 6rand r!cognition ar! a)so using th!

*ranchising rout! to !;and 6usin!ss (o)u"!s. Archi!s *or gi*t/ar!9 RF *or auto"oti(!

tir!s9 NIIT *or co"ut!r training schoo)s and Ao))o 4osita)s *or h!a)thcar! ar! !;a")!s.

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Wha% is Franchising&

Franchising in g!n!ra) "!ans granting o* c!rtain rights 65 on! art5 th! *ranchisorJ to

anoth!r th! *ranchis!!J in r!turn *or a su" o* "on!5. Th! *ranchis!! th!n !;!rcis!s thos!

rights und!r th! guidanc! o* th! *ranchisor.

Th! a6o(! d!*inition is a (!r5 g!n!ra) in its natur! and !nco"ass!s "an5 di**!r!nt *or"s

o* )ic!nsing arrang!"!nts. Th! 6usin!ss *or"at o* *ranchising9 6!ing th! i"ortant on!9

can 6! d!*in!d as th! contractua) )ic!ns! grant!d 65 on! !rson th! *ranchisorJ to anoth!r

th! *ranchis!!J /hich>

• P!r"its or r!8uir!s th! *ranchis!! to carr5 on a articu)ar 6usin!ss using

th! *ranchisors 0no/-ho/ und!r th! *ranchisors 6rand as an

ind!!nd!nt 6usin!ss<

• A))o/s th! *ranchisor to !;!rcis! continuing contro) o(!r th! "ann!r in

/hich th! *ranchis!! carri!s on th! *ranchis!d 6usin!ss<

• O6)ig!s th! *ranchisor to ro(id! th! *ranchis!! /ith ongoing suort in

carr5ing on th! *ranchis!d 6usin!ss.

As a co""!rcia) "att!r9 th! agr!!"!nt in!(ita6)5 r!8uir!s th! *ranchis!! !riodica))5

during th! !riod o* th! *ranchis! to a5 to th! *ranchisor su"s o* "on!5 in

consid!ration *or th! *ranchis! and @ or goods and @ or s!r(ic!s ro(id!d 65 th!

*ranchisor to th! *ranchis!!.

The In%erna%iona' Franchise Associa%ion (IFA) d!*in!s *ranchising as a Lcontinuing

r!)ationshi in /hich th! *ranchisor ro(id!s )ic!ns!d ri(i)!g! to do 6usin!ss9 )us

assistanc! in organiing9 training9 "!rchandising and "anag!"!nt in r!turn *or a

consid!ration *ro" th! *ranchis!!M.

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Who is a Franchisor&

4! is th! o/n!r o* th! *ranchis!d s5st!". It o/ns th! 0no/-ho/ o* th! conc!t and th!

6rand na"!. It grants *ranchis!s to third arti!s.

Who is %he Franchisee&

4! is th! on! /ho has 6!!n grant!d th! right 65 th! *ranchisor to carr5 on th! 6usin!ss

using th! *ranchisors 0no/-ho/ and th! 6rand na"!. No/9 d!!nding on th! rights

grant!d9 *ranchis!!s can 6! c)assi*i!d into>

1. :nit Franchis!! This is th! si")!st and "ost co""on *or" o* *ranchising. This

*ranchis!! is grant!d th! right to o!rat! on! unit or out)!t o* th! *ranchis!d

6usin!ss.

2. ast!r Franchis!! 4! is g!n!ra))5 grant!d th! right to a su6stantia) t!rritor5. It

/i)) th!n grant unit *ranchis!s to unit *ranchis!!s throughout th! t!rritor5. Th!

ast!r Franchis!! n!!ds to ha(! su**ici!nt dri(! and r!sourc! to *u))5 !;)oit th!

t!rritor5 and contro) th! unit *ranchis!!s t!rritor5.

3. R!giona) Franchis!! In a g!ograhica))5 )arg! ar!a a *ranchisor9 or a ast!r

Franchis!! "a5 d!cid! that it is co""!rcia))5 aroriat! to *urth!r di(id! th!

t!rritor5 u /ith s!arat! r!gions and grant a ast!r Franchis! *or !ach s!arat!

r!gion. Th!s! *ranchis!s ar! 0no/n as r!giona) *ranchis!s or so"!ti"!s ar!a

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%. u)ti)! Franchis!s So"! unit *ranchis!!s o!rat! not =ust on! unit9 6ut s!(!ra).

Th!s! ar! r!*!rr!d to as "u)ti)! *ranchis!s and usua))5 ha(! a )arg! nu"6!r o*

indi(idua) unit *ranchis! arrang!"!nts on! *or !ach unit.

'. !(!)o!rs arg! Cororations so"!ti"!s r!*!r to !;)oit th!ir t!rritor5 65

o!ning out)!ts th!"s!)(!s. Th!s! ar! 0no/n as d!(!)o!rs. Th!5 ha(! a sing)!

d!(!)o!r agr!!"!nt9 /hich a))o/s th!" to o!n "an5 units. Th!s! ar! i)ot

o!rations so that th!5 6!co"! *u))5 *a"i)iar /ith th! 6usin!ss at an o!rationa)

)!(!) and can )oca)i! it so as to i"ro(! its chanc!s o* succ!ss.

B*siness For+a% Franchising

usin!ss *or"at *ranchising o**!rs a (ari!t5 o* s!r(ic!s to th! *ranchis!!s. Th!5 ro(id! th!

*ranchis!! us! o* trad!"ar0s and )ogos9 as /!)) as a co")!t! s5st!" o* doing 6usin!ss. Th!5

/i)) assist th! *ranchis!! /ith sit! s!)!ction9 int!rior )a5out and d!sign9 hiring and training9

ad(!rtising and "ar0!ting9 roduct su)5 and "or!. Th! *ranchis!! a5s an u *ront

*ranchis! *!! and agr!!s to a5 continuing ro5a)ti!s to th! *ranchis!r that h!) th! *ranchis!r

ro(id! r!s!arch9 d!(!)o"!nt and suort *or th! !ntir! s5st!".

Th!r! ar! "an5 !;a")!s o* 6usin!ss *or"at *ranchising9 inc)uding *ast *ood r!staurants9

auto"oti(! s!r(ic!s9 !stat! ag!nts9 con(!ni!nc! stor!s9 r!cruit"!nt ag!nci!s9 hairdr!ss!rs !tc.

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The %,-e ino'es %hree charac%eris%ics/

1. Th! *ranchis!! s!))s goods or s!r(ic!s /hich "!!t th! *ranchisors 8ua)it5 standards

in cas!s /h!r! th! *ranchis!! o!rat!s und!r th! *ranchisors trad! "ar09 s!r(ic!

"ar09 trad! na"!9 ad(!rtising or oth!r co""!rcia) s5"6o) d!signating th! *ranchisor

"ar0J or /hich ar! id!nti*i!d 65 th! *ranchisors "ar0<

2. Th! *ranchisor !;!rcis!s signi*icant assistanc! in9 th! *ranchis!!s "!thod o*

o!ration.

3. Th! *ranchis!! is r!8uir!d to "a0! a a5"!nt to th! *ranchisor or a !rson a**i)iat!d

/ith th! *ranchisor at an5 ti"! 6!*or! to /ithin si; "onths a*t!r th! 6usin!ss o!ns.

0rod*c% 1 Trade a+e Franchising

Product and trad! na"! *ranchising g!n!ra))5 is associat!d /ith industri!s such as

auto"oti(!9 !tro)!u" and so*t drin0. This t5! o* *ranchising do!s not inc)ud! ro5a)t5 *!!s.

Th! *ranchis!r ro(id!s trad!"ar0s and )ogos9 nationa) ad(!rtising ca"aigns9 6ut "ost

i"ortant)59 roduct.

This t5!9 a)so o**!rs thr!! charact!ristics>

1. Th! *ranchis!! s!))s goods or s!r(ic!s /hich ar! su)i!d 65 th! *ranchisor or a !rson

a**i)iat!d /ith th! *ranchisor<

2. Th! *ranchisor assists th! *ranchis!! in an5 /a5 /ith r!s!ct to s!curing accounts *or th!

*ranchis!!9 or s!curing )ocations or sit!s *or (!nding "achin!s or rac0 dis)a5s.

3. Th! *ranchis!! is r!8uir!d to "a0! a a5"!nt to th! *ranchisor or a !rson a**i)iat!d /ith

th! *ranchisor at an5 ti"! 6!*or! or /ithin si; "onths a*t!r th! 6usin!ss o!ns.

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Franchising "a5 s!!" )i0! an !as5 /a5 to start on!s o/n 6usin!ss and "an5 ti"!s it is =ust

that. 4o/!(!r9 in(!sting in a *ranchis! is no guarant!! that 5ou /i)) 6! succ!ss*u).

Thus9 succ!ss in *ranchising /i)) d!!nd on thr!! 0!5 *actors< th! a6i)it5 to "a0! th!

in(!st"!nt to s!cur! th! *ranchis! and o!n it *or 6usin!ss9 th! car! /ith /hich 5ou s!)!ct th!

*ranchis!9 and "ost i"ortant)5 th! dri(! and a"6ition to "a0! it succ!ss*u).

Wha% is a Franchise 2ee&

A *!! aid 65 *ranchis!! to a *ranchis!r. :S standard accounting ractic! r!8uir!s that

*ranchis! *!! r!(!nu! shou)d 6! r!cogni!d /h!n a)) "at!ria) s!r(ic! or conditions r!)ating to

th! sa)! ha(! 6!!n su6stantia))5 !r*or"!d or satis*i!d 65 th! *ranchis!r. It is th! ro5a)ti!s or

a c!rtain *!!s aid to th! *ranchis!! 65 th! *ranchisor in !;chang! o* th! rights to "ar0!t th!

roduct or th! s!r(ic!. Th! rincia) *!! in *ranchisingoth!r than th! *ranchis! *!!is th!

ro5a)t5 *!! or9 in so"! s5st!"s9 th! continuing ro5a)t5. This r!*!rs to th! ch!c0s that n!!ds to

6! s!nt to th! *ranchisor on a routin! 6asis throughout th! t!r" o* th! agr!!"!nt. Qou a5this *or sta5ing in th! s5st!". +hi)! it (ari!s *ro" *ranchisor to *ranchisor9 th! ro5a)t5 is

t5ica))5 ca)cu)at!d as a !rc!ntag! o* 5our sa)!s. On! "a5 6! r!8uir!d to s!nd th! a5"!nt

!ach "onth9 !ach /!!0 or on so"! oth!r r!gu)ar sch!du)! to th! *ranchisor. an5 *ranchisors

toda5 dont !(!n n!!d to s!nd th!" a ch!c0. +h!n 5ou sign th! *ranchis! agr!!"!nt9 5ou

gi(! th!" !r"ission to r!ach into 5our ch!c0ing account and /ir! trans*!r th! a5"!nt

dir!ct)5 to th!".

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EMER$I$ TRE"S I FRAC#ISI$

As /!)) as d!(!)oing into a tru)5 int!rnationa) conc!t9 6usin!ss *or"at *ranchising has

"anag!d to !;t!nd its r!ach into "an5 di**!r!nt industr5 s!ctors and this tr!nd is s!t to

continu!. Initia))59 th! conc!t /as th! do"ain o* *ast-*ood o!rators. 4o/!(!r9 *ranchising

can !asi)5 6! adat!d to th! n!!ds o* a)"ost an5 industr5 s!ctor that r!8uir!s an !**!cti(! and

!**ici!nt distri6ution chann!). Toda59 a )arg! (ari!t5 o* 6usin!ss s!ctors ar! !;anding

succ!ss*u))5 und!r th! u"6r!))a o* *ranchising.

Oth!r tr!nds ar! !"!rging that /i)) a**!ct a)) *ranchisors9 no "att!r /hich industr5 s!ctor

th!5 6!)ong to. So"! o* th!s! ar! discuss!d 6!)o/.

3. Techno'og,

A r!)ati(!)5 n!/ i"!tus *or *ranchising co"!s *ro" th! n!!d to 0!! u /ith t!chno)ogica)

ad(anc!s. In addition to issu!s in(o)(ing "anag!"!nt contro) and int!rna) co""unications9

IT is 6!co"ing incr!asing)5 i"ortant in th! *i!)d o* +!6-6as!d s!))ing.

4. $ro5%h -ros-ec%s con%in*e %o 'ook brigh%

A)though *ranchising is !;tr!"!)5 /!)) !sta6)ish!d in th! :SA9 o6s!r(!rs r!ort that th!

s!ctor is at th! thr!sho)d o* a n!/ gro/th surt. This is a c)!ar signa) that oth!r countri!s9

/h!r! *ranchising has not r!ach!d !(!n a third o* th! !n!tration )!(!)s r!cord!d in th! :SA9

can !;!ct to s!! *ranchising ta0! o** )i0! n!(!r 6!*or!.

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6. Shi2% %o5ards serices

Pou)ations in "an5 o* th! "or! d!(!)o!d countri!s !;!ri!nc! a shi*t to/ards rich in

ass!ts9 short on ti"!. This dri(!s th! d!(!)o"!nt o* !rsona) s!r(ic!s *ranchis!s9 *ro" ia

d!)i(!r5 to ho"! c)!aning9 ho"! r!air s!r(ic!s and !(!n car! *or th! 6!d-ridd!n or ag!d.

7. Franchise 'egis'a%ion

On! "a=or chang! that has ta0!n )ac! in *ranchising /or)d/id! is in th! *i!)d o* )!gis)ation.

+hi)! "ost countri!s initia))5 acc!t!d that *ranchising cou)d 6! contro))!d through a

co"6ination o* !;isting contract )a/ and s!)*-r!gu)ation9 an incr!asing nu"6!r ar! no/"o(ing to/ards s!ci*ic *ranchis! )!gis)ation.

This has 6!co"! n!c!ssar5 6!caus! th! /!))-docu"!nt!d succ!ss o* *ranchising has attract!d

a nu"6!r o* r!c0)!ss or !(!n *raudu)!nt o!rators.

Th! :SA /as th! *irst countr5 to introduc! s!ci*ic *ranchis! )!gis)ation. or! r!c!nt)59

Austra)ia and s!(!ra) countri!s /ithin th! Euro!an :nion *o))o/!d suit9 a)though it "ust 6!

said that th!ir )!gis)ation is )!ss s!(!r! than that introduc!d in th! :SA.

8. Franchisee -ro2i'e

In th! ast9 *ranchisors r!*!rr!d to attract *ranchis!!s /ho /ou)d 6! cont!nt to o!rat! on!

unit hands-on. an5 *ranchisors continu! a)ong this ath 6ut th!r! is r!ssur! on

th!" to chang! th!ir aroach. +ith th! notion o* a =o6 *or )i*! 6!co"ing

incr!asing)5 o6so)!t!9 cororat! "anag!rs ar! !nt!ring th! *ranchis! ar!na as

ros!cti(! *ranchis!!s. Th!s! indi(idua)s /ant a )arg!r i!c! o* th! i! than on!

unit can o**!r th!"9 and th!5 ha(! th! !;!rtis! and th! *unds to suort this.

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Franchisors ha(! 6!!n 8uic0 to r!a)i! that it is !asi!r to gro/ th! 6rand /ith th! h!) o* a

s"a))!r grou o* aggr!ssi(! *ranchis!!s rath!r than /ith a )arg! nu"6!r o* 5!st!r5!ars

*ranchis!!s /ho /!r! cont!nt to )oo0 a*t!r on! unit as )ong as it !arn!d th!" a r!asona6)!

)i(ing. This chang! in attitud! cr!at!s signi*icant n!/ cha))!ng!s.

• Not !(!r5 t5! o* 6usin!ss )!nds its!)* to "u)ti-unit o/n!rshi. :n)!ss s5st!"s9

roc!ss!s and /or0*)o/s can 6! standardi!d9 an a6s!nt!!-o/n!r cou)d soon )os!

contro). In !**!ct9 th! *ranchis! n!t/or0 /ou)d soon *ind its!)* in a si"i)ar situation to

a 6ranch o!ration that d!!nds on sa)ari!d "anag!rs.

• Not !(!r5 *ranchis!! is cut out to 6! a "u)ti-unit o/n!r. This d!"ands ad(anc!d

"anag!"!nt s0i))s and th! /i))ingn!ss to )a5 *or high sta0!s. Indi(idua)s "ust 6!

car!*u))5 ass!ss!d to !nsur! succ!ss*u) )ac!"!nt.• Not !(!r5 *ranchisor can hand)! "u)ti-unit *ranchis!!s !**!cti(!)5.

• Th! ca)i6r! o* *ranchis!! /ho 8ua)i*i!s *or "u)ti-unit o/n!rshi is )i0!)5 to 6! a no-

nons!ns! !rson /ho !;!cts to s!r(ic! )us *ro" th! *ranchisor. This h!)s dri(!

th! gro/th o* th! 6rand 6ut *ranchisors n!!d to 6! ad!8uat!)5 r!ar!d *or th!

cha))!ng!s it os!s.

• Th! dang!r !;ists that a (!r5 strong "u)ti-unit *ranchis!! 6!gins to !;!rt undu!

in*)u!nc! on th! n!t/or0s strat!gic dir!ction. Th! *ranchisor "ust 6! on th! )oo0out

*or this and r!ass!rt his@h!r )!ad!rshi osition th! "o"!nt a cha))!ng! is r!s!nt!d.

• Anoth!r i"ortant tr!nd in *ranchising is th! inc)usion o* indi(idua)s /ho t!nd!d to

)a5 a )!ss!r ro)! in *ranchising in th! ast. +o"!n ar! sti)) a "inorit5 6ut catching u

*ast. In South A*rica9 th! 6)ac0 "a=orit5 /hich /as *or"!r)5 !;c)ud!d *ro" th!

!cono"ic "ainstr!a" is assu"ing an !(!r-incr!asing ro)!. Franchising is th! id!a)

(!hic)! *or th! i")!"!ntation o* sustaina6)! EE initiati(!s.

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9. Fick'e cons*+ers

Traditiona))59 consu"!rs !;!ct!d 6rand!d o**!rings to 6! standardi!d and r!dicta6)! and

!ss!ntia))59 this has not chang!d. 4o/!(!r9 a n!/ g!n!ration o* consu"!rs is !"!rging that

!;!cts a custo"i!d aroach. For !;a")!9 *ranchisors "o(ing into *or!ign countri!s can

no )ong!r r!)5 on 6)ind acc!tanc! o* th!ir standard o**!ring 65 )oca) consu"!rs. To "aintain

6rand consist!nc5 und!r th!s! circu"stanc!s can 6! !;tr!"!)5 di**icu)t. A "idd)!-o*-th! road

aroach is usua))5 6!st9 6ut this r!8uir!s car!*u) t!sting o* !(!r5 as!ct o* i"ag!9 roduct

rang! and d!)i(!r5 "!chanis"s. This rout! is not r!co""!nd!d *or th! *aint-h!art!d.

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EV!:UTI! !F FRAC#ISI$ I T#E W!R:"

Franchising is a t!r" that co"!s *ro" th! Fr!nch )anguag! and "!ans to 6! *r!! *ro"

s!r(itud!. It /as d!(!)o!d as a 6usin!ss "!thod in th! :nit!d Stat!s in 1'&s. ut th!r! ar!

so"! historians /ho argu! that as a "!thod o* )ic!nsing9 *ranchising d!(!)o!d "uch !ar)i!r

in *!uda) ti"!s /h!n th! h!ad o* th! Ro"an Catho)ic Church ga(! his c)!rg5 th! right to

co))!ct church ta;!s )oca))5.

Franchising is a )o/-caita) raid gro/th "ar0!t shar! gaining otion. Th! goa) o* a

*ranchisor is to ro(id! a consist!nt roduct and consu"!r !;!ri!nc! indir!ct)5 through a

*ranchis!!.

This is achi!(!d through o!rationa) roc!ss!s that ar! trans*!rr!d to th! *ranchis!!

organiation9 and "anaging th!" *or !r*or"anc!.

An organiation that do!s *ranchising is r!8uir!d to d!(!)o s5st!"s9 structur!s9 and

roc!ss!s *or int!r-organiationa) co))a6oration *ocus!d uon accounta6i)it5 and contro) o*

!r*or"anc! o* an !;t!rna) 6usin!ss.

Franchis!!s9 (i!/ th!"s!)(!s as ind!!nd!nt 6usin!ss !o)!9 and s!! th!ir r!)ationshi /ith

th! *ranchisor as on! 6!t/!!n 6usin!ss artn!rs.

5 th! (!r5 natur! o* th! *ranchising roc!ss9 it is a 6usin!ss "!thod "or! suit!d to g!n!ric

s!r(ic!s that !(o)(! around a r!cogni!d 6rand9 a 6asic standardi!d roc!ss caa6)! o*

d!)i(!ring a consist!nt roduct or s!r(ic! through a /id! n!t/or0 o* o!rationa) units.

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Th! i"ortanc! o* *ranchising as a ot!ntia) 6usin!ss otion can 6! ass!ss!d 6as!d uon

r!s!arch in 1$$7 that !sti"at!d that n!ar)5 %& o* a)) r!tai) sa)!s r!ach!d consu"!rs through

th! *ranchis! rout!. Th! hosita)it5 industr5 has traditiona))5 us!d th! *ranchis! rout! *or

int!rnationa) gro/th. Th! i"ortanc! o* th! *ranchising roc!ss is r!*)!ct!d in th! r!tai) and

hosita)it5 industri!s /h!r! n!ar)5 !(!r5 r!tai)!r in "a))sJ and !(!r5 "a=or hot!) ar!

*ranchis!!s o* int!rnationa) as /!)) as "a=or nationa) chains. Int!rnationa))59 Franchising is

(!r5 /!)) acc!t!d and is !ntr!nch!d d!!)5 /ithin :SA # +!st!rn Euro!.

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EV!:UTI! !F FRAC#ISI$ I I"IA

In India9 acc!ta6i)it5 is gro/ing 65 th! da5 and it has a *air)5 con(!ntiona) industr5 sr!ad.

Aro;i"at!)5 ,&& *ranchisors sr!ad across industri!s )i0! !ducation9 r!tai)ing9 ro*!ssiona)

s!r(ic!s9 h!a)thcar! !tc. Th!r! ar! c)os! to o(!r %&9&&& *ranchis!!s9 /ith an annua) turno(!r

an5/h!r! 6!t/!!n Rs.&&&-Rs.1&9 &&& cror!s *ro" *ranchising. It is !sti"at!d that th! tota)

in(!st"!nts "ad! 65 Franchis!!s is o(!r Rs.'&&& cror!s and o(!r 3&&9&&& !o)! ar!

dir!ct)5 !")o5!d 65 *ranchis!d 6usin!ss!s.

Oortuniti!s in Franchising in India !;ist in th! *o))o/ing ar!as )i0! !aut5 Sa)ons #

Su)i!s9 usin!ss S!r(ic!s9 C)othing9 Co"ut!r # Int!rn!t9 Consu)tanc59 Consu"!r

S!r(ic!s9 Education # Training9 Ent!rtain"!nt9 Financia) S!r(ic!s9 F)orists9 Food and

!(!rag!s9 4!a)th Car! # Fitn!ss9 I""igration S!r(ic!s9 Int!riors9 !/!))!r59 P)a5 Schoo) #

Acti(it5 C!ntr!9 R!tai) and Tra(!).

R!tai) *ranchising /ithin India9 gr!/ initia))5 in th! aar!) # *oot/!ar s!ctors and has

gradua))5 gro/n to co(!r a /id! (ari!t5 o* s!ctors inc)uding *ood9 consu"!r dura6)!s9

=!/!)r59 6oo0s9 ho"! dUcor !tc. in this t5! o* 6usin!ss "od!)9 th!r! ar! t/o (ari!ti!s o*

R!tai)!rs.

Th! *irst on!s ar! th! "anu*actur!r-r!tai)!rs - t5ica))5 Product istri6ution Franchis!s and

oth!r on!s ar! th! aggr!gators t5ica))5 usin!ss For"at Franchis!s. Su6stantia) action is

a)so ha!ning in non "!tro )ocations9 th!r!65 sr!ading organi!d r!tai)ing o(!r a )arg!r

*ootrint.

Franchising a**ords India an oortunit5 to 6ui)d its co""!rcia) in*rastructur! and d!(!)o

its do"!stica))5 ori!nt!d 6usin!ss!s in an !**ici!nt9 ro*ita6)! and an-nationa) "ann!r. It

a)so o**!rs India th! oortunit5 to i"ort and d!(!)o *or!ign conc!ts in a /a59 /hich

!nsur!s that th! !8uit5 o* th! 6usin!ss r!"ains in India9 so a(oiding th! o)itica))5

und!sira6)! situation /h!r!65 succ!ss*u) do"!stic 6usin!ss!s ar! o/n!d 65 *or!ign

cororations.

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The ke, a%%rac%ions o2 2ranchising in India are as 2o''o5s/

1. o/!r Caita) R!8uir!"!nts Franchising is an !;c!))!nt /a5 *or 6oth Indian and

*or!ign cororations to !;and th!ir 6usin!ss!s and "a0! th!ir 6rand na"!s 0no/n

in India /ithout ha(ing to ris0 )arg! su"s o* "on!5 65 /a5 o* dir!ct in(!st"!nt.

Th! *ranchis!!s *inanc! th! !;ansion o* th! 6usin!ss in India. In r!turn th!5 ha(!

th! oortunit5 to "a0! su6stantia) inco"! and caita) ro*its.

2. G!ograhica) !;t!nt o* th! countr5 Franchising can !na6)! a co"an5 to ta0!

ad(antag! o* th! (ast Indian "ar0!t o* o(!r 1&&& "i))ion !o)! and gro/ing at a

rat! o* 1.$ .a. Th!r! is an !(!r-gro/ing d!"and o* goods and s!r(ic!s such as

*ast *ood and 6!(!rag!s9 c)othing9 !)!ctronic goods9 co"ut!r hard/ar! and so*t/ar!

and ro*!ssiona) s!r(ic!s. Th! in*rastructur! is oor9 ho/!(!r9 and o!rating a

cororat!)5 o/n!d distri6ution s5st!" that *u))5 !;)oits th! g!ograhica) !;ans!

o* th! countr5 is !;tr!"!)5 di**icu)t and in!**ici!nt. E"o/!ring articiants in th!

distri6ution s5st!" 65 granting th!" an !8uit5 int!r!st in it i.!. 65 granting a

*ranchis!J can su6stantia))5 i"ro(! th! !**ici!nc5 in th! distri6ution s5st!".

3. Cu)tura) E"ath5 Franchising /!)) suits th! !ntr!r!n!uria) sid! o* Indian cu)tur!.

Indian 6usin!ss !o)! ar! *i!rc!)5 rori!tar5 and *!!) a n!!d to ha(! o/n!rshi

and contro) o(!r th!ir 6usin!ss o!rations /hich th!5 can ass on to *utur!

g!n!rations. 4o/!(!r9 at th! sa"! ti"! th!5 ar! 0!!n to 6!n!*it *ro" th! good/i))

and t!chno)og5 that can 6! ro(id!d 65 th! *or!ign *ranchisor. Franchising a))o/s

th!" to r!conci)! th!s! con*)icting a"6itions.

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%. 4arn!ssing )oca) "ar0!t 0no/)!dg! Indian "ast!r *ranchis!!s o**!r th! *or!ign

*ranchisors dir!ct acc!ss to su6stantia) "ar0!t 0no/)!dg! and a consid!r!d and

sohisticat!d aroach to its !;)oitation. A co"an5 n!!ds a gr!at d!a) o*

0no/)!dg! o* th! di**!r!nt r!giona) "ar0!ts in India. +hat ho)ds good *or Pun=a6

"a5 not 6! r!)!(ant *or !ra)a. Franchising ro(id!s a sur! and !as5 /a5 o*

acc!ssing th! right )!(!) o* r!)!(ant )oca) "ar0!t 0no/)!dg!.

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T#E 7 R;s !F FRAC#ISI$

A"!rican cororat! histor5 is r!)!t! /ith instanc!s o* *ranchisings outstanding succ!ss

and a)so "an5 *ai)ur!s. !arning *ro" th!"9 *ranchising can succ!!d i* th! *ranchis!!

has a right co"6ination o* th! *our Rs r!scri6!d. Th!s! ar!>

1. R!a)is" Th! *ranchis!! shou)d 6! (!r5 r!a)istic in ass!ss"!nt o* his 6usin!ss

str!ngths and /!a0n!ss!s. C!rtain 0!5 ar!as /h!r! r!a)is" is a "ust /hi)! d!ciding

to go into *ranchising inc)ud!s 8u!stions )i0! ar! 5ou r!ar!d *or th! *inancia)

ins!curit59 ar! 5ou caa6)! o* d!(!)oing a *ra"! o* "ind /h!n 5ou can s"i)! and

6! cordia) !(!n /h!n th! custo"!r is tota))5 /rong. or! i"ortant is th! n!!d *or

r!a)is" in !(a)uating th! roducts and s!r(ic!s o**!r!d 65 th! *ranchisor.

2. R!sourc!s – an5 *ranchis!!s9 during th! !ar)5 !riods o* th!ir 6usin!ss /h!n

r!sourc!s constraints ar! co""on9 t!nd to so"!ti"!s o(!r)oo0 s!nding in th!

ro5a)t5 ch!8u!s to th! *ranchisor. Franchisors 0!! *!!)ing and right)5 so that th!ir

ro5a)t5 is as "uch a 0!5 6usin!ss !;!nditur! o* th! *ranchis!! as a5"!nt *or

urchas!s or a5ro)) is and an5 d!)a5 in hand)ing this ar!a /ou)d )!ad to un*ortunat!

cons!8u!nc!s o* a )ong t!r" natur!. Th!r!*or!9 /hi)! )anning r!sourc!s on a

!riodic 6asis9 consid!r th! a5"!nts that ar! to 6! "ad! to *ranchisor. Anoth!r ar!a

/h!r! "ost *ranchis!!s ha(! ro6)!"s is to "anag! th!ir r!sourc!s /hi)! )i(ing

/ithin th! *ranchising s5st!". Th! *ranchising agr!!"!nt9 in "ost cas!s9 c)!ar)5indicat!s s5st!"s9 roc!dur!s and "!thods o* "anaging th! r!sourc!s. Th!

*ranchis!! /i)) do /!)) to !ith!r 6! "!nta))5 r!ar!d to acc!t th! r!sourc!

"anag!"!nt t!r"s o* th! *ranchisor or "a0! it c)!ar at th! 6!ginning that h! n!!ds

th! r!8uisit! )!!/a5 to "anag! his o/n r!sourc!s.

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3. R!s!arch R!s!arch on th! *ranchisor is a "ust *or th! succ!ss. Barious u6)ish!d

sourc!s a)so ro(id! *air)5 d!tai)!d in*or"ation on "ost o* th! *ranchis!s that ar! on

o**!r 6ut to /hat !;t!nt that /i)) su**ic! *or th! Indian conditions n!!ds s!rious

!;a"ination. +hat!(!r 6! th! "!thodo)og59 th! ros!cti(! *ranchis!! /i)) do /!))

to 6ui)d co"r!h!nsi(! in*or"ation on th! *ranchisor9 th! roducts or s!r(ic! o*

o**!r9 co"!ting and su6stitut! roducts and s!r(ic!s 6!*or! h! "a0!s an5 "o(!

co""itting his *inancia) r!sourc!s on a )ong t!r" 6asis.

%. R!so)(! R!so)(! to 6! art o* th! *ranchising s5st!". Th! ro6)!" starts /h!n a

!rson g!ts into *ranchising on)5 6!caus! h! has an !ntr!r!n!uria) instinct 6ut th!

instant h! 6!co"!s a *ranchis!!9 th! tru! !ntr!r!n!ur in hi" starts r!s!nting th!

shac0)!s that ar! i"os!d 65 th! *ranchising s5st!". Th! otions ar! c)!ar !ith!r

sta5 /ithin th! s5st!" and *u))5 )!arn th! nuanc!s o* th! 6usin!ss and ros!r or tr5

on!s *)!dging !ntr!r!n!uria) ta)!nt and g!t into trou6)!.

Franchising Fra+e5ork

Th! thr!! !)!"!nts o* th! roduct9 6randing and th! s5st!" int!grat! tog!th!r to *or" th!

*ranchising n!t/or0.

Th! *ranchisor in(!sts in th! R#9 "ar0!ting V6rand 6ui)dingW and is r!sonsi6)! *or 8ua)it5

o!rations contro) and !;ansion. Th! *ranchis!! s!))s and d!)i(!rs th! roduct to th!

custo"!r and ro(id!s a*t!r sa)!s s!r(ic!.

Th! *ranchis!! in(!sts in th! out)!t inc)uding "ano/!r and !8ui"!nt.

Th! diagra" is gi(!n as *o))o/s>

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Th! s5st!" !nsur!s that th!r! is a *)o/ o* ro5a)t5 and *!!d6ac0 to th! *ranchisor. It a)so

!nsur!s that th! *ranchis!! r!c!i(!s th! roduct9 0no/-ho/ and training. Th! s5st!"

incororat!s contro) "!chanis"s and *!!d6ac0 s5st!"s to a))o/ th! *ranchisor to "onitor th!

)att!r.

Th! *ranchisor has to d!*in! a)) th! ara"!t!rs "!ntion!d in th! *ra"!/or0 so that th! thr!!

!)!"!nts o* *ranchising ta0! sha!. 5 d!*ining th!s! ara"!t!rs9 th! *ranchisor is a6)! to

r!ar! an o**!r docu"!nt that can *or" th! 6asis o* th! und!rstanding 6!t/!!n th!

*ranchisor and th! *ranchis!!.

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T#E !FFER "!CUMETT#E !FFER "!CUMET

Th! *ranchis!! o**!r docu"!nt gi(!s co"r!h!nsi(! in*or"ation to th! ros!cti(!

*ranchis!!. On th! 6asis o* th! *ranchising *ra"!/or09 th! o**!r docu"!nt is *i))!d. Th!cont!nts o* th! docu"!nts ha(! to 6! organi!d und!r (arious h!ads as !;)ain!d 6!)o/.

3. "e%ai's o2 %he 2ranchisor

This inc)ud!s th! *ranchisors r!gist!r!d 0!5 addr!ss9 t5! o* co"an59 histor59 6usin!ss9

"ar0!ts !tc.

4. Ex-erience

This docu"!nts th! !;!ri!nc! th! co"an5 or th! !")o5!!s o* th! co"an5 ha(! in th!

conduct o* th! 6usin!ss. This art r!in*orc!s th! )!giti"ac5 o* th! *ranchisors c)ai" o*

ha(ing a *ranchisa6)! roduct.

6. Franchise 2ees

In 6usin!ss *or"at *ranchising9 th!r! is an initia) *!! /hich gi(!s rights to th! *ranchis!! *or a

gi(!n !riod o* ti"! to o!rat! in a c!rtain t!rritor5 using th! 0no/-ho/ *ro" th! *ranchisor.

This *ranchis!! *!! a)so co(!rs th! cost o* training o* th! *ranchis!! and his !rsonn!) at th!

ti"! /h!n th! unit starts th! 6usin!ss.

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7. Ro,a'%, and o%her -a,+en%s

Nor"a))59 it is th! !rc!ntag! o* th! gross r!(!nu! o* th! unit. a;i"u" 6usin!ss!s a)so *i;

a "ini"u" ro5a)t5 *!! !r annu". Th! !rc!ntag! o* th! ro5a)t5 (ari!s /ith th! industr5 and

t5! o* roduct and is d!!ndant uon th! nor"s r!(a)!nt in th! industr5 *or discounts to

d!a)!rs and distri6utors.

:nd!r this h!ad9 it is a)so n!c!ssar5 to r!cord an5 oth!r *!!s that th! *ranchisor /i)) charg! to

co(!r th! costs o* oth!r s!r(ic!s )i0! (isits 65 s!cia)ists9 additiona) training and an5

"at!ria)9 r!)ac!"!nt *!!s *or "anua)s9 ro"otiona) )it!ratur! and "!dia !;!ns!s. R!n!/a)

o* th! agr!!"!nt at th! !;ir5 o* th! *ranchis! t!r" is nor"a))5 don! 65 charging th!

*ranchis!! a no"ina) r!n!/a) *!!.

8. Franchisee;s ini%ia' ines%+en%

Initia) in(!st"!nt inc)ud!s a)) th! !;!ns!s incurr!d on r!a) !stat!9 int!riors9 "achin!r59

!8ui"!nt9 *urnitur! and *i;tur!s9 /or0ing caita)9 initia) training9 insuranc!9 ro"otiona)

in(!st"!nt9 o6taining )ic!ns!s *ro" r!gu)ator5 6odi!s !tc. Sinc! th! costs (ar5 *ro" )ocation

to )ocation9 a rang! indicating th! nor"a) costs "a56! gi(!n *or a)) th! it!"s.

9. So*rcing o2 ra5 +a%eria's< -ro+o%iona' +a%eria's and o%her serices

Nor"a))5 th! *ranchisor gi(!s c)!ar s!ci*ications o* a)) "at!ria)s r!8uir!d *or th! o!ration

o* th! unit and conduct o* th! 6usin!ss. I* th! *ranchisor /ants to ut an5 r!strictions on th!

rocur!"!nt o* th!s!9 thos! can 6! "!ntion!d h!r!.

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=. !b'iga%ions o2 %he 2ranchise

A c)!ar )ist o* o6)igations o* th! *ranchis!! n!!ds to 6! "ad!. This /ou)d inc)ud! ac8uisition

and o6taining )ic!ns!s9 r!cruit"!nt9 training9 custo"!r s!r(ic!9 insuranc!9 "aintainanc! o*

r!cords9 audit r!8uir!"!nts9 !;!ns! on ro"otion !tc a)) o* /hich n!!d to 6! co(!r!d in

d!tai).

>. Franchisor;s ob'iga%ions

Si"i)ar)5 th! *ranchisor has to gi(! c!rtain rights to th! *ranchis!! *or th! us! o* th! 6rand

na"! in a gi(!n t!rritor59 accord aro(a)s *or sit!s9 "ano/!r and int!riors9 ro(id!

s!ci*ications *or !8ui"!nt and signag!9 rocur! "at!ria) and cr!at! ad(!rtising

rogra""!s. !tai)s o* th! training ro(id!d (isits "ad! to th! *ranchis!!s unit !tc a)so

n!!d to 6! inc)ud!d und!r this h!ad.

?. Rene5a's< %er+ina%ion< %rans2er< dis-*%e reso'*%ion

Th!s! n!!d to 6! !;)ain!d a)ong /ith th! situations and conditions und!r /hich th!5 /i))

6!co"! a)ica6)!.

This o**!r docu"!nt shou)d 6! ro!r)5 cr!at!d /ith ut"ost car! as this is th! "ain

docu"!nt /hich th! *ranchis!! /i)) us! as a 6asis *or d!ciding /h!th!r h! /ants to ta0! u

th! *ranchis! or not and /hich th! *ranchisor /i)) us! as th! 6asis o* th! *or"a) *ranchis!

agr!!"!nt.

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M!"ES !F FRAC#ISI$

Th!r! ar! *o))o/ing "!thods o* int!rnationa) *ranchising "!diu"s stat!d 6!)o/-

1. ir!ct Franchising :nd!r this s5st!"9 th! *ranchisor grants *ranchis!s to

indi(idua) *ranchis!!s in th! *or!ign countr5 through th! !;!cution o* an

int!rnationa) contract. Th! "ain ro6)!"s associat!d /ith this t5! o* *ranchising is

th! di**icu)t5 o* *ranchisors to contro) th! !r*or"anc! o* th! *ranchis!!s as th!s! ar!

)ocat!d in anoth!r countr59 th! assistanc! to 6! ro(id!d to th! *ranchis!! during th!

o!ration o* th! contract. Th! 8u!stion o* int!))!ctua) and industria) ro!rt5 rights

in th! *or!ign countr5 a)so n!!ds to 6! consid!r!d. Ta;ation is anoth!r issu! /hich

r!c!i(!s du! consid!ration. Furth!r"or!9 ho/ th! *ranchis! arrang!"!nt is

structur!d that dir!ct *ranchising is not us!d !;t!nsi(!)5 int!rnationa))5.

2. Su6sidiar5 or ranch O**ic! Franchising through a su6sidiar5 or a 6ranch o**ic!

ar! t/o "!thods /hich ar! o*t!n tr!at!d tog!th!r9 a)though th!r! ar! di**!r!nc!s

/hich d!ri(! *ro" th! *act that a su6sidiar59 a)6!it contro))!d 65 th! *ranchisor9 is a

s!arat! )!ga) !ntit5 /h!r!as a 6ranch o**ic! is not. +hat!(!r 6! th! di**!r!nc!9 an

ad(antag! o* this aroach is that th! *ranchisor is r!s!nt in th! *or!ign countr5 as a

cororat! 6od5. Th! contract /i)) in this cas! 6! a do"!stic contract and thus su6=!ct

to )oca) )!gis)ation.

Th! ro6)!"s associat!d /ith this t5! ar! si"i)ar to dir!ct *ranchising. In addition9th! *ranchisor /i)) 6! r!8uir!d to s!nd his !rsonn!) to th! *or!ign countr5 *or th!

start u o!rations thus in(o)(ing /or0 !r"it and r!sid!nc! *or"a)iti!s.

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3. Ar!a !(!)o"!nt Agr!!"!nts Such agr!!"!nts traditiona))5 in(o)(!d an

arrang!"!nt /h!r!65 th! d!(!)o!r is gi(!n th! right to o!n a "u)ti)! nu"6!r o* out)!ts

to a r!d!t!r"in!d sch!du)! and /ithin a gi(!n ar!a. Th!s! arrang!"!nts in th! ast ha(!

6!!n us!d "ost)5 in do"!stic *ranchising9 6ut ar! no/ 6!ing us!d incr!asing)5 in

int!rnationa) *ranchising.

It!"s that ar! to 6! consid!r!d h!r! inc)ud! th! nu"6!r and d!nsit5 o* th! out)!ts to 6!

o!n!d9 d!tai)!d d!(!)o"!nt sch!du)! and th! cons!8u!nc! o* non-co")5ing o* th!

sch!du)!. In such arrang!"!nts9 th! d!(!)o!r /i)) n!!d to ha(! su6stantia) *inancia)

r!sourc!s so as to 6! a6)! to o!n th! r!8uir!d nu"6!r o* out)!ts.

%. ast!r Franchis! Agr!!"!nts In th! int!rnationa) sc!nario9 this is /id!)5 us!d. In

r!s!ct to such agr!!"!nts9 th! *ranchisor grants a !rson in anoth!r countr59 th! su6-

*ranchisor9 th! !;c)usi(! right /ithin a c!rtain t!rritor5 to o!n *ranchis! out)!ts its!)*

and@or to grant *ranchis!s to su6-*ranchis!!s.

In this cas!9 th!r! ar! t/o agr!!"!nts in(o)(!d> an int!rnationa) agr!!"!nt 6!t/!!n th!

*ranchisor and th! su6-*ranchisor th! "ast!r *ranchis! agr!!"!ntJ and a nationa) *ranchis!

agr!!"!nt 6!t/!!n th! su6-*ranchisor and !ach o* th! su6-*ranchis!!s th! su6-*ranchis!

agr!!"!ntJ. Th! *ranchisor trans"its a)) its rights and duti!s to th! su6-*ranchisor9 /ho /i))

6! in charg! o* th! !n*orc!"!nt o* th! su6-*ranchis! agr!!"!nt and o* th! g!n!ra)

d!(!)o"!nt and /or0ing o* th! n!t/or0 in that countr5. A)) th! *ranchisor /i)) 6! a6)! to

do is to su! th! su6-*ranchisor in cas! o* 6r!ach o* o6)igation to !n*orc! th! su6-*ranchis!

agr!!"!nt as )aid do/n in th! "ast!r *ranchis! agr!!"!nt.

Th! ad(antag!s o* this s5st!" ar! that th! su6-*ranchisor is *a"i)iar /ith th! )oca) ha6its9

tast!s9 cu)tur! and )a/s o* its countr5 and that it /i)) 0no/ /a5s a6out th! )oca)

6ur!aucrac5 *or n!c!ssar5 !r"its as and /h!n n!c!ssar5. Th! disad(antag!s inc)ud! that

th! *inancia) r!turns o* th! *ranchisor /i)) 6! r!duc!d 65 th! a"ount du! to th! su6-

*ranchisor and a)so that th! *ranchisor /i)) ha(! to r!)5 on th! su6-*ranchisor *or th!

!r*or"anc! o* th! *ranchis! s5st!".

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'. oint B!ntur!s In th! cas! o* =oint (!ntur!s9 th! *ranchisor and a )oca) artn!r cr!at! a

=oint (!ntur!. This (!ntur! th!n !nt!rs into a "ast!r *ranchis! agr!!"!nt /ith th!

*ranchisor9 and roc!!ds to o!n *ranchis! out)!ts and to grant su6-*ranchis!s =ust as a

nor"a) su6-*ranchisor /ou)d do.

An arrang!"!nt such as this /i)) ha(! to consid!r )!gis)ation on =oint (!ntur!s in addition to

a)) th! oth!r )!ga)iti!s that ar! in(o)(!d. Pro6)!"s "a5 a)so aris! /ith th! *act that th! dou6)!

)in0 "a5 cr!at! con*)icts o* int!r!st *or th! *ranchisor. Th! ad(antag!s accruing *ro" this

arrang!"!nt "a5 inc)ud! that it cou)d 6! a /a5 to so)(! th! ro6)!" o* *inancing *ranchis!

o!rations in countri!s /h!r! *inancia) "!ans ar! scarc!.

,. isc!))an!ous *or"s Th!r! is no )i"it to th! r!*in!"!nt that can 6! "ad! to th! a6o(!

*or"s o* *ranchising to acco""odat! th! di**!ring d!"ands o* ot!ntia) *ranchisor and @ or

*ranchis!!. N!/ *or"s o* *ranchising9 or co"6inations o* di**!r!nt *or"s o* *ranchising9

a!ar at r!gu)ar int!r(a)s. E;a")!s o* th!s! ar! stat!d as *o))o/s>

-u)ti-unit Franchising

-A**i)iation or con(!rsion Franchising

-Franchis! /ithin a Franchis!

-Su6ordinat!d E8uit5 Arrang!"!nts

-anag!"!nt Agr!!"!nt

-Franchis! u5-ins

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A"VATA$ES 1 "ISA"VATA$ES !F FRAC#ISI$

6

Th! "an5 ad(antag!s and disad(antag!s o* o/ning a *ranchis! shou)d 6! car!*u))5 !(a)uat!d

6!*or! d!ciding to urchas! on!.

A"VATA$ES/

1. LO/ning a *ranchis! a))o/s 5ou to go into 6usin!ss *or 5ours!)*9 6ut not 65 5ours!)*.M

2. A *ranchis! ro(id!s *ranchis!!s /ith a c!rtain )!(!) o* ind!!nd!nc! /h!r! th!5 cano!rat! th!ir 6usin!ss.

3. A *ranchis! ro(id!s an !sta6)ish!d roduct or s!r(ic! /hich a)r!ad5 !n=o5s /id!sr!ad

6rand na"! r!cognition. This gi(!s th! *ranchis!! th! 6!n!*its o* custo"!r a/ar!n!ss /hich

/ou)d ordinari)5 ta0! 5!ars to !sta6)ish.

%. A *ranchis! incr!as!s 5our chanc!s o* 6usin!ss succ!ss 6!caus! 5ou ar! associating /ith

ro(!n roducts and "!thods.

'. Franchis!s "a5 o**!r consu"!rs th! attraction o* a c!rtain )!(!) o* 8ua)it5 and consist!nc5

6!caus! it is "andat!d 65 th! *ranchis! agr!!"!nt.

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,. Franchis!s o**!r i"ortant r!-o!ning suort>

? Sit! s!)!ction

? !sign and construction

? Financing in so"! cas!sJ

? Training

? Grand-o!ning rogra"

7. Franchis!s o**!r ongoing suort

? Training

? Nationa) and r!giona) ad(!rtising

? O!rating roc!dur!s and o!rationa) assistanc!

? Ongoing su!r(ision and "anag!"!nt suort

? Incr!as!d s!nding o/!r and acc!ss to 6u)0 urchasing in so"! cas!sJ

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"isadan%ages/

1. Th! *ranchis!! is not co")!t!)5 ind!!nd!nt. Franchis!!s ar! r!8uir!d to o!rat! th!ir

6usin!ss!s according to th! roc!dur!s and r!strictions s!t *orth 65 th! *ranchisor in th!*ranchis! agr!!"!nt. Th!s! r!strictions usua))5 inc)ud! th! roducts or s!r(ic!s /hich can 6!

o**!r!d9 ricing and g!ograhic t!rritor5. For so"! !o)!9 this is th! "ost s!rious

disad(antag! to 6!co"ing a *ranchis!!.

2. In addition to th! initia) *ranchis! *!!9 *ranchis!!s "ust a5 ongoing ro5a)ti!s and

ad(!rtising *!!s.

3. Franchis!!s "ust 6! car!*u) to 6a)anc! r!strictions and suort ro(id!d 65 th! *ranchisor

/ith th!ir o/n a6i)it5 to "anag! th!ir 6usin!ss.

%. A da"ag!d9 s5st!"-/id! i"ag! can r!su)t i* oth!r *ranchis!!s ar! !r*or"ing oor)5 or th!

*ranchisor runs into an un*or!s!!n ro6)!".

'. Th! t!r" durationJ o* a *ranchis! agr!!"!nt is usua))5 )i"it!d and th! *ranchis!! "a5

ha(! )itt)! or no sa5 a6out th! t!r"s o* a t!r"ination.

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ISSUES I FRAC#ISI$ I T#E I"IA MAR@ET

Int!rnationa) *ranchising is h!r! to sta59 a )arg!r nu"6!r o* "u)tinationa) cororations ar!

s!!0ing !ntr5 into !"!rging and d!(!)oing "ar0!ts o* th! /or)d inc)uding China9 India9

atin A"!rica and oth!r Asian countri!s. 4o/!(!r9 th!5 ha(!nt 6!!n succ!ss*u) as th!5 did

not ta0! an5 ad!8uat! r!cautions 6!*or! !nt!ring into th! "ar0!ts. I* an organiation /ants

to !n!trat! into India using th! *ranchising "!thod9 h! shou)d 0!! in "ind th! *o))o/ing

as!cts>

3. Co-,righ% 0ro%ec%ion

In "ost o* th! !"!rging "ar0!ts9 th! int!))!ctua) and co5right rot!ction )a/s ar!

inad!8uat!. 4o/!(!r countri!s )i0! India and China9 /hich ar! s!rious a6out attracting

*or!ign in(!st"!nts ha(! a"!nd!d "an5 o* th!ir !;isting )a/s and ro(id! r!asona6)!

rot!ction. Th! cororation has to und!rstand th!s! )a/s and "a0! th! statutor5 a)ications

und!r trad!"ar09 co5right and at!nt )a/s o* th! countr5 to rot!ct its rights. !ga) h!)

*ro" )oca) couns!) has to 6! ta0!n in th!s! "att!rs.

2. Ro,a'%,

an5 countri!s ha(! strict *or!ign !;chang! )a/s that r!strict th! a5"!nts o* ro5a)ti!s to

ar!nt organiations. This t5! o* )a/ !;ist!d in India too 6ut ro5a)ti!s ar! not a))o/!d no/.

an5 countri!s ha(! an u!r ca on th! !rc!ntag! o* ro5a)t5 that can 6! charg!d *ro" th!

*ranchis!!s.

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3. :ega' Reco*rse

It is n!c!ssar5 *or cororations to ch!c0 th! !**!cti(!n!ss o* th! )!ga) s5st!" r!(ai)ing in th!

countr5. an5 countri!s /hich do not ha(! a /!)) d!(!)o!d )!ga) s5st!" "a5 not 6!

suita6)! *or an int!rnationa) organiation to (!ntur! in. India has an !)a6orat! )!ga) s5st!"9

6ut th!r! ar! d!)a5s in s5st!" /hich th! *ranchisor shou)d 6! a/ar! o* so that incas! o* )!ga)

disut!s9 th! i")ications and "!thod o* action ar! c)!ar)5 und!rstood and i")!"!nt!d.

%. C*'%*ra' iss*es

India is a s!nsiti(! "ar0!t !s!cia))5 i* its r!)at!d to cu)tur! and r!)igion. Th! *ranchisor has

to !nsur! that no action ta0!n 65 th! *ranchis!! /ith r!s!ct to th! ad(!rtising9 ro"otion !tc

shou)d hurt th!s! s!nti"!nts. Th! *ranchisor a)so has to ta0! car! /hi)! d!signing th!

roduct.

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FRAC#ISE :AWS I I"IA

A h!a)th5 )!ga) !n(iron"!nt is o* gr!at i"ortanc! *or *ranchising and shou)d inc)ud!

ro(isions !rtaining to a)) ar!as that *a)) /ithin th! a"6it o* *ranchising. This inc)ud!s9 int!r

a)ia9 co""!rcia) )a/ r!)ating to contracts and =oint (!ntur!s and int!))!ctua) ro!rt5 )a/ *or

rot!ction o* trad! "ar0s and 0no/-ho/. Franchis! arrang!"!nts ar! su6=!ct to an arra5 o*

)a/s and r!gu)ations in addition to thos! r!gu)ating co""!rcia) contracts and int!))!ctua)

ro!rt5 rights. Th!r! ar! no s!ci*ic )a/s go(!rning *ranchising in India. As a r!su)t a

*ranchis! agr!!"!nt "a5 6! go(!rn!d 65 di**!r!nt )a/s.

Pri"ari)5 a *ranchis! agr!!"!nt is a contract 6!t/!!n th! *ranchisor and th! *ranchis!!. Th!

*irst )a/ /hich co"!s into th! ictur! is th! Contract Act 172 /hich go(!rns contracts in

India. A *ranchis! agr!!"!nt /i)) 6! go(!rn!d 65 th! Indian Contract Act9 172 and th!

S!ci*ic R!)i!* Act9 1$,3 /hich ro(id!s *or 6oth s!ci*ic !n*orc!"!nt o* co(!nants in a

contract and r!"!di!s in th! *or" o* da"ag!s *or 6r!ach o* contract. I* a art5 to th!

*ranchis! agr!!"!nt co""its a 6r!ach o* contract9 th! aggri!(!d art5 has th! otion to

initiat! a suit *or s!ci*ic !r*or"anc! in Indian courts and a)5 *or r!)i!* in th! *or" o* a

t!"orar5 or !r"an!nt in=unction9 /hich "a5 6! grant!d at th! discr!tion o* th! court

consid!ring th! 6a)anc! o* con(!ni!nc! and th! int!r!sts o* =ustic!. An ord!r granting or

r!=!cting an in=unction "a5 6! a!a)!d 65 an aggri!(!d art5.

a/s r!)ating to ta;ation9 ro!rt5 )a/s9 insuranc! )a/ and )a6our )a/s a)so a)5 to

*ranchis! transactions. Additiona))59 )a/s and r!gu)ations a)5ing to s!ci*ic s!ctors o*

goods and s!r(ic!s /i)) a)so a)5 d!!nding on th! *ranchis!d )a/s.

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Th! *o))o/ing ar! th! r!asons /h5 a co"r!h!nsi(! *ranchis! )a/ is r!8uir!d in India>

1. A--'ica%ion o2 M*'%i-'e :egis'a%ion

A /!))-d!*in!d )!ga) structur! is indis!nsa6)! *or th! !**!cti(! *unctioning o* an5 6usin!ss o!ration. Th! int!rnationa) 6usin!ss !n(iron"!nt d!"ands a /!))-d!*in!d

suita6)! )!gis)ation that is co")!t! in a)) r!s!cts. Th! )ac0 o* a co"r!h!nsi(!

)!gis)ation on *ranchising in India )!ads to th! a)ica6i)it5 o* "u)ti)! )a/s to a

*ranchis! transaction.

This -oses %he 2o''o5ing -rob'e+s/

a. Complexities> Parti!s to a contract nor"a))5 r!*!r agr!!"!nts /ith a si")!

aroach and !nco"assing a)) th! r!8uir!d )a/ roc!dur!s and ru)!s r!8uir!d to 6!

co")i!d /ith. 4o/!(!r th! a)ication o* di**!r!nt )a/s to on! agr!!"!nt "a0!s it

co")!; to d!cid! (arious issu!s arising *ro" th! agr!!"!nt.

6. Ambiguities> u! to th! n!c!ssar5 a)ication o* "u)ti)! )!gis)ation9 a"6iguiti!s

ar! cr!at!d as to c!rtain issu!s. For !;a")!9 a *ranchisor /ou)d i"agin! that a c!rtain

issu! is th! *ranchis!!s r!sonsi6i)it5 und!r on! )a/9 /h!r!as th! *ranchis!! /ou)d

thin0 th! oosit! 6as!d on a di**!r!nt )a/.

c. Time-Consuming > R!*!rring to "u)ti)! )a/s consu"!s a )ot o* ti"! at th! initia)

stag!s o* a transaction as /!)) as oth!r oints o* ti"! /h!n th! agr!!"!nt is sought to

6! !n*orc!d. This ro(!s to 6! d!tri"!nta) to th! s"ooth *unctioning o* *ranchising

o!rations in India and a)so "a0!s ti"!-6ound o!rations in(o)(ing n!/ !nt!rris!s

di**icu)t.

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2. Absence o2 "isc'os*re Re*ire+en%s

Countri!s /ith s!ci*ic *ranchising )!gis)ation "a0! it i"!rati(! *or arti!s to a *ranchis!

agr!!"!nt to disc)os! c!rtain *actua) in*or"ation !rtaining to th! 6usin!ss o* th! arti!s.

This !nsur!s transar!nc5 and *aci)itat!s an in*or"!d d!cision. A *ranchisor shou)d 6!

r!8uir!d9 65 )a/9 to "a0! c!rtain disc)osur! to th! ros!cti(! *ranchis!! /h!r!in h! is

suos!d to r!(!a) d!tai)!d in*or"ation r!garding hi"s!)*9 his )itigation and 6an0rutc5

histor59 his *inancia) osition9 th! *aci)iti!s h! o**!rs !tc. In India9 in th! a6s!nc! o* !**!cti(!

disc)osur! nor"s9 a ros!cti(! *ranchis!! is r!nd!r!d h!))!ss as th! *ranchisor is und!r no

statutor5 o6)igations to "a0! disc)osur!s.

In th! a6s!nc! o* a s!ci*ic statut! go(!rning th! *ranchis! agr!!"!nt9 th! *ranchisor r!*rains

*ro" ro(iding an5 in*or"ation that is )i0!)5 to r!=udic! or "a0! a *ranchis!! r!consid!r th!

6usin!ss roosition o* th! *ranchisor. Th! )ac0 o* ro!r disc)osur! r!8uir!"!nts ro(id!s a

go)d!n oortunit5 to a *ranchisor to a6us! his osition o* i"ortanc! as h! is (irtua))5 und!r

no statutor5 o6)igation to "a0! th! r!8uisit! disc)osur!.

3. A--'icabi'i%, o2 :a5s o2 o%her Co*n%ries

Nor"a))59 th! a6s!nc! o* *ranchis! )a/s !na6)!s *or!ign *ranchisors to "a0! th! )a/s o* th!ir

o/n countr5 a)ica6)! to th! agr!!"!nts !nt!r!d into /ith th! *ranchis!!s in India. Th!

sa"! is th! cas! /ith *ranchisors /ho !nt!r into *ranchising agr!!"!nts /ith *ranchis!!s

*ro" oth!r countri!s. This ro(!s to 6! an additiona) 6urd!n on th! arti!s9 articu)ar)5 th!

*ranchis!!.

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%. :ack o2 0ro-er For+a% 2or Franchising Agree+en%s

u! to )ac0 o* a s!ci*ic *or"at9 *ranchisors *ro" oth!r countri!s dra*t agr!!"!nts /hich ar!

in th! sa"! *or"at as is aro(!d or *o))o/!d in th!ir countri!s. Such agr!!"!nts ar! "ad!

to suit th! s!ci*ic !n(iron"!nt o* th!ir r!s!cti(! countri!s and h!nc! ar! not suita6)! *or

Indian !n(iron"!nt.

'. :iabi'i%, o2 0ar%ies Uncer%ain

u! to th! )ac0 o* s!ci*ic )!gis)ation9 th! )ia6i)it5 o* !ith!r art5 is !ith!r d!t!r"in!d 65 th!

agr!!"!nts !nt!r!d into 6!t/!!n th!" or on th! 6asis o* g!n!ra) r!(ai)ing )a/. Th! )ia6i)it5c)aus! is di**!r!nt in di**!r!nt countri!s9 and this )!ads to a gr!at discr!anc5 a"ong th!

courts /hich tr5 such disut!s on )ia6i)iti!s.

No/ /ith a)) th! d!tai)s o* Franchising gi(!n9 6!)o/ is a hug!9 "assi(! and succ!ss*u)

*ranchising co"an5 in th! /or)d 0no/n to 6! th! )arg!st ic! cr!a" *ranchisor in th! /or)d

/ith "or! than 27&& out)!ts in :SA and around 31&& out)!ts int!rnationa))59 as0in Ro66ins.as0in Ro66ins has its g)o6a) r!s!nc! *!)t a)) o(!r th! /or)d and th! t!r" ic!-cr!a" is

s5non5"ous to as0in Ro66ins.

Ta)0ing a6out its r!s!nc! in th! Indian "ar0!t9 as0in Ro66ins is on! o* th! *ast!st gro/ing

*ood 6rands in India. Curr!nt)5 th!r! ar! "or! than 2$& *ranchis!d out)!ts across th! nation.

or! than 1&& *ranchis!!s ar! "u)ti)! *ranchis!!s /ho o/n "or! than on! R stor!. This in

its!)* rati*i!s th! 0ind o* con*id!nc! R g!n!rat!s in th! *ranchising /or)d. as0in Ro66ins is

r!no/n!d *or its +or)d C)ass Ic! Cr!a"s9 Sunda!s9 !(!rag!s and Ic! Cr!a" Ca0!s.

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#IST!RY !F BAS@I 1 R!BBIS

Thr!!-8uart!rs o* a c!ntur5 ago9 t/o 6roth!rs-in-)a/ shar!d a dr!a" to cr!at! an inno(ati(!ic! cr!a" stor! that /ou)d 6! a n!igh6orhood gath!ring )ac! *or *a"i)i!s. urton VurtW

as0in and Ir(in! VIr(W Ro66in had a "utua) )o(! o* o)d-*ashion!d ic! cr!a" and th! d!sir!

to ro(id! custo"!rs a (ari!t5 o* *)a(ors "ad! /ith ingr!di!nts o* th! high!st 8ua)it5 in a

*un9 in(iting at"osh!r!.

As a t!!n9 Ir( /or0!d in his *ath!rs ic! cr!a" stor!. uring +or)d +ar II9 urt /as a

i!ut!nant in th! :.S. Na(5 and roduc!d ic! cr!a" *or his *!))o/ troos. +h!n th! /ar /as

o(!r9 th! t/o !ntr!r!n!urs /!r! !ag!r to caita)i! on A"!ricas )o(! o* ic! cr!a".

Th!5 start!d out in s!arat! (!ntur!s at th! ad(ic! o* Ir(s *ath!r. In 1$%'9 Ir( o!n!d

Sno/6ird Ic! Cr!a" in G)!nda)!9 Ca)i*ornia. 4is stor! *!atur!d 21 *)a(ors and !"hasi!d

high-8ua)it5 ic! cr!a" so)d in a *un9 !rsona)i!d at"osh!r!. A 5!ar )at!r9 urt o!n!d

urtons Ic! Cr!a" Sho in Pasad!na9 CA. 5 1$%9 th!5 had si; stor!s 6!t/!!n th!". This

conc!t !(!ntua))5 gr!/ into as0in-Ro66ins.

As th! nu"6!r o* stor!s gr!/9 urt and Ir( r!cogni!d that to "aintain th! high standards

th!5 s!t in th! 6!ginning9 !ach stor! /ou)d r!8uir! a "anag!r /ho had an o/n!rshi int!r!st

in its o(!ra)) o!ration. E(!n though th!5 didnt r!a)i! it at th! ti"!9 th! t/o *ound!rs had

ion!!r!d th! conc!t o* *ranchising in th! ic! cr!a" industr5.

In 1$%$9 th!r! /!r! "or! than %& stor!s in South!rn Ca)i*ornia /h!n urt and Ir( urchas!d

th!ir *irst dair5 in ur6an0. This 6usin!ss d!cision a))o/!d th!" to ha(! co")!t! contro)

o(!r th! roduction o* th!ir ic! cr!a"9 and th! d!(!)o"!nt o* n!/ ingr!di!nts and *)a(ors.

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It /asnt unti) 1$'3 that th! ic! cr!a" chain dro!d th! s!arat! id!ntiti!s o* Sno/6ird and

urtons and 6!ca"! as0in-Ro66ins. A )oca) ad(!rtising ag!nc59 Carson@Ro6!rts9 ad(is!d a

uni*or" id!ntit5 and i"ag! und!r th! na"! as0in-Ro66ins 31 Ic! Cr!a". Th!ir

r!co""!ndations inc)ud!d th! 31 )ogo to r!r!s!nt a *)a(or *or !(!r5 da5 o* th! "onth9

Ch!rr5 in0J and Choco)at! 6ro/nJ o)0a dots to 6! r!"inisc!nt o* c)o/ns9 carni(a)s and

*un and )ast)59 th! us! o* cartoons to 6ring th!ir *)a(ors a)i(! /ith !rsona)it5 to grahica))5

high)ight th! na"! and d!)icious ingr!di!nts. +ith this o(!r-arching 6randing9 as0in-

Ro66ins iconic in0 soons /!r! cr!at!d /ith th! 6!)i!* that !o)! shou)d 6! a6)! to tr5 an5

o* th!ir "an5 *)a(ors /ithout cost.

In 1$'%9 as0in-Ro66ins ut th!ir roduct on th! )in! against th!ir co"!titors at th! os

Ang!)!s Count5 Fair. That 5!ar th!5 /on th!ir *irst Go)d !da) and s!t th! att!rn *or count5

and stat! *air articiation9 !arning Go)d !da)s *or as0in-Ro66ins Ic! Cr!a" !(!r5 5!ar

sinc! that *irst cont!st.

Not !(!r5on! )i0!s a)) our *)a(ors9 6ut !ach *)a(or is so"!on!s *a(orit!.

Ir( Ro66ins

as0in-Ro66ins continu!d to !;and9 and 65 th! "id-1$,&s9 th! co"an5 had 6!co"! an ic!

cr!a" !"ir! /ith "or! than %&& stor!s throughout th! :nit!d Stat!s. In th! 1$7&s th! chain

/!nt int!rnationa)9 o!ning stor!s in aan9 Saudi Ara6ia9 or!a and Austra)ia.

Th! *ranchis! "od!) cr!at!d 65 urt and Ir( d!cad!s ago is sti)) us!d 65 as0in-Ro66ins

toda5. +! ar! 1&& *ranchis!d9 /ith !ach o/n!r ho)ding a sta0! in th! 6usin!ss succ!ss9

/hi)! roduct d!(!)o"!nt and "!rchandising ar! hand)!d at as0in-Ro66ins h!ad8uart!rs.

This hands-on9 s"a)) 6usin!ss aroach a))o/s *ranchis!!s th! a6i)it5 to cr!at! a strong

r!s!nc! in )oca) co""uniti!s a)) o(!r th! /or)d. Through this *ranchis! 6usin!ss "od!)9 /!

continu! to ro(id! inno(ati(!9 high-8ua)it5 ic! cr!a" tr!ats to "or! than 1'& "i))ion

custo"!rs /or)d/id!. And as a r!su)t9 as0in-Ro66ins has gro/n to 6!co"! th! /or)ds

)arg!st chain o* ic! cr!a" s!cia)t5 stor!s9 /ith "or! than 29&& )ocations throughout th!

:nit!d Stat!s and '9&& around th! g)o6!.

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Sinc! 1$%'9 /!(! introduc!d "or! than 19&&& uni8u!9 *un and d!)icious ic! cr!a" *)a(ors.

Our origina) to-s!))ing *)a(ors )i0! int Choco)at! Chi and Pra)in!s n Cr!a" continu! to

d!)ight "i))ions /or)d/id!. Sti))9 /! continu! to consist!nt)5 introduc! n!/9 !;citing *)a(or

co"6inations9 as /!)) as ic! cr!a" industr5-)!ading inno(ations such as hand-ac0!d ic!

cr!a" 8uarts9 a uni8u! *)a(or ri66on t!chni8u!9 th! us! o* traditiona) d!ss!rt ingr!di!nts and

th! introduction o* "ouss!-t!;tur!d ic! cr!a"s. Fro" our introduction o* signatur! ic! cr!a"

ca0!s and th! gro/ing )in! o* 6!(!rag!s9 inc)uding our signatur! Cauccino )ast9 our

co""it"!nt to cr!ating n!/ and !;citing roducts is unsurass!d in th! industr5. Its a)) art

o* our "ission to "a0! th! as0in-Ro66ins n!igh6orhood a tast59 *un )ac! *or our

custo"!rs.

In th! "o"!nts o* gr!at!st rid!9 as0in-Ro66ins is co"os!d o* thos! /ho contri6ut! in a

s!cia) /a5 to our *!))o/ hu"ansh!)ing to nourish that 8ua)it5 o* chi)d)i0! !n=o5"!nt9

/hich is !rhas th! "ost r!cious and ho!*u) art o* our hu"anit5.

A"!ricas Fa(orit! N!igh6orhood Ic! Cr!a" Sho

Th!r! ar! "an5 *or"s o* !n=o5"!nt in )i*!> th!r!s sontan!ous )!asur!9 anticiat!d

)!asur!9 th!r! is )ong-t!r" hain!ss and th!r! ar! sur-o*-th!-"o"!nt =o5s. For !o)!

!(!r5/h!r!9 ic! cr!a" has ro6a6)5 g!n!rat!d !ach o* thos! t5!s o* )!asur!.

as0in-Ro66ins has )ong 6!!n d!dicat!d to "a0ing th! !;!ri!nc!s o* !ating ic! cr!a" an

!n=o5a6)! on!. LA"!ricas Fa(orit! N!igh6orhood Ic! Cr!a" Sho is a hi)osoh5 at

as0in-Ro66ins shar!d 65 !(!r5on!. Each !")o5!!9 stor! o/n!r and cororat! t!a"

"!"6!r is roud o* our h!ritag!9 and th!5 ar! d!dicat!d to uho)ding th! *)a(or9 th! *un9 and

th! )oca)9 n!igh6orhood *!!) that "a0! th! !;!ri!nc! uni8u! to as0in-Ro66ins. Th!r! is

nothing 8uit! as thri))ing as th! *ac! o* a chi)d !n=o5ing his *a(orit! ic! cr!a" *)a(or9 or th!

d!)ight o* a "oth!r surris!d /ith an ic! cr!a" ca0! on oth!rs a5 in a stor! 5ou ca)) L"5

as0in-Ro66insM.

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Fro" th! ag!s o* on! to nin!t5-nin!9 !o)! (isit as0in-Ro66ins anticiating th! )!asur! o*

!n=o5ing th!ir *a(orit! ic! cr!a"s s!r(!d an5 /a5 th!5 /ant. !caus! o* our d!dication to

6!ing LA"!ricas Fa(orit! N!igh6orhood Ic! Cr!a" ShoM9 as0in-Ro66ins stor!s ar!

(isit!d 65 o(!r 3&& "i))ion ha5 custo"!rs 5!ar a*t!r 5!ar. A nu"6!r that continu!s to gro/

as as0in-Ro66ins sr!ads throughout th! /or)d.

Th! origina) *)a(ors /h!n 6as0in-Ro66ins *irst o!n!d in 1$%' /!r!>

anana Nut Fudg!

)ac0 +a)nut

urgund5 Ch!rr5

utt!rscotch Ri66on

Ch!rr5 acaroon

Choco)at!

Choco)at! A)"ond

Choco)at! Chi

Choco)at! Fudg!

Choco)at! int

Choco)at! Ri66on

Co**!!

Co**!! Cand5

at! Nut

Egg Nog

Fr!nch Bani))a

Gr!!n int Stic0

!"on Cris

!"on Custard

!"on Sh!r6!t

a)! Nut

Orang! Sh!r6!t

P!ach

P!!r"int Fudg! Ri66on

P!!r"int Stic0

Pin!a)! Sh!r6!t

Ras6!rr5 Sh!r6!t

Roc05 Road

Stra/6!rr5

Bani))a

Bani))a urnt A)"ond

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MAR@ETI$ STRATE$IES !F BAS@I 1 R!BBIS

Th! )ast thr!! 5!ars as0in # Ro66ins ha(! r!a))5 s!!n our !cono"5 go into an o(!rdri(!.

+hat th!5 /!r! /itn!ssing no/ is on)5 a r!(i!/ o* )arg!r things to co"! in th! n!;t cou)!o* d!cad!s. +hi)! th!ir stunning strid!s in th! IT 6usin!ss ha(! 6!!n )arg!)5 r!sonsi6)! *or

dri(ing our gro/th9 th!5 cou)d s!! "or! and "or! industri!s and s!r(ic!s =oining th! cur(!.

T5ica))59 on! /i)) a)/a5s s!! 6!t/!!n on! and thr!! gro/th !ngin!s on an5 gro/th cur(!9

6ut /hat r!a))5 !;cit!s th!" is th!ir ot!ntia) *or so "an5 di**!r!nt gro/th )!ad!rs in this

has!.

On! 0!5 ro6)!" /ith th! gro/th o(!r th! ast '& 5!ars has 6!!n th! co")!t! )ac0 o* *ocus

on in*rastructur! d!(!)o"!nt9 so"!thing that has ro!))!d China to /h!r! it is toda5. ut

again this is so"!thing an5 Go(!rn"!nt or !o)! can on)5 ignor! *or so )ong at th!ir o/n

!ri). Th!5 6!)i!(! that in th! co"ing 5!ars9 in*rastructur! d!(!)o"!nt /i)) 6!co"! th! "ost

i"ortant !ngin! in our !cono"5.

Gro/th ros!cts in India in g!n!ra) ar! tr!"!ndous. +ith th! si! and ou)ation9 th!r! is

(!r5 )itt)! dang!r o* th! traditiona) *!ar o* s)o/do/n in d!"and. E(!n as saturation starts to

6ui)d u in th! "!tros9 th!r! ar! hundr!ds o* s"a)) citi!s and to/ns that asir! to 6! "!tros in

th! *utur! and st! in to ro(id! n!/ "ar0!ts. Th! t!)!co" r!(o)ution in this countr5 is a

cas! in oint.

4o/!(!r9 histor5 /i)) not n!c!ssari)5 suort this (i!/oint gi(!n that o(!r th! ast *!/

5!ars9 th! ic! cr!a" industr5 has n!(!r r!a))5 gro/n *ast!r than 1& !r annu". ut this

ti"! th! d!"and /i)) 6ig 6!caus! o* roduct as /!)) as th! chang! in th! r!tai) )andsca!9

/hich /i)) ro(id! "or! oortuniti!s *or s!))!rs and 6u5!rs to our "od!) is tai)or "ad! to

ta0! ad(antag! o* th! 6oo" in th! r!tai).

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On! disad(antag! a6out "!!t in a 6!tt!r !n(iron"!nt. This is tru! not on)5 o* ic! cr!a"s 6ut

a)so o* ractica))5 !(!r5 *ood cat!gor5 that can d!)i(!r on roduct9 8ua)it5 and s!r(ic!. Ic!

cr!a"s has 6!!n that it is tr!at!d )arg!)5 as an i"u)s! urchas! in this countr5. +hi)! that

!rc!tion /i)) not chang! !asi)59 th! d!(!)o"!nt o* n!/ consu"tion dri(!rs )i0! "a))s9

h5!r"ar0!ts9 "u)ti)!;!s9 !tc o!ns u n!/ a(!nu!s *or this co"an5.

"e+and "riers

Gro/th o* "a))s and "u)ti)!;!s across th! countr5 is 6oon *or as0in Ro66ins to acc!ss

good )ocations and ta th! r!ad5 consu"!rs. Th!r! is an incr!as! in custo"!rs /ho d!"and

th! 6!st /ithout co"ro"is!s. P!o)! ar! (!r5 ha5 to a5 "or! i* th!5 ar! gi(!n a 8ua)it5

roduct at ar /ith th! 6!st a(ai)a6)! int!rnationa))5. A)so9 6urg!oning disosa6)! inco"!s

)!ad to incr!as!d consu"tion.

Trends

Th!r! is an incr!as! in ti)t to/ards r!"iu" roducts as oos!d to !;!nsi(!J9 /h!r! on!

a5s a ric! 6ut g!ts 8ua)it5 and s!r(ic!. Qou /i)) s!! "or! and "or! co"ani!s h!ading into

th! hint!r)ands in an att!"t to !n!trat! th! s"a))!r to/ns and rura) 6!)ts9 as th!5 ro"is! to

o**!r th! n!;t surg! o* gro/th.

Iss*es and Concerns

For th! ic! cr!a" industr59 d!(!)o"!nt and a(ai)a6i)it5 o* a good co)d chain co(!ring th!

countr5 is !ss!ntia) /ithout /hich th!5 cannot r!ach th! "ar0!t targ!t. Anoth!r issu! o*

conc!rn is !sca)ating ric! o* r!a) !stat!.

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Th! r!asons *or this "ight (ar59 6ut th! sing)! und!nia6)! *act is that r!a) !stat! ric!s ar!

r!aching )!(!)s that can no )ong!r 6! t!r"!d as on)5 a 6u66)!. In *act a 6u66)! "ight 6!

/!)co"! i* it h!)s 6ring ric!s do/n to r!a)istic )!(!)s9 6ut un*ortunat!)5 th!r! is no sign o*

it ha!ning.

I* this tr!nd continu!s9 r!tai) 6usin!ss is going to *ind it incr!asing)5 hard to d!)i(!r r!turns.

ac0 o* 8ua)it5 and incr!as! in ric!s ar! th! 6igg!st conc!rn thr!at!ning to thro/ a)) gro/th

)ans co")!t!)5 out o* g!ar *or as0in Ro66ins.

!*%so*rcing:ogis%ics

as0in Ro66ins ic! cr!a"s *or th! !ntir! South Asian "ar0!t ar! "anu*actur!d in th!ir

*actor5 in Pun!. Th!5 ha(! ot!d *or outsourcing as a 6!tt!r 6usin!ss "od!). On! o* th!ir

6!st d!cisions9 /hich has aid th!" a handso"! di(id!nd o(!r th! ast *!/ 5!ars9 has 6!!n

th!ir "o(! to outsourc! th!ir distri6ution and )ogistics to cor! )a5!rs. Co)d chain )ogistics is

c!ntra) to th! ic! cr!a" 6usin!ss 6ut th! iron5 h!r! /as that it /as not th!ir cor! co"!t!nc5.

As a r!su)t /h!n th!5 o!rat!d it9 th!5 /!r! !;!nding (a)ua6)! r!sourc!s to conduct this.

Fi(! 5!ars ago th!5 d!cid!d to co")!t!)5 outsourc! this art o* th!ir 6usin!ss *ro" *actor5

to th! )ast "i)!J. This has h!)!d th!" i""!ns!)5 in a))ocating (a)ua6)! r!sourc!s to "or!gain*u) acti(iti!s.

O(!r th! ast 13 5!ars9 th! as0in Ro66ins 6rand has gro/n raid)5 in th! countr5 to 6!co"!

th! sing)! )arg!st r!"iu" ic! cr!a" 6rand and toda5 it o!rat!s o(!r 2&& *ranchis!d stor!s

in 3' citi!s.

+hi)! t!chno)ogica) ad(anc!s do h!) in d!)i(!ring gr!at!r custo"!r satis*action9 it is

d!*init!)5 not !as5 "anaging th! (!r5 t!chno)og5. Gi(!n th! raid chang!s and strid!s in

t!chno)og59 it is a di**icu)t tas0 to continuous)5 0!! on!s!)* a6r!ast o* th! )at!st

d!(!)o"!nts9 !(a)uat! th!ir r!)!(anc! to th!ir 6usin!ss and "anag! th! cost@6!n!*it "atri;-

not to s!a0 o* th! i")!"!ntations.

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Th!5 ha(! !"6ar0!d uon an a"6itious )an to )in0 a)) th!ir stor!s through a co"r!h!nsi(!

co"ut!riation initiati(!9 /hich /i)) inc)ud! a oint-o*-sa)! so)ution *or th! custo"!r at th!

*ront !nd. Onc! co")!t!d9 th!5 ho! to ha(! s!a")!ss *)o/ o* in*or"ation@IS in r!a)-ti"!

across a)) (!rtica)s. This /i)) cr!at! (a)u! right *ro" "ar0!ting to roduction to in(!ntor5

)anning to distri6ution.

Th!5 ha(! a curr!nt IT /or0*orc! o* *i(!. 4!ad o**ic! *or"s th! oint o* contro) *ro" /h!r!

a)) in*or"ation is diss!"inat!d as /!)) as co))!ct!d9 co"i)!d and ana)5!d. Th! r!giona)

IS@IT gu5s ar! oints o* coordination *or a)) our *ranchis!!s in th! r!s!cti(! ar!as. Th!ir

ro)! in(o)(!s i")!"!ntation9 training and o**!ring 6ac0 u and trou6)!-shooting.

Foc*sing on %he C*s%o+er

As art o* th!ir custo"!r satis*action !**orts9 th!5 ha(! cr!at!d an int!rna) ca)) c!nt!r *or

th!ir ho"! d!)i(!r5 s!r(ic! in u"6ai. This /as a d!cision th!5 too0 a*t!r tr5ing third art5

ca)) c!nt!rs to hand)! inco"ing ca))s *ro" custo"!rs using th!ir Sing)! Nu"6!r ia)-in

s!r(ic!. O(!r ti"!9 th!5 r!a)i!d that in ord!r to tru)5 d!)i(!r th! right !;!ri!nc! to th!

custo"!r ca))ing on)in!9 it /as n!c!ssar5 to ha(! !o)! /ho und!rstood th! ic! cr!a"

6usin!ss *ro" /ithin. As a r!su)t /! d!cid!d to cr!at! our o/n ca)) c!nt!r /ith our sta**

train!d co")!t!)5 in a)) as!cts o* th! 6usin!ss.

Th!5 /ant!d to !nsur! that th! custo"!r /ho ca))s g!ts th! sa"! s!r(ic! o(!r th! hon! as

th!5 /ou)d !;!ct /h!n /a)0ing into on! o* th!ir 2&& out)!ts nation/id!. and/idth has

6!!n an issu! *or s!(!ra) !nt!rris!s. +hi)! no/h!r! n!ar th! s!!d s!!n in th! +!st9 th!5 ar!

g!tting th!r! s)o/)5 6ut sur!)5. E**ici!nc5 is a 6it o* a ro6)!"9 6ut again th!r! ar! t!!thing

issu!s9 /hich /i)) g!t sort!d out as th! "ar0!t "atur!s.

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F*%*re -'ans o2 Baskin Robbins

O(!ra))9 as th!5 said th!5 /ou)d targ!t th! Ti!r-II citi!s as /!))9 as0in Ro66ins is no/

)anning to ra" u its stor! count in s"a))!r citi!s s!!ing a ris! in d!"and and consu"!r

s!nding. In th! n!;t t/o 5!ars9 th! co"an5 ai"s to dou6)! its nu"6!r o* stor!s across th!

countr5 *ro" 3&& 65 incr!asing th! stor! d!nsit5 in ti!r-II citi!s. Prior to 2&&&9 th! a(!rag!

si! o* its stor!s /as 19&&& s8 *t. In 2&&29 th! co"an5 conscious)5 adot!d a strat!g5 to

co"r!ss its stor! si!. In 2&&'9 th! a(!rag! si! o* its stor! dro!d to 2'& s8 *t.

Int!r!sting)59 its strat!g5 o* going to s"a))!r citi!s /ou)d !na6)! it to ha(! 6igg!r stor!s9

ta0ing th! a(!rag! si! o* its stor!s to %&& s8 *t. G!tting th! right *ranchis!!s /ou)d a)so 6!

crucia) to its succ!ss as it /i)) not "ar0!t its ic! cr!a" rang! through th! "o" and o

stor!s. 4o/!(!r9 gro/th in "od!rn r!tai)9 "u)ti)!;!s and *in!-dining ha(! h!)!d g!n!rat!

d!"and *or its 6rand. Th! ic! cr!a" "a0!r is )oo0ing at ti!-us /ith air)in!s as /!)).

Sinc! as0in Ro66ins i"orts "ost o* its (ita) ingr!di!nts9 such as choco)at! and oth!r

*)a(ours9th! co"an5 hi0!d ric!s 65 1& !r c!nt in Ari) on th! 6ac0 o* a ris! in co""odit5

ric!s. +ith a turno(!r o* n!ar)5 Rs ,& cror! in FQ&9 th! co"an5 is gro/ing at th! rat! o*

3' !r c!nt a 5!ar as co"ar!d /ith th! industr5 a(!rag! o* 12 !r c!nt.

Th! ic! cr!a" chain s!nds to $ !r c!nt o* its r!(!nu!s on ad(!rtising !ach 5!ar /hich

inc)ud!s "or! ad(!rtis!"!nts 6as!d on hoardings9 6ann!rs9 /ord-o*-"outh and un)i0! oth!r

6rands9 ha(! 0!t th! T!)!(ision ad(!rtis!"!nt a6so)ut!)5 ni).

A *!/ 5!ars ago9 th!5 /!r! r!ducing th! si! o* th!ir *or"ats9 6ut in th! ast si;-!ight

"onths9 th!5 ha(! 6!!n aggr!ssi(!)5 ra"ing u 6!caus! th!r!s gr!at ot!ntia) *or !at out

toda5.

4!nc! in such a sc!nario9 r!s!ntation and ac0aging is 0!5. Thus9 th!ir *utur! )ans in(o)(!

6!tt!r ac0aging !**orts and gi(ing th! custo"!r r!asons *or co"ing 6ac0 65 r!taining c)assic

*a(orit!s and !;!ri"!nting /ith n!/ *)a(ors constant)5. A)so9 th!5 ar! going to und!rgo

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*)a(or r!(a"ing. So no/ /! /ou)d not =ust g!t th! r!gu)ar (ariants )i0! choco)at!9

stra/6!rr5 and (ani))a9 6ut a)so gr!!n a)!9 6u66)!gu" and 6)u! "int and cou)! o* oth!r

*ruit *)a(ors a)so in th! n!ar *utur!.

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C!M0ETIT!RS A" 0R!M!TI!S !F BAS@I R!BBIS

E(!n though /h!n as0in Ro66ins !n!trat!d in India in th! 2&&&s9 initia))5 it /as 8uot!d to

6! an !;!nsi(! ic! cr!a" =oint. Th! 8ua)it5 /as u to th! "ar0 and traditiona))5 as th! na"!

sugg!st!d o* ha(ing 31 *)a(ors9 !ach *or !ach da5 o* th! "onth c)!ar)5 didnt carr5 out th!

sar0s in th! Indian "ar0!t sc!nario. Th!r! /!r! "an5 issu!s r!)at!d to this. as0in Ro66ins

6!ca"! a 6rand that cou)d 6! a**ord!d on)5 65 th! cr!a" soci!t5. +h!n th!5 !nt!r!d th!

"ar0!t /ith th!ir ric! oint at around Rs.,& !r scoo9 it didnt g!t th! "uch a/ait!d

r!sons! 65 th! Indian custo"!rs. A scoo o* as0in Ro66ins ic! cr!a" /as co"ar!d to

that o* a '&& g" ac0 o* )oca) ic! cr!a" )i0! A"u) or /a)it5 +a))s. A)so9 th!r! /!r! )oca)

Indian )a5!rs aart *ro" th! "uch r!no/n!d A"u)9 /a)it5 +a))s9 Badi)a)9 Natura)s

!tc!t!ra r!s!nt th!n. Thus9 a*t!r a rigorous "ar0!t sur(!5 and 6rand r!(a"ing9 "or! than

ha)* o* th! as0in Ro66ins out)!ts /!r! c)os!d do/n and a co")!t! o(!ra)) chang! /as

6rought in. Th! )ogo o* as0in Ro66ins got chang!d *ro"

to th! curr!nt n!/ on! i.!

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A)so9 th!r! /as a "a=or shu**)! in th! *)a(oring s!ction as th!5 got don! /ith th!

con(!ntiona) (ani))a9 choco)at!9 stra/6!rr5 *)a(ors and 6rought in *)a(ors /ith a ing )i0!

+or)d C)ass choco)at!9 A)"ond ra)in! !tc!t!ra. Not on)5 this9 as0in Ro66ins a)so has

ro"otiona) o**!rs that usua))5 inc)ud! )i0! XF)a(or o* th! onth or F)a(ors adot!d *ro"

th! r!c!nt "o(i! *)ic0s or curr!nt tr!nds *)oating in th! "ar0!t. On! such !;a")! can 6!

gi(!n as during th! r!)!as! o* Sid!r"an 39 as0in Ro66ins introduc!d thr!! n!/ *)a(ors

a5ing a tri6ut! to th! su!rh!ro!s /ho co"! to )i*! on th! giant scr!!ns. Fo))o/ing /!r! th!

*)a(ors in*)u!nc!d 65 th! charact!rs o* th! *a"ous "o(i!.

-+!6-s)ing!r> A t!"ting co"6ination o* 6)u!6!rr5 and stra/6!rr5 sor6!ts

-Gr!!n Go66)!r> T/in *)a(or!d istachio and (ani))a ic! cr!a"s.

- Sandstor"> S"ooth si)05 hon!5 6utt!rscotch ic! cr!a"

Si"i)ar)5 during th! r!a)it5 sho/ X5a Aa Panch(i Pass S! T! 4ai9 as0in Ro66ins ti!d

u /ith Star P)us in a =oint ro"otion and ca"! u /ith its s!cia) *)a(or 0no/n as XPanch(i

Pass *)a(or /hich /as choco)at! *udg! 6ro/ni! ic! cr!a" /ith *udg! 6ro/ni! i!c!s and

roast!d a)"onds. Not on)5 this9 on th! urchas! o* !(!r5 scoo9 a scratch couon /as

r!s!nt!d and had dai)5 gi*ts )i0! 8ui 6oo0s9 B !tc!t!ra. P)us9 th! 6u"!r ri! /as to

"!!t Shah Ru0h han9 th! host o* th! sho/ or to 6! an audi!nc! "!"6!r in th! hit r!a)it5

sho/. This /a59 as0in Ro66ins tri!d as a)/a5s to targ!t its 6!st audi!nc! i.! chi)dr!n to

ro"ot! th! rogra" as /!)) as attract custo"!rs to its out)!t. This /as ind!!d a succ!ss*u)

!**ort.

Ta)0ing a6out co"!titors9 as0in Ro66ins do!s *ac! co"!tition *ro" )oca)9 r!giona) ic!

cr!a" 6rands such as Natura)s9 A"u)9 /a)it5 +a))s9 G!)atos !tc.

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as0in Ro66ins 6!ing a 8ua)it5 tast!"a0!r and its ric! oints o(!r and a6o(! th! r!st o* th!

6rands ha(! "ad! it di**icu)t in th! initia) 5!ars /h!n it 0ic0 start!d its 6usin!ss in India. ut

a*t!r 5!ars9 and th! tast! o* an Indian consu"!r changing o(!rti"!9 and int!rnationa) ic!

cr!a" 6rands )i0! G!)ato Ita)iano arri(ing in th! Indian sc!nario9 as0in Ro66ins /!r! no/

"or! !asi)5 acc!ssi6)! 65 th! consu"!r. This /as du! to th! usua) 6rands 6!co"ing co""on

to th!ir tast! 6uds and th! !st *or tr5ing so"! n!/ 6rands )!d to th! s)o/ and rising succ!ss

o* as0in Ro66ins. G!)ato9 a t5! o* an ic! cr!a" /hich is said to 6! originat!d in Ita)5 is

0no/n to 6! )o/-*at ca)ori! ic! cr!a" ou)ar *or ca)ori! conscious !o)!. 4!nc!9 th!ir

targ!t audi!nc! /as "ini"a) in th! Indian "ar0!t as a nor"a) consu"!r h!r!9 6u5s an ic!

cr!a" to s!!0 )!asur! and not /orr5 a6out its oth!r *actors. As it /as *at-*r!! ic! cr!a"9 th!

ric! rang! o* g!)atos /as high!r than that o* as0in Ro66ins. This )!d to th! consu"!r shi*t

its *ocus to no/ a ch!a!r ic! cr!a" 6rand9 as0in Ro66ins.

Sa)!s ros! a*t!r th! G!)atos !nt!r!d th! Indian "ar0!t. ut ti)) no/9 aart *ro" oth!r ic!

cr!a" 6rands9 /hat r!"ains as0in Ro66ins "ain co"!titor /ou)d 6! )oca) co**!! ca*!s

)i0! arista9 ochas9 Ca*U Co**!! a5 as th!5 o**!r th! )!asur! to sit and ta)0 o(!r a cu o*

co**!!. 4!nc!9 du! to th! attracti(! a"6i!nc!9 a )arg! nu"6!r o* a(!rag! Indians r!*!r

s!nding th!ir ti"! in th!s! ca*!s rath!r than a as0in Ro66ins 0ios0s. Thus9 in *utur! th!5

do ha(! )ans to ti! u /ith so"! "a=or ca*U d!a)!rs to s!t u "ini as0in Ro66ins /ith

ou)ar *)a(ors in th!ir ca*U its!)*. This /i)) d!*init!)5 /id!n sco!s *or as0in Ro66ins

*utur! gro/th.

Th! a(!rag! annua) !;!ns!s that as0in Ro66ins initiat!s *or ad(!rtis!"!nt in *or" o* rint9

"!dia !tc!t!ra su"s u to around Rs. 2 cror!. as0in Ro66ins o!rat!s its 6usin!ss 65

ha(ing out)!ts in "a))s9 0ios0s or standa)on! stor!s and r!c!nt)5 introduc!d oung! *or"ats.

Th! caita) rais!d *or th! )oung! *or"ats is "uch "or! than that o* th! standa)on! stor!s.

Gi(!n 6!)o/ is th! d!tai)s n!!d!d to s!t u a as0in Ro66ins *ranchis!!.

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as0in Ro66ins is on! o* th! *ast!st gro/ing *ood 6rands in India. Curr!nt)5 /! ha(! "or!

than 2$& *ranchis!d out)!ts across th! nation. or! than 1&& *ranchis!!s ar! "u)ti)!

*ranchis!!s /ho o/n "or! than on! R stor!. This in its!)* rati*i!s th! 0ind o* con*id!nc!

R g!n!rat!s in th! *ranchising /or)d. as0in Ro66ins is r!no/n!d *or its +or)d C)ass Ic!

Cr!a"s9 Sunda!s9 !(!rag!s # Ic! Cr!a" Ca0!s.

Uni%/

In(!st"!nt> Rs. 9'&9&&& - Rs. 1,9&&9&&&

Mas%er/

In(!st"!nt> --Countri!s A(ai)a6)!> India

M*'%i Uni%s/In(!st"!nt> --Countri!s A(ai)a6)!> India9+hat ar!as ar! a(ai)a6)!*or :nit *ranchis!Y>

Nation/id!

or%h Wes% Eas% So*%h Cen%ra'

N!/ !)hi4ar5ana4i"acha)Prad!sh

a""u andash"ir Pun=a6:ttarancha)

Gu=aratRa=asthanaharashtraGoa

Assa"!gha)a5aiora"Triura

Arunacha) Prad!shaniur Naga)and+!st !nga)Si00i"

!ra)aarnata0aOrissaTa"i) Nadu

Chhattisgarhadh5a Prad!shihar har0hand

Union Terri%ories/

Anda"an # Nico6ar Pondich!rr5Chandigarha0shad/!!a"an and iu

Is th!r! a unit *ranchis! *!! inc)ud!din this *igur!Y

Q!s E;tra A"ount > Rs 39&&9&&&

4o/ "uch /or0ing caita) is

r!8uir!d in unit *ranchis!addition to thisY

Rs.'&9&&& Rs.1&&9&&&

Is th!r! !;c)usi(! t!rritoria) rightsgi(!n to a unit *ranchis!Y

No

Ar! an5 !r*or"anc! guarant!!s

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gi(!n to unit *ranchis!!sY No

+hat is th! anticiat!d !rc!ntag!r!turn on in(!st"!ntY

3& - 3'

+hat is th! )i0!)5 a5 6ac0 !riod o*caita) *or a unit *ranchis!Y 2-3 5!ars

Ar! th!r! oth!r in(!st"!ntr!8uir!"!ntsY No

Pro!rt5 !tai)s/

+hat t5! o* ro!rt5 is r!8uir!d*or this *ranchis! oortunit5Y

Ca*U9 Par)or9 ios0s

F)oor ar!a r!8uir!"!nt> %&&

Pr!*!rr!d )ocation o* unit *ranchis!d

out)!t>

2&& SFT and a6o(! *or Ca*!s # Par)ors ,% SFT and a6o(! *or ios0sin a))s

!%her "e%ai's/

o 5ou ha(! a standard Franchis!Agr!!"!ntY

Q!s

4o/ )ong is th! *ranchis! t!r" *orY 3 5!ars.

Is th! t!r" r!n!/a6)!Y Q!s9 3 5!ars.

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Cas! Stud5- Th! oot Stor!s

oot Stor!s 6uo5!d 65 th! !nthusiastic custo"!r r!sons! to his X"or! *or )!ss

(a)u! d!a)s that run throughout th! 5!ar9 th! co"an5s "anaging dir!ctor9 a5

Guta9 no/ ho!s to touch th! "agic *igur! o* Rs 1&& cror!s and 1&& out)!ts

65 2&&$

Guta is in *act in a 6uo5ant "ood. And *or good r!asonZ 4is chain o* stor!s is

on a strong gro/th cur(! and has r!c!nt)5 add!d 129&&& s8.*t. o* r!tai) sac!

/ith th! o!ning o* thr!! n!/ %9&&& s8. *t. out)!ts at u"6ais a)ad9 ahi"

and Sion su6ur6s in 8uic0 succ!ssion9 ta0ing th!ir ta))5 o* out)!ts to 3&. Not 6ad *or a co"an5 that had o!n!d its *irst out)!t =ust *our 5!ars ago in 2&&%.

So /hat is Th! oot a)) a6outY E;)ains Guta9 LTh! oot is a "u)ti-6rand!d

discount stor! that o**!rs its custo"!rs a /id! rang! o* "!rchandis! /ith

discounts ranging 6!t/!!n 2' and ,& throughout th! 5!ar. Th! oots

str!ngth as a r!tai)!r )i!s in ro!r rocur!"!nt and !;c!))!nt su)5 chain

"anag!"!nt s5st!" /hich h!)s in g!tting 6!tt!r ricing *ro" th!

"anu*actur!r and th!r!a*t!r assing th! 6!n!*it on to th! consu"!r. +!

curr!nt)5 o**!r th! !r*!ct "i; o* unis!; c)oth!s in s!"i-*or"a)9 *or"a)9

casua)s9 sorts aar!)9 0ids /!ar9 *oot/!ar9 acc!ssori!s !tc.M

A)r!ad5 a ou)ar shoing d!stination *or !o)! 0!!n on *)aunting th! )at!st

6rands at a ric! that suits th!ir oc0!ts9 Th! oot stoc0s a s)!/ o* r!ut!d

*or!ign and Indian 6rands that inc)ud!s 6ig na"!s )i0! aa9 ossini9

Addidas9 Ni0!9 CAT9 I9 S50ar9 Tuscan B!r(!9 us Sto9 +9 +!)sun9 Pu"a9

R!!6o09 Ecc!ntrics9 Fi)a9 :"6ro9 N!/ a)anc!9 Ban 4u!s!n9 !rc!d!s9 A))!n

So))59 A))!n So))5 /o"!n9 Arro/9 !!9 !! Coo!r9 +rang)!r9 P!! !ans9

Par;9 Par0 A(!nu!9 )ac06!rr5s9 Ri*)!9 Rag =!ans9 R!ca and SF =!ans at

h!a(i)5 discount!d ric!s 3,' da5s o* th! 5!ar.

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LEach oot stor! is d!sign!d around a c!ntra)i!d th!"! that

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