Franchising Model of Retail Continues to Shine Despite Economic Slowdown

India is one of the world’s largest and fastest emerging markets, and its vast population size and cultural diversity have made it a prime environment in which franchising can thrive. Despite the economic slowdown and the gross domestic product (GDP) at its slowest stage in the last six years, the franchising model continues to witness growth in both urban and rural regions. The franchise industry is growing at a rate of 30-35 percent per annum and the sales turnover of the sector was recently valued at over US$7 billion…

- Sandeep Kumar

You’ve opened a store and have established a clientele. You’re making profits, investing in the correct technology and attracting more consumers – growing much more than anticipated in the first month. Now you must expand, but is sole proprietorship always the way forward?

Sole proprietorships have a number of risks involved – a business owner must come up with a location, strategy, hire workers and market his wares a several times over, as many times as he plans on opening a new store. Each store then has to face the risks of failure, demanding the complete attention of the owner. This divided attention between stores is not for everyone.

For those who want to open more stores but are at a loss of how to do it, there are several ways to own and operate a successful business – the most popular of them being the franchise model.

According to Shopify.in, in its most basic terms, franchising is a model for expanding a business and distributing goods and services through a licensing relationship. A franchisee (the location owner) pays an initial fee and ongoing royalties to a franchisor (the brand or corporate) in order to use an existing company’s trademark, logo, and system of business, as well as the right to sell its products and have constant support from the franchisor.

India is one of the world’s largest and fastest emerging markets, and its vast population size and cultural diversity have made it a prime environment in which franchising can thrive. Despite the economic slowdown and the gross domestic product (GDP) at its slowest stage in the last six years, the franchising model continues to witness growth in both urban and rural regions. The franchise industry is growing at a rate of 30-35 percent per annum and the sales turnover of the sector was recently valued at over US$7 billion.