Franchising As A Model For Business Expansion In Foodservice

The Food & Beverage industry dominates India’s franchise sector. In India, the foodservice industry has evolved from homegrown, standalone, family-run business ventures to international partnerships with various business models. Specific to Quick Service Restaurants, the Fast Food Franchise model remains one of the most attractive operating models for international brands foraying into India.

Franchise is a business opportunity that can lead to the foundation of a successful business empire. It is a marketing concept adopted by companies for business expansion. When implemented, a franchiser licenses its know-how, procedures, intellectual property, use of its business model, brand and rights to sell its branded products and services to a franchisee. In return the franchisee pays certain fees and agrees to comply with certain obligations, set out in the franchise agreement. A Franchise is generally a person or a company that is given the license to run a business under the Franchisor’s brand name, trademarked by the Franchisor. The former purchases the Franchise from the latter. The Franchise in all circumstances must follow the rules and regulations that are established by the Franchisor, and usually, the Franchise has to pay an ongoing Franchise royalty fee to the franchisor.

Franchising in India is at a growing stage. As per a report published by Franchise Asia, the growth of the franchise industry in India shows no signs of slowing down. The sector proved to be highly profitable in 2017 and 2018 and is on track to emerge even stronger this year. India is now seen as 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. 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.