The Hidden Struggles of Small Franchise Chains in F&B Industry

Numerous smaller or homegrown brands are grappling with difficulties in sustaining their businesses post-expansion. Despite the apparent ease of spreading franchises and increasing the number of outlets in India, the real challenges lie in sustaining operations and achieving profitability, making it a complex and problematic endeavor.

- Sakshi Singh

Devansh Kumar, hailing from Lucknow, found himself compelled to make a tough decision: the closure of his F&B outlet in Kapoorthala. Merely a year had passed since he took the franchise from a promising brand based in Hyderabad, Lassi And Shakes. To his surprise, upon deciding to shut down his outlet, he discovered a trend across the country multiple outlets of the same brand were closing. The primary reason behind this was that franchise owners were unable to generate the promised profits as outlined by the parent company.

Although the franchise assured comprehensive support during the initial stages of the franchise agreement, the reality fell short. Challenges emerged in maintaining quality, consistency, and adhering to common brand standards. This case is emblematic of a broader issue in India, where numerous smaller or homegrown brands are grappling with difficulties in sustaining their businesses post-expansion. Despite the apparent ease of spreading franchises and increasing the number of outlets in India, the real challenges lie in sustaining operations and achieving profitability, making it a complex and problematic endeavor.

The Indian F&B industry has witnessed a notable surge in franchise expansion by homegrown brands. This trend is primarily driven by two key motivations: the desire to proliferate their brand presence across multiple locations and the recognition of franchising as a lucrative business opportunity. The struggle to maintain quality and consistency across diverse franchise outlets has become a formidable obstacle, hindering the success of many small players in the Indian F&B landscape.