India is an attractive market for American and European franchisors. Demand for U.S. and other western countries’ brands are strong in telecom, retail, education, garments and apparel, specialized food services, entertainment, courier (package delivery) services, stationery and gift shops, healthcare, fitness and personal grooming clinics.
Indian companies with strong brand recognition have created successful examples of franchise success in India There is Archie’s for giftware, MRF for automotive tires, NIIT for computer training schools and Apollo Hospitals for healthcare. While growing at double-digit rates, franchising still accounts for under 5 percent of total retail sales in India. Some reports suggest that the number of franchisees this country of over 1 billion people is under 50,000.
Many overseas companies have established a presence in India through franchising. In the hospitality and food service industries, this has been the preferred method for starting operations. Success stories include: Hertz, Avis and Budget car rental; Radisson, Best Western and Quality Inn hotels; Kentucky Fried Chicken, Domino’s Pizza, TGI Friday’s, Ruby Tuesday, Subway, and Baskin Robbins for food.
Unique features of India’s market include:
Taking a regional approach to combat Indian diversity: Companies prefer to appoint master licensees on a zonal basis since language, culture, real estate practices and professional networks tend to be strong within state boundaries but weak when crossing certain geographical boundaries.
Local Culture and Tastes: Understanding local culture and tastes is vital to a franchise success. American companies such as McDonald’s, Pizza Hut and Domino’s have developed special India menus as a keystone to their success.
Expensive Real Estate: In the metro cities of India, retail space continues to relatively expensive and the choices somewhat limiting when measured by international standards.
Amritt’s go-to-market service for India helps with developing and executing roadmaps to expand your presence:
• Feasibility Studies & Financial Analysis
• Conducting insightful market and consumer research
• Compliance with franchise law and local ordinances such as zoning, waste removal, and other safety codes
• Negotiation with Indian counterparts
• Attract and retain top marketing and business development talent
• Avoiding cultural gaffes