Franchising biz gets a fillip
In an environment of looming job insecurities, the Rs 15,000 crore franchising market, has seen many professionals take to it. Radhika Pancholi reports.business Updated: Mar 15, 2009 22:08 IST
In an environment of looming job insecurities, the Rs 15,000 crore franchising market, has seen many professionals take to it.
Take Snap Fitness for example. A chain of gyms headquartered in the US, Snap has already opened three centres in Mumbai, Bangalore and Chennai and is looking at opening 250 more outlets across the country in the next three years.
“What’s pulling people towards taking up franchising is the option of absentee ownership,” said Srilekha Reddy, director marketing, Snap India.
Absentee ownership means that a person can invest in the franchise even as they carry on with their day-to-day work. “We take care of the rest, right from setting up the equipment to hiring staff,” said Reddy.
She said that 70 per cent of the franchise owners who had signed up for about 15 franchises in the pipeline had opted for absentee ownership.
Australia-based Cartridge World, which has already got 48 operational stores across India swears by the franchising model. “Globally, we are $500 million company and growing at many notches above the current industry growth rate of 15 per cent,” said Naveen Rakhecha, CEO, South Asia, Cartridge World, which is a retailer of printer cartridge refilling services.
“Franchising is all about getting the model right by picking up the right franchisees and not just someone who has extra money to spend and standardising the product or service,” said Rakhecha, adding that the growth of the franchising industry in India had only just begun as more and more people turned entrepreneurs.
“A lot of people are coming back to India and franchising is proving to be an ideal business to get into as it lowers the risks for an entrepreneur,” he said.
“An initial investment of Rs 15 lakh, apart from the real estate costs, which includes franchise and training fee as well as the franchise kit, can get a person a Cartridge World franchise,” said Rakhecha, adding that most of their Indian franchises have achieved operational break-even in the first year itself.