Stepping Into New Era
2017 has been a successful year for liberty as it expanded its markets and initiated newer partnerships. Anupam Bansal, Executive Director, Liberty Group, says, “We had a very successful launch of a new brand called Healers. It saw a very high degree of acceptance and generated a lot of genuine interest amongst the business partners for association.” Currently, Liberty has 400 exclusive showrooms, presence in 6,000 multi brand outlets and 150 distributors which make it an omni-present brand. In the next three years, the company sees the brand interfacing with a much larger group of customers spread across tier II cities and will add about 100 new stores. The company has adopted a business model which consists of opening of exclusive brand outlets and multi brand outlets. It partners with franchisees and invest in him to help him make his business prosper. Already casting a presence in 25 countries, it opened its first showroom in Sri Lanka and Ghana.
Bask In the Glory
The premium ice cream brand with the largest market share in India, Baskin Robbins continues to explore and expand in newer towns through its franchisees. “Franchisees are the pillar of our organization which drives 100 per cent of our front-end retail business. Currently, we have 725 parlors across 130 towns in the country and we are in search of newer towns. Annually we open around 70-80 parlors but in the future, we are planning to launch around 100 parlors across 60-70 newer towns which would include tier I to V territories spread over south, west, north and east region. Noticeably, top 18 cities drive 60 per cent of our business,” said Mohit Khattar, Chief Executive Officer, Graviss Foods. The secret behind successfully keeping its marriage intact with franchisees for over the last 2 decades lies in its philosophy of hand holding franchisees through thick and thin. “Our target is to grow by 14-15 percent by 2019,” he added.
Glocalising the Golden Arches
From the first store in 1996 in Mumbai to 265 stores across South and West India in 2017, Amit Jatia has come a long way. “The key to our success is the fact that we became locally relevant to the people in India. When we started out, we were referred as a big American multi-national brand. So shedding the inhibition was the first thing that we did. This was followed by the next set of people to come in who were looking for affordability and therefore localisation became the corner stone of the strategy for us,” states Amit Jatia, ViceChairman, Westlife Development (WDL), its subsidiary Hardcastle Restaurants owns of the Master Franchisee of McDonald’s restaurants in India, runs all the restaurants in west and south India. WDL which provides direct employment to over 8500 people in 36 cities reported the total sales at INR 9307.9 million in the fiscal ended March 31, 2017. However, 2016-17 was a challenging year for businesses in India. On how he sailed through,Jatia says, “It was a year full of learning, unlearning and making bold moves to bring out the most distinctive innovations and set the standards for the QSR industry. We recorded a positive same-store sales growth at 5.5 per cent in that quarter.” McDonald’s has truly come of age with its latest campaign ‘Flavours Without Borders’ strived towards a diverse audience. Giving a green signal on expansion, Jatia says, “We look forward to double our restaurant base by 2022. WDL plans to invest INR 750 – 800 crore in next five to seven years.”
The objective behind Eurokids was to create a learn with fun environment for the children where they could play, learn, grow and imbibe essential life skills. Today, EuroKids has had a great impact on the education landscape of the country. It has grown from two preschools in Mumbai in 2001, spreading across three countries, 1000+ pre-schools, 350+ cities, having nurtured over 350,000+ children. In 2017, EuroKids enhanced its network in its key markets of Mumbai, Pune, NCR and Bengaluru in addition to penetrating new markets in Tier II and III cities in India. Additionally, it also acquired a strategic stake in India’s largest premium Pre-K company which is aligned to its ambition of providing a high quality premium experience. It is present in few international markets like Nepal and Bangladesh. Further, they are planning to expand in the Gulf Cooperation Council. Throwing light on expansion plans, Prajodh Rajan, Cofounder and CEO, EuroKids, says, “We will be opening 250+ franchise locations by April 2018.” One of the early learnings of the category was the acute shortage of teaching resources and the need to train and retain quality female teaching and support staff. To deal with this, EuroKids initiated EuroVarsity, an online teacher training and certification program for women. Another key learning was the need to have different revenue models for different locations. Metro markets, Tier II and III markets are dissimilar in nature and hence it was necessary to come up with a customized model that suited the financial abilities of different markets.
In Blooming Phase
In late 90’s and early 2000’s, Ferns n Petals was running only three exclusive floral boutiques in South Delhi. People got attracted and approached them to setup more boutiques with them. That’s when the idea of franchising came in. The franchise model worked well and the company started expanding since 2002. It slowly moved to other cities and today, Ferns n Petals is the largest floral retail chain in the world having a staggering network of 283 outlets across 93 cities in India. In 2016, the turnover of Ferns N Petals was INR 275 crore. Vikaas Gutgutia, Founder and Managing Director, Ferns n Petals, says, “Apart from opening 65 outlets in 2017, we forayed into cakes by launching Cakes ‘n’ More’ in April.”
The Key to Growth
Wyndham Hotel Group entered the Indian market in 2000 with the Ramada brand. Since 2010, the group has gained strong momentum through a realigned development strategy focused on a franchised model. At present, the group’s portfolio of operational hotels in the region has more than doubled. In the Eurasia region (which comprises of India, Sri Lanka, Bangladesh, Nepal, Pakistan, Uzbekistan, Kazakhstan, Mauritius and Maldives amongst other markets) Wyndham Hotel Group has 45 operational hotels with more than 4,600 rooms across India, Kazakhstan, Pakistan, Sri Lanka and Uzbekistan. In India, currently there are 34 operational hotels with 3,187 rooms across the country. Deepika Arora, Regional Vice President, Eurasia, Wyndham Hotel Group, says, “The aim is to have 75 operational hotels in the region by 2020.”
Aiding Ayurveda Awareness
Sri Sri Tattva (SST) comes with a goal of promoting health and wellness to every household. Arvind Varchaswi N, Managing Director, Sriveda Sattva, says, “With an increasing demand for the brand’s products in the health and wellness space, SST will soon launch its offerings through exclusive franchise models. In January, the brand expects to launch 1,000 stores across different formats.” The SST Mart will carry its entire range of FMCG offerings in the food, personal care and home care categories. It will also carry the herbal over-the-counter range of the brand. The second format called SST Wellness Place will be focused on health care. An Ayurveda doctor will be present in every center who will provide a detailed diagnosis and prescribe lifestyle changes as well as Ayurveda medicines to patients.
Betting on Rural India
While Most Start-Ups Choose a target market that comprises of urban, techsavvy city consumers, StoreKing chose to cash in on the huge rural consumer base, who are more loyal to local shopping centre or kirana stores. Sridhar Gundaihah, Founder and CEO, StoreKing, says, “Consumers in these areas have a greater purchasing power now and their aspirations are as demanding as a metro consumer. In these places, we build infrastructures based on technology logistics and payment, to connect these rural sellers with big supply chains.” Storeking is a demand-driven model. It does not have any physical inventory as it is totally virtual in nature. The variety of products that one can sell through the channel is the biggest advantage. It could be anything from phones, to pickles to home appliances.
New Growth Trail
The country’s oldest (listed with National Stock Exchange and Bombay Stock Exchange) integrated travel and travel related financial services company is steadily capitalizing through its franchisee centers. “We have around 92 franchise outlets covering over 150 markets including metros, mini metros and tier II and III cities. We are aiming to reach 100 franchise centers by the end of this year. Our franchise outreach has played a critical role in our expansion and helped us to enter the key markets,” said Rajeev Kale, President and Country Head, Leisure Travel, MICE, Thomas Cook India Limited. Apart from Thomas Cook India shops in key metros, their Gold Circle franchisees are present and extending their network in upcoming metro and mini metros. Conscious about its service offering, the company has its set agenda of getting right to its customers doorstep. Hence they are equally conscious about selecting the right franchise partners. Additionally, a manager is stationed at every key location
NIIT pioneered franchising in IT education in 1986, by delivering standardised technology learning through a robust franchisee network. In the past 36 years, the company has steered and led the training segment, and in the process played a crucial role in the success story of India’s IT industry. Its franchisee model is spread across over 40 countries. With a mission of “Bringing people and computers together successfully”, through innovative models and creating operational efficiencies, all the company owned and the partner centres are imbibing the spirit of brand ownership. Talking about the growth via franchise model, Prakash Menon, President, Global Retail Business, NIIT, says, “We strongly believe that NIIT’s success is a derivative of the success of our partners. Our USP has been the standardization of student learning experience.”
Started in 1995, for Career Launcher, growth has mainly come from franchises. Gautam Puri, Co-founder, Career Launcher, says, “I have always believed that a franchisee runs the business with at least 25 per cent more efficiency as compared to a set-up being run by employees.” He further adds, “The key reason for this is the prompt decision-making that happens in a franchise set-up. A franchisee is very close to the ground reality and helps us gain a lot of customer insights.” 2017 has been a wonderful year for the brand. This year the company went public, had multiple acquisitions and forayed into different test preparation verticals. Career Launcher currently has 100+ franchisee partner locations. It is working on an ambitious plan to add at least 1000 cities in the next three years. Further, they are planning to expand their reach to other Southeast Asian countries such as Bangladesh, Nepal, Sri Lanka and Singapore.
Man of Steel
Kamdhenu became the first company to introduce branded steel products. Started in 1994, it innovated a franchise business association model in 2004, wherein franchisees manufacture products based on technology, design and quality specifications provided by Kamdhenu. Talking about the foray in franchising, Satish Agarwal, Chairman and Managing Director, Kamdhenu, says, “As soon as the business intensified and the company enlarged to a multi-city entity, the franchise business model was brought into consideration so as to keep the obstacles of limited capacity and financial resources far.” This franchise business model helped in creating Kamdhenu’s brand leadership in steel retail. As a group, Kamdhenu does research and introduces new products based on customer requirement in the market. The asset light business model enables franchisee manufacturers to earn premium on their products thereby leading to higher capacity utilization. Currently, Kamdhenu is working with 70+ local manufacturers giving it penetration even in the tier II and III cities. The company owned Bhiwadi plant supports in innovation and product development and also serves as a training centre for all technical staff deputed at the franchisee’s unit. Kamdhenu TMT is the largest selling TMT rebar in the country. Its sales stand at over INR 6000 crore. Going forward the company is targeting 100 franchisees by 2020.
Envisioning Remax 2.0
RE/MAX entered India in 2009 and with it came real estate brokerage franchise, an emerging concept in India. Talking about his biggest learning while expanding through franchise model, Yatin Sharma, Chief Operating Officer, Re/max India, says, “It’s important to see that who is taking up your franchisee and how good he is as a leader. Is he that someone who could better the progress of your company in that area or region? For us it becomes imperative that we judge them properly as they would be managing our product, profitability and productivity.” Re/max India plans to set up 1,000 franchise offices by 2020. And recently, they brought on board tennis player Mahesh Bhupathi and former Miss Universe and actress Lara Dutta as its brand ambassadors. The company is also trying to introduce education related to real estate through a virtual university Re/max University and a real estate
Pioneering Preschool Franchise
Zee learn is a leading educational organization from the Essel Group with strong brands like Kidzee, a pioneer in ECCE (Early Childhood Care and Education). Today, it is the largest preschool chain in Asia with a network of more than 1700+ centers in over 600+ cities. Talking about the success of franchising, Debshankar Mukhopadhyay, CEO, Zee Learn, says, “Most of our franchisees look at expansion in the long term. In fact, some of our edu-preneurs have gone ahead and started a Mount Litera Zee School (Our K-12 brand) over and above Kidzee.” Mount Litera Zee School is now the second largest chain of schools in the private-unaided category with over 100+ schools in 90+ cities.
Celebration Wear Czar
Manyavar began as a thought in 1999 when Ravi Modi reinvented men’s ethnic wear category. The business model for Manyavar is primarily routed through franchisees with a few core company owned stores. It is planning to reach 600th store milestone the franchise way. With their sub-brand Mohey expanding to a 50+ store count. This year also saw the addition of the brand Mebaz, a family celebration wear retail chain for men, women and children. Spread across five cities, Mebaz operates with 17 stores. Ravi Modi, Founder and Chairman, Vedant Fashions, says, “Our goal for 2020 is to have 600 exclusive stores including 100 flagship and 50 global stores in 300 cities.” They are looking to achieve an estimated INR 900+ crore mark for the current year.
Founder of India’s largest fitness chain, Madhukar Talwalkar was not very sure about giving out the franchise of the brand Talwalkars as it was growing rapidly on its own. Around late 90s, Vishwas Shinde, a professional body builder, offered to buy their franchise. They did well and Shinde is currently running seven franchise outlets. However, in early 2000, the brand decided not to go very wide by giving out franchises to too many people. Only recently, the brand is planning to expand through franchise but only with people they are personally acquainted with. Recently, the founder came up with the concept of Talwalkar Hi-Fi – Healthy India and Fit India. This concept was introduced for people who want to associate with them but do not have much capital. This model can be opened at a minimum space of 2,000 sq.ft and can go up to 5,000 sq.ft. The model requires investment in the range of INR 60 lakh to INR 1 crore. Currently, the brand runs 150 company-owned outlets and more than 55 are franchised. Prashant Talwalkar, MD and CEO, Talwalkars Better Value Fitness, says, “Going forward the focus will be on India and international but we will never lose sight of India.” For international foray, the brand took the master franchise of Snap Fitness in 2017. The rights are for six countries including Malaysia, Vietnam, Sri Lanka, Bangladesh and Singapore.
Towards Massive Growth
Modern Indian bistro Farzi Caf? is conceptualized exclusively for gourmet diners. The flagship Indian bistro was first launched at Cyber Hub, Gurgaon in 2014. Currently, the brand has three franchise restaurants operating with 20 more in the pipeline. Zorawar Kalra, Founder and Managing Director, Massive Restaurants, says, “While working closely with the franchise outlets, we realized that a lot of improvements are required for seamless operations of our restaurants. There is a need for the overall sector to be more organised, have effective cold chain and supply chains.” For Massive Restaurants, the current employee count is close to 1200 with the turnover standing at INR 225 crore. The brand recently raised close to INR 160 crore from Gaja Capital, which makes the total investments raised to about INR 220 crore. The company aims to cover the entire length and breadth of India including tier II cities as it feels a lot of its formats are suitable for those markets.
Started in 1962 by Manipal Group’s Ramesh Pai, Kurlon is India’s largest selling mattresses company manufacturing 126 different configurations. Kurlon enjoys 40 per cent market share. In 2018-19, Kurlon plans to target one million retail footprint in India. Sudhakar Pai, Chairman and Managing Director, Kurlon Enterprise, says, “Retail is the new buzz word at Kurlon and experiential shopping is our aim. The outlets have been carefully designed to provide an experience and facilitate customer interactions to educate them about good sleep. The brand stores showcase the best quality and designs, based on our deep understanding of the consumer needs.” The company currently has approximately 2.5 lakh sq. ft. retail spaces and has 700+ exclusive franchise outlets, 7000+ multi-brand outlets and 14 company-owned stores.
Pepper it Up!
Six-year-old Pepperfry is today India’s leading furniture and home products e-commerce marketplace. The brand enjoys the largest online market share with about 62 per cent traffic and high conversion rate. In December 2014, it took the first step towards building the largest omni-channel home and furniture business by launching a firstof-its kind experience centre in the form of Studio Pepperfry. Today, it has 23 studios across major cities. Pepperfry launched its first franchise studio in Bengaluru this year. Unlike any franchise business in the country, its franchise model does not require a partner to hold product inventory and is based on 100 per cent price parity. Talking about the omni-channel strategy, Ashish Shah, Founder and COO, Pepperfry, says, “We plan to establish 48 studios by March 2018 in key cities via a robust franchisee model.” Pepperfry is also developing a big box logistics supply chain with a delivery fleet of more than 400 vehicles operating from 17 hubs across India; the stellar logistics supply chain that serves customers in over 500 cities. It closed 2017 with a topline growth of 30 per cent higher as compared to last year. Its offline studios continue to grow higher as compared to the overall business. In 2017, it launched a new offering – furniture rentals services.
More Than Just Baby Steps
Firstcry.com was built with the vision to solve parents’ shopping woes. Since shoppers exhibit a mixed behavior in terms of purchasing online and offline, the brand needed to offer solutions in both spaces. Today, FirstCry.com has a footprint of 350+ offline stores across the country, all of which are franchised. Amitava Saha, Co-founder and Chief Operating Officer, Firstcry.com, says, “We should be able to cross 500 stores in the next 12 months.” It has raised funding to the tune of just over $100million. FirstCry.com is a 700+ employee company growing between 70-100 per cent year on year. In 2017, it revamped the BabyOye stores and is able to scale these new stores largely through its existing network of franchisees.
The Used Car Master
Mahindra First Choice Wheels (MCFW) started with a thought that a second hand car buyer is not a second class buyer. Talking about expansion, Tarun Nagar, Vice President Retail Business, Mahindra First Choice Wheels, shares, “Franchisee brings a strong entrepreneurial capability to drive business at the local level. While franchise model introduces systems and processes at the channel network, it helps us expand our network nationally.” In 2017, MFCW added an average of 450+ outlets which is about 45 per cent growth year-on-year. Going forward, the physical expansion is also powered by introduction of CV (commercial vehicle exchange platform) and two wheeler segment. It currently has 1600+ outlets spread across 800+ cities and towns and is inching towards 2000+ outlets. With metro cities now being covered, the focus will be to develop tier-II and tier-III markets.
News credit : Entrepreneur