Much has been said about the many benefits that franchising a retail business brings to the owner. But what of the franchisee? What are his compelling reasons to be a partner? There are many pitfalls for a franchisee. The franchisor could place restrictions on how one runs the business and not allow a franchisee to make changes to suit a local demographic.
When, we talk about India, even though retail is enjoying the status of a sunrise industry, franchising systems are still not in place to safeguard the interests of either party or the brand itself. According to retail industry veterans, franchising should be considered only when a brand has sound processes and systems, which can be replicated elsewhere. Also, a brand must master the business before it ventures into seeking franchisees.
Hence, it’s extremely critical to lay out control mechanisms and standard operating procedures before taking the franchising route. A strict set of do’s and don’ts need to exist and be audited continuously.
In the January issue of IMAGES Retail, we have tried to empirically study the viability of franchising in retail sector and what is the future franchising model in India. What kind of cautionary measures should be taken by both franchisor and franchisee before getting into the alliance.
In this cover story, we have analysed that franchising in India still has a long way to go. For the model to continue its growth run, the many stumbling blocks need to be removed. Also, we need to analyse that is there a large enough pool of capable and committed franchisors to take India’s retail story forward?
At IMAGES Retail, we got the feedbacks of many retailers and analysts on the aspect of franchising and the point everyone zeroed down upon is that to up the ante in retail franchising the focus should be more on transparency and trust between the franchise partners.