There are over 15 million retail outlets spread across India, stamping the country with the epithet â€œShopkeepersâ€™ Nationâ€™â€™. More than 80% of these 15 million outlets are run as small family businesses. Indiaâ€™s largest numbers of small businesses are in the business of retail. The striking feature of todayâ€™s Indian retail scene is the duality which has lately emerged forming the basis of modern ad traditional retail in India. However, small traders, comprised of traditional retail have conspicuous presence controlling 96% chunk of the retail sector and the ingress of large corporate and foreign retailers has made them occupy 4% of retail segment introducing modern retail in the Indian market. Corporate retailers, however, plan to augment the share of modern retail from the current 4% to approximately 15%-20% in the next four years by investing more than US $ 25 billion. To say that small businesses will not be affected by modern retail would mean being oblivious to ground realities. While small business is under threat and government is making supreme efforts for supporting the cause of small business through strict FDI decisions and averting rapid spread of corporate retailers. However it needs to be recognized that given a choice Indian consumers, who are hard pressed for time today will prefer to go the marketplace which offers them best discount, finest ambience and utmost convenience. Also, the fact is that small businesses have some inherent advantages and will not get wiped out by modern retailing or external environment because of some innate strength. Modern retail has its own set of dilemmas: Running multiple company operated stores through managers often sizes up the organizational scale when the unit stores are often seeing red. Further modern retailers have to acquire escalated real estate infrastructure, a traditional retailer sits strong on his well negotiated lease. It is entirely indubitable that small businesses can only go down because of their own unwillingness to innovate survive and flourish.
Franchising In India:
The premise of this joint collaboration lies in combining the built-in customization passed to customers by traditional retail and the huge buying power and thereby low prices forwarded to customers by large modern retail. These strengths can form the basis of strong corporate partnerships which can come to happen through FRANCHISING. Upgrading of small business is certainly possible through Franchising which is the only most powerful device to make it will happen. Franchising endeavors to create a powerful ecosystem to form Partnership on the foundation of mutual trust between corporate and small businesses, each contributing in different spheres combined with ample doses of innovation.
Globally, franchising is the greatest contribution in organizing and uplifting small businesses through business partnerships. In US alone there are over nine lakh franchised outlets with sales exceeding US$ 1.5 trillion. In India, the industry is a little over US $ 2 billion. This huge gap indicates hat there is unlimited potential for small business ownership to grow in India through franchising. In the US, almost a third of the retail sales come from franchised business as 50% of retail is franchised there. Retailing franchising becomes most viable solution; already 25 prominent retail industries are using franchising as their business development tool.
Franchise India 2007 is also organized to act as a catalyst for building a foundation of success for future business by fostering corporate partnerships for creation of wealth in small business segment and creating an extensive network of small businesses the back bone of growing economy.
Franchising happens when someone develops a proven business concept and transfers the trademark and business know how to an entrepreneur termed franchisee. The franchisee usually gets the rights for specific time period and in a specific geographic area for one time fee & royalty.
An Investor should always investigate, evaluate and negotiate (in that very order) before they invest in a franchise opportunity. They should also invest in information before making an informed decision.