RETAIL FRANCHISEE

Agend a

Concept of Franchising  Evolution of Franchising  Types of Franchising  Advantages & Disadvantages of Franchising  Franchising in India

Concept of Franchising
A franchise is the agreement or license between

two legally independent parties which gives:


 The trademark of another business.

 Operating methods of the franchisor.  Obligation to pay the fee for these rights.  Obligation to provide rights and support to franchisees.

Concept of Franchising

Evolution of Franchising
“franchise” derived from liberty.  Franchising has promoted economic liberation,

synergy, and opportunity.

 The desire to expand and control.  Limitations on human and financial capital.  The need to overcome great distances.

Early Franchise Entrants

1898 - Automobile Manufacturers Division of responsibilities:
 

- manufacturers - design & production - dealers: sales & service

Coca Cola Company

1886 : coca-cola invented 1899 : Thomas & Whitehead 600-word

promised to open a bottling plant • 1901 : no capital to open the bottling plant …? • 1919 : 1,000 franchised Coca-Cola bottlers

contract

Gas Stations

1930’s - Depression Era Franchising First example of Conversion Franchising Taxation of all company-owned gas

stations Why pay that? …. let’s FRANCHISE Also quicker local response to price

Fast Food Fifties

Harlin Sanders - gas station closed pumps: 142 seat

restaurant 1950’s: turned down $164,000 1960 (200) 1980 (6,000) 2007: 13,433 KFC’s world-wide

• San Bernardino, CA 1940 • Dick & Mac McDonald • inspired by Henry Ford’s assembly line • Ray Kroc - multi-mixer salesman • world’s largest chain of FF

1960’s, 1970’s, 1980’s, 1990’s

Franchising Timeline
Kings, Courts and Lord – Franchising

Pre-1800.

 Drinks, Cars and Sewing Machines

--1800 to 1900.

 A Period of Steady Growth – 1901 to

1950.

Franchising Timeline…
 Build Along the Highway – 1951-1969.  New Regulation and an Oil Embargo –

1970 to 1985.

 The Current Status and Reasons for New

Growth – 1996 to the Present

  

Types of Franchising
Business to Business service.  Retail Franchise.  Investment Franchise.  Management Franchise.

Types ……
Single operator Franchise.  Executive Franchise.  Sales and Distribution Franchise.  

Advantages of Franchising
Branding.  Advertising.  Name Recognition.  Reputation.  Support.

Advantages ….
Expansion .  Legal considerations.  Operational Considerations.  Bulk purchasing power. 

Disadvantages of Franchising
Their way or the Highway.  Ongoing costs  Ongoing support.  Cost 

Disadvantages……
Price  Conflicts  Control  Shark - Infested waters.  

Franchising in India
   

VIBRANT ECONOMY
GDP GROWTH RATE OF OVER 8% OVER LAST THREE YEARS.

   

AIMING FOR A FURTHER RISE IN GDP. a.

 

CONTINUING PROCESS OF SUSTAINABLE REFORMS TO LIBERALIZE ECONOMY . a.

CHANGING INDIAN LIFESTYLE

LARGE & INCREASING CONSUMER BASE WITH DISPOSABLE INCOME.

             

RAPIDLY INCREASING INDIAN MIDDLE CLASS SEGMENT WITH GOOD PER CAPITA INCOME & PURCHASING POWER.

RAPIDLY INCREASING DEMAND FOR BRANDED & IMPORTED PRODUCTS & SERVICES.

REDUCTION IN INTEREST RATES BY BANKS.

IMPLICATION OF VAT (VALUE ADDED TAXATION).

RECENT POSITIVE FACTORS

 

RAPIDLY GROWING ORGANIZED RETAIL. 

   

51% FDI IN SINGLE BRAND RETAIL.

LARGE CONSUMER BASE.

Franchising current scenario
 While Franchising has been growing rapidly over the last 4-5

years , it is now at a take off stage. Currently Franchising accounts for just over 4% of the country’s gross domestic product, Franchising is a sector that is waiting to happen.

 Industries such as clothing, footwear, computer education,

F&B, healthcare, entertainment, beauty, fashion & fitness, distribution, automotive and many more have already found their presence in the Indian Franchise arena. there are more than 750 Franchise system operating in India, which includes both national & International Franchisors. today.

 Currently

 There are over 50,000 franchisees (across sectors) in India

 The Franchise industry has been growing at a rapid pace of

Annual Turnover from Franchising
Annual Turnover from Franchising
50 - 100 crores - 500 crores 100 4% 5% 20 - 50 crores 11% Les s than 5 crores 54% More than 500 crores 2%

5 - 20 crores 24%

AND DON'T FORGET…

… d in o sa u rs so m e tim e s

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