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Entry India, LLC www.entryindia.com
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Franchising Business in India
Entry India, LLCinfo@entryindia.com
Entry India, LLC www.entryindia.com
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Target Audience
Small & Medium Enterprises (SMEs) Start ups, and Non-Resident Indians (NRIs)
Who want to
Expand their business into India Start a new business in India Profit from opportunities in India
Entry India, LLC www.entryindia.com
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Business, Economic and Social Environment Markets & Growth Prospects Legal and Regulatory Framework Special Incentives
What investors consider -1
Entry India, LLC www.entryindia.com
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Fluidity of capital Flexibility of the labor pool Government receptivity to business Information communication technologies Private sector development infrastructure Legal systems to protect intellectual property rights Available scientific and human capital Cultural propensity to encourage creativity.
What investors considerSpecifics
Entry India, LLC www.entryindia.com
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India Rising Most attractive socio-economic & business fundamentals Market least affected by the global recession World’s largest democracy: 1.2 billion population 100 million middle class in 2009 -> 580 million by 2025 ***** World’s 4th largest economy Largest English speaking nation in the world
Entry India, LLC www.entryindia.com
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India Investment Options Large potential in retail, infra-structure,
healthcare, education …… Invest in Stocks, Bonds, Real Estate …. Start or expand your existing business to
India
Entry India, LLC www.entryindia.com
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India Investment Options-2 If you have a business and want to expand it
to India, consider becoming a Franchisor
If you want to start a new business, consider becoming a Franchisee
NRIs instead of regularly sending money to your family in India, start a franchise for them
Entry India, LLC www.entryindia.com
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Why Franchise in India Franchising is Big Business Globally
Over a million franchised outlets with sales of 2-3 trillion dollars The United States of America is at the forefront of the franchise boom
40 % of retail sale revenues are from franchising 50,000 Malls, 40,000 Supermarkets
Franchising has a Huge Growth ahead in India Relatively New Concept for India Around 1,200 Franchisors in the country (200 are foreign) More than 100,000 franchisees Current market size in India: $10 billion $20 billion by 2013 (30 % Growth Rate) 2% of the total Retail Sales 300 Malls, 1500 Supermarkets
Franchising infrastructure is in place in India
Entry India, LLC www.entryindia.com
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Premier Franchising Resources
International Franchising Association (IFA) http://www.franchise.org/IFA represents all aspects of the franchise community and works to
protect, enhance and promote franchising.
The Franchising Association of India http://www.fai.co.in/Provides a one-stop shopping experience for franchising business
Entry India, LLC www.entryindia.com
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Franchising Defined
Franchising is a method of doing business wherein a franchiser licenses brand, product and proven methods of doing business to a franchisee in exchange for a recurring payment. Various types of support are made available continuously by the franchiser to enable the franchisee to compete and grow.
Entry India, LLC www.entryindia.com
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Franchisee Advantages
Franchising Reduces Business Risks 90% of start-ups fail in the first year. In a franchised
business, over 90% succeed. Proven business model, recognized brand, customer
acceptance Established methods and quality Pre-opening (site selection, financing etc) and operational
assistance: staff, training, advertising Wider market penetration Relatively low capital investment
Entry India, LLC www.entryindia.com
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Franchisee Issuesin India
Some Loss of entrepreneurship loss of independence in doing and developing business, in
pricing, in new product introduction, in hiring etc. Legal and disclosure framework for franchises is not in
place Real estate markets are somewhat unstructured and
unrealistic, making it difficult for start-up ventures to invest. A franchisor’s problem may become your problem
Entry India, LLC www.entryindia.com
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Franchisor Advantages
The franchisor gets easier access to capital for rapid growth
The franchisor leverages the franchisee’s knowledge of the domestic market & regulations
Franchisees are far more motivated to maximize sales and profits than salaried branch managers.
Franchisees are an important source of new marketing and product concepts
Entry India, LLC www.entryindia.com
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Franchisor Issues
Liability of Parties UncertainNo Franchise specific legislation: the liability of either party is determined by the agreements between them or on the basis of general applicable laws
Possible loss of direct operational control Possible loss of Intellectual Property
Entry India, LLC www.entryindia.com
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Franchisee Plan
Research Get Reports Attend tradeshows Evaluate strength of the franchisor Talk with existing Franchisees Work in an existing operation Get professional help in navigating through the paper
trail and due diligence Write a business plan
Entry India, LLC www.entryindia.com
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Franchisor PlanPhase 1
Market Research Entry Strategy Legal &
Disclosure documents
Growth Strategy Business Plan
Phase 2Roll out planLocating the right partnerGovt. clearances and approvalsValuations and Negotiations
Phase 3Support ActivitiesAudits & controlsRoad map for franchise expansion
Entry India, LLC www.entryindia.com
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Growth Sectors in India
Retail, Telecom, Education, Healthcare are fastest growing
Automotive, IT, Beauty, Tourism are fast catching up
Entry India, LLC www.entryindia.com
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Example Education Franchising India
India is one of the largest markets for education in the world in terms of number of students.
Current Situation 400 active education franchisee owners in India. Informal and supplementary education has the lion’s share of
education franchising. Professional and vocational skills (Aviation, Hospitality, Hotel
Management, Finishing School, Retail Training, Financial Services, and Insurance are the most franchised followed by IT training.
NIIT, Aptech in IT education, Oxford and Cambridge in vocational learning, Hughes network for management etc.
Demand-supply mismatch for quality schooling 270 million students by 2020 They will need schools, teachers, training, jobs, housing,
entertainment…….
Entry India, LLC www.entryindia.com
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Best Way to find Partnersfor US based companies
US Department Of CommerceGolden Key Service
buyusa.gov/india Appointments with pre-screened partners Profile on each Indian company/partner Post meeting de-briefing Available in New Delhi, Mumbai, Chennai, Calcutta,
Bangalore, Ahmedabad, and Hyderabad. Payment SME: $700; Large: $2,300
Entry India, LLC www.entryindia.com
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Notwithstanding the current economic slowdown and certain regulatory issues, the franchising market (specially healthcare and education) has enough reasons to remain upbeat about its future in India.
To succeed Prepare thoroughly Focus on Establishing Solid Local Partnerships Get a legal firm and a CPA who have worked with foreign
businesses
Track Progress, Enjoy Profit
Summary
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