Building The Best Hospital Franchise in India

Healthcare has become one of India’s largest sectors, both in terms of revenue and employment. Healthcare comprises hospitals, medical devices, clinical trials, outsourcing, telemedicine, medical tourism, health insurance, and medical equipment. The Indian healthcare sector is growing at a brisk pace due to strengthening coverage, services, and increasing expenditure by public and private players. The hospital franchise in India is on a very momentum.

Indian healthcare delivery system is categorized into two major components: public and private. The Government, i.e., the public healthcare system, comprises limited secondary and tertiary care institutions in key cities and focuses on providing basic healthcare facilities in the form of primary healthcare centres(PHCs) in rural areas. The private sector provides a majority of secondary, tertiary, and quaternary care institutions with a major concentration in metros and tier I and tier-II cities.

Market Size

The healthcare market can increase three-fold to Rs. 8.6 trillion (US$ 133.44 billion) by 2022. In Budget 2021, India’s public expenditure on healthcare stood at 1.2% as a percentage of the GDP. A growing middle-class, coupled with a rising burden of new diseases, is boosting the demand for health insurance coverage. With the increasing demand for affordable and quality healthcare, penetration of health insurance is poised to expand in the coming years. In FY21, gross written premiums in the health segment grew

to Rs. 58,584.36 crore (US$ 8.00 billion). The health segment has a 29.5% share in the total gross written premiums earned in the country.

Hospital franchise opportunity in India

The need and growth of the healthcare industry can be seen during the Covid-19 times as the requirement of hospitals was way more than the available hospitals and the demand of the distressed people could not be fulfilled by the existing hospitals. The size of the healthcare industry in our country is just 5% of the Gross Domestic Product (GDP) as compared to other countries. A study conducted by a leading global consulting firm reveals that a significant part of the household income is spent on health care.

The healthcare industry in India will be expected to cross Rs.1000 billion in the coming three years. The medical industry is a good prospect for business in India as the profit margin is quite high. India is the largest supplier of medicines globally, occupying a 20 percent share in the global market. India is the source of more than 60,000 general brands and 60 holistic and therapeutic categories.

In India, franchising today is one of the best business models which have been adopted by some of the most companies. The Hospital Groups are swiftly emerging as India’s largest healthcare chain, and it applies the concept of franchising to healthcare. The primary objective of hospitals is to bring healthcare of international standards within reach of every individual in India. To achieve this, hospital franchising is the best option. Hospitals with multi-specialty clinics which offer facilities for Specialist Consultation, Preventive Health Checks, Diagnostics, and 24-hour Pharmacy are a tick on the checklist before going for a hospital franchise in India. Consequently, most health care services are under one roof

The clinic will be an independent entity and will focus on primary health care but Hospitals mainly focus on secondary and tertiary care facilities. Hospitals would create synergy concerning referrals. Customers search for high-end diagnostics as well as tertiary care which they believe can be provided to them by renowned hospitals. The franchisor supports the franchisee (entrepreneur) with its name and also vast business knowledge. As a result, the entrepreneur will have the satisfaction of running his own business with the support of a well-known large healthcare organization.

The Business franchise model

A company set itself by having some risk of opening a new location to the franchisees who operate in that location. They work along with it because of the profit potential as they stand together to share the profits. However, franchising is not a sure-shot formula for success and requires proper strategies to take it to the next level. To make it a sound investment, one must understand the scenario to be an ideal franchise and can take help from reputed franchise consultation firms. The right franchisee gives the brand market insights and a deeper understanding of what will and won’t work in that particular region.

Now, if we talk about the hospital franchise agreement, it includes the legal rights to establish a franchised outlet and operation of the business expansion model; among other things, obtains the license and right to utilize the franchisors trademarks, trade dress, business systems, operations manual and sources of supply in offering and selling the products and/or services designated by the franchisor.

The Hospital Franchise agreement will also define the initial fees to be paid by the franchisee to the franchisor. The hospital franchise agreement will mandate and define whether or not the franchisee is required to pay any marketing fees to the franchisor. The most common marketing fee charged by franchisors is typically referred to as a “brand development fund” to which a franchisee will contribute. The franchise agreement will establish whether or not a franchisee must contribute to a brand development fund and other obligations which the franchisee must satisfy regarding the franchisee’s local marketing efforts.

Advantages of Hospital Franchise Agreements:

1. Being a legally valid document, it binds all the parties altogether.

2. Helps in enforcing the obligations set out in the agreement in a mutually agreeable way.

3. They offer to enforce the terms of the contract without any misunderstandings that lead to a longstanding relationship between the parties.

4. enables them to avoid complex and costly litigations in case of a dispute.

5. Serves as legally valid evidence, since the terms and conditions are meticulously drafted and agreed upon beforehand.

TOP FRANCHISING HOSPITALS IN INDIA

• APOLLO CLINIC

Founded in: 2002

Franchising since: 2003

Apollo Health and Lifestyle (AHLL) were founded with the aim “to bring healthcare of international standards within the reach of every individual.” Each of Apollo Clinics is committed to providing consistently superior quality health care services to address the day-to-day health care needs of the family.

• FORTIS HOSPITAL

Founded: 1996

Franchising since: 1996

Fortis Healthcare is committed to providing a first-class scientific approach to medicine. FHL provides an educational program that emphasizes the development of excellence in the clinical skills required for good medical practice. The Fortis IVF centre arranges an Infertility medicine team that specializes in treating unexplained infertility and endometriosis.

• MAX HOSPITAL

Founded: 2000

Franchising since: 2001

Max Healthcare Institute Limited (“Max Healthcare”) is one of India’s largest healthcare organizations. They create a responsive healing environment, by being nimble to the needs of our patients and delivering what they really need with precision and timing. They are focused yet fast, personal yet practical, advanced yet seamless in delivering the exact care our patients need.

Conclusion

Hospital franchising is a financing and delivery system modeled after the very successful franchising schemes in the hospital industry. It involves a franchisor developing a brand of high-quality products, offering the right to use the brand plus all its associated business operating routines including training, to franchisees (individual investors) who are assisted in setting up their clinic practices along the same lines as the franchisor (brand name, signage, and colour scheme, menu of pharmaceutical products, and pricing and marketing) for which they pay a fee periodically.

With decreasing environmental conditions and an increase in the number of diseases in India, the people of the country have become more and more conscious when it comes to their health. India offers vast opportunities for franchisors, all because of the growing entrepreneurial skills in its people. According to estimates, almost 35% of franchise buyers are amateur entrepreneurs in business. While earlier franchising was mainly done by people who were already doing some business, franchise opportunities currently act as a gateway for first-time entrepreneurs.

Thus, the demand for quality medical services is constantly increasing giving many favorable opportunities for the development of medical franchise companies. The health care system in India is universal which means that there are low-cost as well as more expensive top-tier quality medical services in the country. India has always been a popular destination for medical tourists, as it offers quite affordable high-quality services in private hospitals. So, if you are thinking of franchising a hospital in these times, it’s the best time you can think of a hospital frnachise in India.