Every child is unique and has the power to innovate. techJOYnT, with its head office in Austin Texas, the gamified hands-on learning centers to STEM (science, technology, engineering, and math) education utilizing a proprietary GEAR (game design, electronics, app development, and robotics) learning pathway platform, announced a strategic franchise growth initiative that aims to add new franchise locations in markets across India. The strategic master franchise in India initiative is to empower more children and communities to transform from passive users to passionate innovators than has been previously reached through the company’s unique and proven instructional delivery system.
La Quinta in Spanish means “The fifth”. It can also mean “the country place”. The story of La Quinta started out at San Antonio, Texas in 1968. La Quinta corporation was made the parent company of the subsidiary called La Quinta properties as they grew to be a large chain with a standardized company-owned hotel and franchised hotel with a symbol of LQ. It also grew outside the United States across Canada, Mexico, and Honduras. La Quinta now has its headquarters in Irving, Texas. In January 2006 a merger closed between a private equity firm, Blackstone group and La Quinta properties for $3.4 billion paid by Blackstone group in cash and debt.
In April 2014 LA Quinta holdings inc was listed on the New York stock exchange where they sold shares to the public for the first time.
OYO (Oravel Stays Pvt Ltd) has been adopting various strategies for expansion. But the franchise strategy has found success.
Ritesh Agarwal, CEO of Oravel Stays Pvt ltd launched a website for hotel bookings in 2012. After staying in over 100 Hotels to research the industry, he pivoted his startup to OYO rooms. OYO rooms started with one hotel in Gurgaon in January 2013 and by September 2017 it had around 70000 rooms in 8500 hotels. In 2015, at the age of 21, Ritesh raised $25 million from investors like, sequoia, DSG Consumer Partners, Light speed ventures and San Francisco based Greenoaks Capital.
In December 2017 OYO announced that it will be changing its expansion strategy from hotel aggregator model to the franchising model and all hotels will be shifted to the franchising model. Mr Agarwar said that moving to the franchising model had very less impact on the pricing of the rooms. Due to the shift the company is able to manage, agreements, franchise partners, and hotel inventory more efficiently with fewer hotel staff. OYO has new procedures in place for all franchises, for example, one floor manager assigned for every 100 rooms, simplifying the managers work by data analytics and computers, auditors for checking 30% of hotels every day, etc.
A franchise is an authorization granted to a company or an agency for specified business activity in accordance with the standards set by the franchiser. When a business is expanding as a franchise it is necessary to carefully configure the franchise agreements. The terms and conditions are to be well thought out. All the possible conflicts and should be addressed beforehand. Experts with a foresight into all possible conflicts are the ones who will be able to configure it and there are no better experts in creating a franchise than the franchise consultants at Sparkleminds. Sparkleminds can recognize a profitable franchise beforehand and help companies create brands which they will be able to give as a franchise. The royalties that a business will enjoy by giving out a franchise will increase the value of its shares manifold.
Hoskote is a rural town in Karnataka with less than 60000 inhabitants who mostly depend on agriculture for livelihood. It was low on priority for phone makers, but now it is not so for Xiaomi. Xiaomi’s market share in India has exceeded that of Samsung by 2.4 percentage points within just 3 years of entering the market and it seeks to increase its sales by reaching out to remote areas in India. For growth in India, Xiaomi has taken 3 approaches to supply their products: MI homes, electronic retail chains, and MI preferred partners. Of these three approaches, MI homes are proven to be the best because it has adopted the franchise model for growth and expansion. It is similar to the Apple store franchise where the store is owned by the franchise partner but is operated by the company.
Selling your brand as a franchise can enable your business to realize its full potential. Such a deal can be focused on a particular market alone. Partnerships with the well-established business in a new market can be a great strategy for entry into that market.
A win-win for Eric life sciences and Strides Shasun.
Sashank Sinnha, Managing Director of Strides Shasun said that their focus always has been building a B2B portfolio. Strides Shasun, he said has scaled up its operations in Australia as one of the top two players. As their international operations scaled up, they decided that Strides Shasun in India will achieve its full potential under an India focused company.
The right time to consider an exit strategy is when your business is developing. The best value for your brand is realized when you start franchising development with exit strategies in mind. There is a significant investor interest in the franchise industry. Beginning from 2010 dozens of mergers and acquisitions franchising transactions have closed and the trend is increasing. Private equity groups have more than 800 billion in cash and strategic buyers have more than 4 trillion to invest. It creates a potential demand driving prices to rise. Small business financing may be problematic at times but the availability of bank financing for large acquisitions enables private equity firms to use leverage while paying high prices for best quality franchisors.
Havmor is an ice cream shop that started in 1994 in Karachi. It moved to Ahmedabad within 3 years following the partition of India. A large number of ice cream shop owners and small entrepreneurs tied up with Havmor as franchisees. It grew to be a prominent brand with more than 40000 outlets across India by 2016. The brand has been growing at a CGAR of 23-25%. It had a turnover of about 250 crores in 2012 and its turnover was about 450 crores during FY 2015-16. In 2016 Havmor had expected its sales to double by 2020. It had aimed to increase its sales to 1000 crores.
The franchise industry in India is growing by 35% every year with close to 5000 new brands adopting the franchising model. International franchisors prefer to appoint a master franchisee and the local franchisors usually do direct franchising. It is necessary to understand the parties’ rights and obligations carefully while entering into a franchise agreement. Hence if you are a brand looking for a franchise agreement format india, then you must make sure that it is done through the experts and with professional help.
It is believed that India’s Small and Medium Enterprises (SMEs) would spearhead the country’s push towards its goal of creating an economy worth $5 trillion. The Indian government has set the stage for a SME-driven development narrative with strong programs including Make in India, Startup India, Digital India, and the Pradhan Mantri Mudra Yojana. One business model, though, really seems to be a true acceleration: franchising for SME.
Why An Indian SME Needs Franchising to Grow
Franchising provides a capital-light, scalable option for SMEs to develop throughout India’s different marketplaces, taking use of evolving technology, logistics, and infrastructure. Many of the places you frequent, such as the grocery store, fast food joints, preschools, and diagnostic labs, are actually franchises.
To further understand how franchising is impacting SMEs, let’s analyse:
1. A Quick Way to Get Funds
Obtaining capital to expand is a common struggle for SMEs. High interest rates and equity dilution are two drawbacks of traditional loans.
Small and medium-sized enterprises (SMEs) might avoid taking out loans or investing in new equipment by leveraging the cash of franchisees. Everybody wins when franchisees put money into the brand, run their own business, and keep a portion of the earnings.
2. Affordable Talent Acquisition
Small enterprises may find it difficult and expensive to hire excellent talent.. Franchising eliminates this problem by forming partnerships with ambitious local business owners who care deeply about the franchise’s success.
A dedicated operator is fundamentally acquired by you, who:
Familiar with regional marketplace
Communicates your goals
works without a regular pay cheque but reaps rewards for their efforts
3. Breathtaking Market Penetration
The cultural variety and varied topography of India make direct growth difficult and expensive.. SMEs can::
Speedily expand into new markets
Draw on knowledge from the area
Raise awareness of your brand in each area
Whether they’re based in a Tier 1 city or a growing Tier 3 town, franchise partners provide a mechanism for SMEs to scale that traditional models just can’t.
4. Embracing Local Input for Innovation
The practical knowledge and experience of franchisees can be a great source of inspiration for new ideas. This feedback loop allows for, among other things, menu customisation and the creation of region-specific offers:
Faster R&D
Rapid response to regional requirements
Goods and services that are more pertinent
5. Consistency and extensibility
Strong operational systems are enforced by franchising. Process documentation, training manuals, and performance metrics should all be produced by SMEs.
The end outcome is:
Reliable service for customers
Brand credibility enhanced
A springboard for expanding one’s brand from the regional to the national and international levels
2025-The Opportunity for Small and Medium Enterprises to Franchise in India
There is a great opportunity for franchise growth in India’s consumption-driven industry and the country’s more than 63 million SMEs. Franchising is a great way to capitalise on the recent upsurge in entrepreneurship, improvements to digital infrastructure, and economic formalisation that have followed the epidemic.
Can Your Small or Medium-Sized Enterprise Benefit from Franchising?
Franchising could be the answer for business owners who are seeking to grow their companies without giving up control or going bankrupt.
It provides:
Growth that is both sustainable and rapid
Splitting the cost and benefit
Access to more talent pools and markets
In conclusion,
Franchises aren’t reserved for well-known companies anymore. Small and medium-sized enterprises (SMEs) in many fields are adopting this strategy for more efficient and rapid growth.
Curious about the possibility of franchising your business? Get in touch with Sparkleminds now to create a unique franchise plan and take advantage of India’s thriving SME market.
FAQs
Q.1. In what ways may franchising motivate expansion among India’s SMEs?
Small and medium-sized enterprises (SMEs) can use the resources and talents of franchisees to expand without making big financial commitments through franchising. Businesses can scale quicker, expand into new areas, and lower operational risk with this tool, all while keeping control of their brand.
Q.2. When it comes to small enterprises (SME), what are the advantages of the franchising model?
Prominent advantages consist of:
Easy access to funds for growth without taking out a loan
Talented locals focused on performance
Increased market share
Innovation at the local level facilitated by franchisee input
Consistent branding and standardised processes
Q.3. Can all small and medium-sized enterprises (SME) benefit from franchising?
The majority of small and medium-sized enterprises (SMEs) in industries such as food and beverage, education, retail, healthcare, and services can apply a franchising model. Having a defined system, a strong brand prospective, and a replicable business plan are the most important things.
Q.4. How can I convert my SME into an Indian franchise via franchising?
Create a franchise blueprint starting with your operations guide legal documents, brand standards, training assistance, and marketing systems. See franchise development professionals such as Sparkleminds to help you along the way.
