Franchising is a powerful business model that has transformed various industries globally, and the manufacturing sector is no exception. As a manufacturing business owner in India, you might be contemplating the next steps for scaling your operations and expanding your market reach. In 2024, franchising your manufacturing business presents an array of opportunities that can drive growth and success.
A complete Handbook for Manufacturing Business Franchising in India 2024
Here’s a comprehensive guide on considering franchising your manufacturing business in India. But before we get into that let us understand how the Indian market has seen a boost in the manufacturing sector.
How India is Focusing on the Manufacturing Sector
Indian efforts to boost its economy, employment, and standing in the global market centre on the manufacturing sector.. To make India a global manufacturing hub, government initiatives, regulatory reforms, and strategic collaborations have propelled this goal.
India’s manufacturing focus is detailed here:
1. Make in India Initiative
The Make in India project aims to promote manufacturing in India and was launched in 2014 to attract both domestic and multinational firms.. The effort targets 25 industries, including automotive, textiles, electronics, medicines, and defence. By 2025, the objective is to elevate the manufacturing sector’s GDP contribution from 16% to 25%
2. Production-Linked Incentive (PLI) Schemes
The Indian government has implemented various Production-Linked Incentive (PLI) programs to stimulate domestic manufacturing and investment. Companies receive cash incentives for incremental sales and output. PLI schemes cover electronics, medicines, autos, and renewable energy. The goal is to boost Indian product competitiveness abroad.
3. Ease of Doing Business Reforms
India has greatly improved its business environment. To encourage manufacturing investments from outside, the government has simplified regulations, cut red tape, and increased transparency
4. Infrastructure Development
Manufacturing growth requires strong infrastructure. India is building world-class industrial avenues, smart cities, logistics parks, and transportation networks.
5. Skill Development Initiatives
Manufacturing needs competent workers to grow. To teach manufacturing skills, the Indian government has created several skill development initiatives.
6. Foreign Direct Investment (FDI) Policies
To encourage manufacturing investment, India has liberalised its FDI policies. The government has permitted 100% FDI in numerous industrial sectors under the automatic system, thus making it easier for foreign corporations to set up manufacturing operations in India.
7. Research and Development (R&D) and Innovation
Research and development in India promotes industry innovation and technology. The government gives R&D investors tax breaks, grants, and subsidies.
8. Sustainability and Green Manufacturing
Sustainable manufacturing is another aim in India to reduce environmental impact. Policies and incentives encourage industrial companies to use green technologies, energy-efficient processes, and renewable energy. .
9. Public-Private Partnerships (PPPs)
Manufacturing development relies on Public-Private Partnerships (PPPs). To accomplish large-scale manufacturing projects, the Indian government works with private companies to share expertise and resources.
10. Focus on MSMEs
MSMEs drive India’s manufacturing industry. The government supports MSMEs with the Micro Units Development and Refinance Agency (MUDRA) plan, which provides simple funding, and the Udyog Aadhaar Memorandum (UAM) for easier registration.
Trending: The manufacturing sector of India saw growth in July.
Considering these above-listed factors, here’s the takeaway of why business owners should consider franchising their manufacturing business in 2024.
1. Market Expansion and Penetration
Growing demand for domestically manufactured items and government programs like “Make in India” are driving India’s manufacturing sector. Franchising enables you to enter emerging markets without the high capital costs of new facilities.
2. Leverage Local Expertise
One big perk is that you can take advantage of the franchisees’ expertise and local knowledge.. Knowing local market conditions, legislation, and client preferences helps franchisees manage and grow their regions. Localisation can improve market penetration and consumer happiness.
3. Scalable Growth
Scalable expansion is offered by franchising. Franchises replicate a successful model to develop your business without the financial and operational load of expanding on your own. This speeds growth and decreases expansion risks and costs.
4. Reduced Capital Investment
A manufacturing business expansion usually requires significant financial investment in additional premises, equipment, and labour. Franchising lets you grow your firm without draining your resources by shifting a large percentage of this financial responsibility to franchisees. Small and medium-sized businesses wishing to grow without debt may benefit from this concept.
5. Enhanced Brand Recognition
Your brand’s visibility and recognition grow with your franchise network. Your brand’s credibility can be greatly improved by a strong franchise network. Brand loyalty is strengthened by nationwide branding and quality control, which guarantees high-quality products and services.
6. Risk Mitigation
Business expansion risks are spread through franchising. Franchisees spend funds and incur operational risks while you supply the company plan, brand, and support. A risk-sharing strategy can shield your organisation from losses and support growth.
9. Regulatory Support and Incentives
Government regulations and incentives have encouraged manufacturing and entrepreneurship in India. These programs offer tax breaks, subsidies, and loan access to manufacturing businesses that franchise. Franchises can be a better way to scale your business with these advantages.
How A Manufacturing Business Can Be Franchised Efficiently Like F&B and Retail Businesses
Franchising has traditionally been associated with the Food & Beverage (F&B) and retail sectors, but manufacturing businesses can also be franchised efficiently by adopting similar principles and practices tailored to their unique requirements.
Here’s how manufacturing businesses can achieve efficient franchising:
1. Standardize Processes and Operations
Just like F&B and retail franchises, manufacturing franchises need standardized processes and operations to ensure consistency and quality across all units.
2. Develop a Strong Brand Identity
For a franchise to be successful, it needs a strong brand identity. Therefore, Manufacturing businesses can establish a solid reputation by:
- Creating a Unique Selling Proposition (USP): Highlighting what makes your manufacturing products unique and superior to competitors.
- Consistent Branding: Ensuring consistent branding across all franchise units, including logos, packaging, and marketing materials.
- Marketing and Promotion: Supporting franchisees with marketing strategies and campaigns to build brand recognition and attract customers.
3. Provide Comprehensive Training and Support
Successful franchising relies on the success of individual franchise units.
4. Implement a Robust Supply Chain Management System
Efficient supply chain management is critical for manufacturing franchises to ensure a steady flow of raw materials and timely delivery of finished products
5. Leverage Technology and Automation
The efficiency of manufacturing franchises can be substantially improved by technology and automation.
6. Create a Scalable Business Model
Successful franchising necessitates a business model that is scalable. .
7. Ensure Regulatory Compliance
Compliance with local regulations and standards is crucial for manufacturing franchises:
- Licensing and Permits: Assisting franchisees in obtaining the necessary licenses and permits to operate legally.
- Health and Safety Standards: Ensuring all franchise units adhere to health and safety standards to protect employees and customers.
- Environmental Regulations: Implementing sustainable practices to comply with environmental regulations and reduce the ecological footprint of manufacturing operations.
8. Foster Strong Franchisee Relationships
The secret to a prosperous franchise system is establishing solid bonds with franchisees:
- Regular Communication: Maintaining open and regular communication with franchisees to address their concerns and provide updates.
- Franchisee Advisory Councils: Establishing advisory councils to involve franchisees in decision-making processes and gather their input on various aspects of the business.
- Incentives and Recognition: Encouraging and motivating excellence by recognising and honouring high-performing franchisees.
Key Features of Franchising a Manufacturing Business in India
Franchising a manufacturing business in India involves several unique features that distinguish it from other types of franchising, such as those in the F&B and retail sectors. Understanding these key features is crucial for both franchisors and potential franchisees to ensure a successful partnership.
Here are the primary features of franchising a manufacturing business in India:
1. Standardized Production Processes: Standardization is the cornerstone of franchising, and it is particularly critical in the manufacturing sector to ensure consistency and quality across all franchise units.
2. Robust Supply Chain Management: Efficient supply chain management is essential for the smooth operation of manufacturing franchises.
3. Technological Integration: Leveraging technology is vital for the efficiency and competitiveness of manufacturing franchises.
4. Comprehensive Support and Training: Providing continuous support and training to franchisees is critical for the success of the franchise network.
5. Legal and Regulatory Compliance: It is imperative for manufacturing franchises in India to adhere to legal and regulatory requirements.
6. Brand Consistency and Marketing Support: Maintaining brand consistency and providing marketing support are essential for building a strong franchise network.
7. Scalable Business Model: A scalable business model allows for easy replication and growth of the franchise network.
8. Franchisee Recruitment and Training: The achievement of the franchise network is contingent upon the selection of the appropriate franchisees and the provision of the requisite training and support.
9. Financial Management and Support: Effective financial management and support are vital for the sustainability of the franchise network.
Conclusion
Franchising your manufacturing business in India in 2024 offers numerous advantages, from market expansion and reduced capital investment to enhanced brand recognition and access to local expertise.
As the manufacturing sector continues to grow, franchising provides a strategic pathway for scaling your operations, mitigating risks, and achieving sustainable success. Embrace the potential of franchising and take your manufacturing business to new heights in the dynamic Indian market.
