With franchise-related products and services estimated in the hundreds of billions of dollars annually, international demand for franchise brand name products and services is creating huge opportunities for American companies to expand overseas.
India, which has a growing middle-class of over one billion people, is positioned as a major force in the global economy and fertile ground for investment in retail and business development. Statistics from the Franchising Association of India show that, as of 2012, franchising in India was worth at least $13 billion USD and was expected to maintain a growth rate of 30% until 2017. It’s estimated that franchising will account for 4% of India’s GDP by 2017. It is also expected to create jobs for additional 11 million workers in India by 2017.
The industries cited as the top prospects for successful franchise growth in India until 2017, according to research from KPMG include:
- Retail
- Consumer Services
- Food Service
- Jewelry
- Pre-Schools
Many of the world’s largest and well-known franchise companies, such as McDonald's, KFC, Baskin Robbins, Hertz, and Subway already have a visible presence in India. Other companies, from diverse industry sectors, are now gaining a foothold too.
Franchising has a bright future in India due to the convergence of many factors:
- The average Indian income is steadily rising and individuals have more purchasing power.
- Telecommunications and transportation infrastructure improvements facilitate the exchange of information and goods.
- Increasing levels of consumer spending, with greater recognition of brand value.
- Internet access is opening the world to India, making its population more aware of global trends and brands.
- And with greater information exchange via the Internet, it is making it easier for international companies to gain an understanding of India's; culture, geography and politics.
What are some important things to keep in mind when entering the Indian franchise market?
- India has several distinct markets. Consumers in India come from many diverse cultures and socio-economic statuses. There are also many languages spoken in the country.
- There are no specific laws governing the franchisor-franchisee relationship. However, there are many regulations that impact franchise operation.
- In India, there aren’t laws around “anti-bribe” as there are in other countries. The absence of these laws can disrupt the expansion strategy of brands.
To find out more about the Indian franchise industry worldwide, visit our one of our network websites: Franchise Asia: India. There you will find a number of franchises available to be started in India, along with a wide range of research resources on buying a franchise and the industry in general.