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Mumbai, May 22 Real estate bottlenecks have led the Rs 637-crore Trent Ltd to explore the franchisee model as it expands its Westside stores to tier 2 and tier 3 cities.

Having appointed its first franchisee in Mysore last year, the retailer is now poised to add 25 to 30 Westside stores in the next five years as it expands to smaller cities such as Allahabad, Patna, Guwahati, and Puducherry.

At a press conference, Ms Neeti Chopra, Head-Marketing, Trent, said, “We want to get over the property challenge and franchisees would help us in scaling up the business in the smaller cities. We expect each franchise to generate revenues between Rs 6 to Rs 10 crore for each store with an initial investment of Rs 1.5-2 crore.”

With a revenue-sharing arrangement, Trent is currently in the process of appointing franchises who can “adhere to the Tata code of conduct.”

“In fact Trent is the first retailer to adopt the franchise route considering other apparel oriented retailers such as Shoppers Stop and Lifestyle are yet to do it. Trent has the advantage of having its private labels whereby it can command greater revenues and profits by having a franchise partner unlike the other retailers,” says an analyst.

The company would help the franchisees in training and recruiting staff, marketing and promotional support, and replenishment of stock and project assistance for the store fit out.

Outlining the profile of a prospective franchisee, Ms Chopra added, “We would like to partner individuals who can give us local inputs and help leverage the local business.

It could be individuals who are already franchises for others and somebody who has high understanding of that particular city. The merchandise would be provided and owned by us on a consignment basis.”

In fact the company’s first franchisee in Mysore is already serving as a franchisee for Honda Motors and Tata Indicom. Currently, Trent has 30 Westside stores in 19 cities.

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