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Bindu D. Menon

New Delhi, April 9 Food retailing in India is finding its recipe for success in franchising. While companies are looking for partners who can invest and help in branding, they feel that there is a need to sift the committed entrepreneur from wannabes to get the best out of the franchising model.

“The promise that franchising holds still remains to be exploited. There are many issues on this front; individual franchisees are found wanting in commitment towards the business as they are too focused on short-term returns, which hurts the brand in the long-term. The commitment has to be 100 per cent and you cannot treat the franchise business as another business in the portfolio,” said a spokesperson of McDonald’s India (North & East).

There was an urgent need to impart more education on the franchising model, the spokesperson said, adding “the initial expansion has to come through ownership and management models”.

According to a report by the Confederation of Indian Food and Trade Industry (CIFTI) and Franchise India, currently, the food and beverage industry in India is around Rs 58,000 crore and is growing at a rate of 40 per cent per annum.

The market is estimated to reach Rs 60,000 crore by 2010. The food service sector in India consists of approximately two million licensed and unlicensed restaurants, of this only about 30,000 are registered.

Fine dine restaurants followed by quick serve restaurants are the most franchised food segments in India.

The Café and Juice bar culture is also on the rise because of the younger population. Casual eating from kiosks has also increased following the rise in mall culture.

“In Bangkok, on an average, people eat out about 44 times a month and about 14-15 times in Jakarta compared to about six times in Mumbai. This spells a clear opportunity in India. The main growth driver of the industry would be the 440-million strong middle class which, on an average, consumes three meals per day, that is a staggering 1,000 millions meals,” said Mr Sanjay Khajuria, President, CIFTI, and VP, Corporate Affairs, Nestle India.

According to the report, more than 30 per cent of the new food outlets coming up in almost all cities across the country are through franchising.

“Ultimately it is the consumer who stands to benefit from the growing franchising trend. Food franchising is a challenge which is maturing over time in India.

“Though in slowdown times, it is difficult to find people who can invest, we are continuing to move towards regional franchise partners,” said Mr Samir Kuckreja, Managing Director, Nirula’s.

More Stories on : Channels and Franchises | Foods & Food Processing

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