The Indian food processing industry accounts for 32 per cent of the country’s total food market, one of the largest industries in India and is ranked fifth in terms of production, consumption, export and expected growth.
It contributes around 14 per cent of manufacturing Gross Domestic Product (GDP), 13 per cent of India’s exports and six per cent of total industrial investment. Indian food service industry is expected to reach US$ 78 billion by 2018.The Indian gourmet food market is currently valued at US$ 1.3 billion and is growing at a Compound Annual Growth Rate (CAGR) of 20 per cent. India's organic food market is expected to increase by three times by 2020.
Restaurant business has today become very exciting space to be. From experienced people to start ups all are drenching themselves in this business. Seeing the global ratio of franchising where almost all top brands are franchised and are successfully growing in various countries have given a room to Indian brands to look at the same model. When one looks at opening a restaurant especially in a diverse market like India they need to get their training right, SOPs right, get a lot of technical people on board to be able to assist them and set up systems, it comes with huge cost.
Here, the question arises that why would you franchise as a restaurant owner? Why can’t you do it by yourself? First of all, capital is a gigantic worriment. As every entrepreneur understands that how difficult it is to raise money, open different outlets and get employees work under you and pay them. Therefore, the biggest advantage in franchising is that you’re expanding your brand, selling your products, generating revenue without even putting your own money. Of course you need to invest in the basics as in the platform of franchise model but you’re not putting your money into reach out to more outlets. Secondly when franchise invests their money to open an outlet of your brand in other area than franchise would be more active and involved to raise the business than even your manager.
Generates Meaningful Communication
“A franchise of a business creates a distinctive hold in the market. It helps in reaching out to more people thus generating a meaningful communication with the customer reach. It helps in establishing a position and maintaining a consistent presence in the market”, says Pariekshit Madishetty, MD, Grid Logic Hotels and Resorts. Hence, reinforcing and effectively building the brand. We usually look for a local partner who has passion for this business and willing to be a part with investment, he adds further.
The moment one realises that he has a unique product which is dependent on art and will turn into science; it is easy to leverage those products in newer market via franchise. And it is not difficult to get the consumers in because they are going to get something which is much diverged.