Sify:
Industry figures indicate that as much as 90% of all self-started small businesses in India have floundered over the past ten years. By contrast, 85% of businesses based on the franchisee-model have been successful.
Although this system is relatively new in the country, industry insiders say it has so far proven to be a beneficial starting point for new entrepreneurs.
“People may have ideas as well as money, but without a strong model, businesses are likely to fail when faced with cut-throat competition. A franchise is an attempt to organise an unorganised industry. Though the concept of franchising is new in India compared with the West, it has proved as an important model for any industry - at least for new entrepreneurs, or initiators,” said CEO, Franchise India Holding Ltd (FIHL), Sachin Marya. “Transparency and trust are essential factors for any franchise. So, as much as 85% of franchises in India have been successful, while 90% of individual businesses have failed,” he explained.
“In the Indian model, franchises break even after about 12-18 months. This is quite impressive, compared with other business models,” Marya added.
Globally, the franchise model is most popular in sectors such as education and training, financial services, apparel, and retail.
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