Franchise Business Opportunities

• Role of malls in Business volume

A shopping mall is a carefully landscaped complex of shops representing merchandisers, with interconnecting walkways enabling visitors to easily walk from unit to unit, usually includes restaurants and a convenient parking area. We can say that it is a modern version of the traditional marketplace and a modern method of attracting consumers.
As consumers of today want a better shopping experience including some who come just for window- shopping and to enjoy the ambience, the foot fall in a mall is usually high. In carrying out the Franchise business, one of the factors of profitability is the high customer traffic which the malls readily provide.

Though the mall space is usually very costly, franchises feel that it is worthy to put up an outlet in a high traffic mall as it may do a justice to the Brand name. It also serves as a good merchandising option as the location is viable. There is also a sure possibility of cross selling as people come for buying something, end up buying some other more. However, we can not assume that a high foot fall means increased sales.

As India is undergoing a retail franchise revolution and the commercial space market is hot, there is a growth of malls which can cater to the expanding retail franchise market, which in turn help the franchise market thriving. This in turn provides employment for skilled and unskilled retail manpower in a large scale.

As Indian malls provide house for medium to high range of products, they attract large number of people of various statuses.

• Tier matters
Franchises get benefitted more by being located in malls of Tier 2 / Tier 3 cities than in that of metros. In metros, prominent brands can attract crowd even by operating in their own lavishly displayed showrooms but in Tier 2 / Tier 3 cities, they prefer the route of franchise depending on the franchise partner’s grip over the local market as they better know the pulse.

• High real estate prices – a real concern
Real estate price becomes a challenge to the profitability of the franchise when the retailers choose a nonviable mall. Retailers should be well informed about the viability of the location and demography so that they can position themselves in suitable malls. Here comes the effective role of the regional Franchise Consultants. “Future Inside” powered by V 4 EDGE Franchise Solutions Pvt. Ltd., plays a vital role in this account with their consultants net work in cities of Tamil Nadu and Kerala.

• Betterments suggested
There should be ample distance between malls for their comfortable coexistence. Also they should be properly categorized possessing necessary ambience and parking. Presence of multiplex, kids’ play area, lobby, signage for guidance, food court, toilet etc., would be added advantages.

According to Ms.Josephine Celina, Director, V 4 EDGE Franchise Solutions Pvt. Ltd., who is a keen observer of developments in the franchise and retail industry, a proper mixture of products and ranges and more ranges for women & kids – related products would be certainly plus points for the malls, which might help them in their sustainability and survival.

About Future Inside
“Future Inside” is a well known facilitator of Franchising and Retailing community, powered by V 4 EDGE Franchise Solutions Pvt. Ltd., headquartered at Coimbatore, Tamil Nadu. “Future Inside” provides end to end solutions which include Franchise Business Alliance, Franchise Recruitment Service, Counselling to budding first generation entrepreneurs, Demographic research and feasibility studies, Retail space solutions, Retail HR Solutions and Customized franchising and retailing solutions.

With the untapped tier II and III cities showing a phenomenal 40-45% growth in the $16 billion Indian franchising industry. The Indian market that has never witnessed such excitement in the franchise industry,

From 300 franchisers in 2005, the numbers doubled in 2008 while standing at 1,150 in 2010. With understanding of the franchise business, companies are eager to explore opportunities in the market that is growing at 32-35% Year on Year.

Growth in infrastructure in those pockets, low rentals and high disposable incomes have given a thrust to this process

Franchising as a concept has been steadily gaining popularity because of the huge untapped potential in the Indian context, emergence of tier I and II cities as the next big retail destination, the relatively lower level of capital required to start the business, lower risk and availability of established brand names, marketing network and sales channels. India is the most sought after nation by international retailers due to low presence of international brands as compared to the country’s market size.

Recent developments such as relaxation of foreign investment rules, liberalized WTO guidelines and greater incentives from the government have clearly led to a spurt in the number of franchised outlets in India. Single-brand retailers are now allowed to own up to 51% of their operations in India.

Another major factor favoring the franchising market is that the Foreign Direct Investment (FDI) policy for organized retail does not permit the direct entry of foreign retailers. The latter, therefore, have to resort to franchised business models to enter the Indian market.

Malls – Serving as venues for Franchises