franchise Association of India

The world of Franchising & FAI

Whats Franchising ?

Franchising is the granting of a licence by one person (the franchisor) to another (the franchisee), which entitles the franchisee to own and operate their own business under the brand, systems and proven business model of the franchisor.The Idea is simple. Instead of developing company-owned outlets, some businesses expand by granting a franchise to others to sell their product(s) and/or service(s) Under the guidance & support of franchisor.

Who is monitoring the franchisee ?

Each franchise business is owned and operated by the franchisee. However, the franchisor retains control over the way in which products and/or services are marketed and sold, and controls the quality and standards of the way in which the business is operated.

Commercials between Franchisee and Franchisor ?

The franchisor receives an initial fee from the franchisee – payable at the outset – together with ongoing management service fees. Usually, these fees are based on a percentage of annual turnover or mark-ups on supplies or Royalty. In return, the franchisor has an obligation to support the franchise Partners. Basically it inclued training, product development, marketing and advertising, promotional activities together with a tailor-made range of management services.

History of Franchising In INDIA

You will definitely find a way to become entrepreneur through franchising.

The concept of Franchising was introduced to India by a Retail company in 1940s but it has boosted from the year 1986 by an IT training and education institute which later on attracted the top Franchising brand from the international market to Enter INDIA.Being, one of the biggest franchising markets because of its large middle-class of 300 million who are not reticent about spending and because the population is entrepreneurial in character. Majorly all the sector are now operating in Franchising module since its reduce the cost.

Franchising Today !!!

Franchising is now a flourishing industry boasts nearly 4,000 brands in a multitude of different sectors. From Small business to Bank every business and sector have adopted the method of Franchising for channel expansion.

Franchising has never been in better health than it is now. The authoritative research into the state of the industry – the universally respected FAI approved survey– has shown both short- and long-term growth trends to be very strong in the sector – including prior to and since the economic downturn of 2016 demonetisation and other government amendments.

After a slight downturn in that year, every year following has shown growth in terms of numbers of brands franchising, numbers of franchisees, numbers employed in franchise businesses and the overall turnover of the franchise sector.

Franchising In India Is yet to achive its mark due to unhealthy practices performed by the Franchisee and Franchisor which makes the Franching industry most insecure and fluctuating. and thus the growth ratio of Indian Franchising Industry is only 2% to 4%, which is expected to reach 20% by the year 2025 stated in a joint report done by KPMG and FAI in the year 2013.