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Franchising Association looks into prowess & success of franchise business

06-September-2004
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Franchising Association looks into prowess & success of franchise business

Franchising Association of India brought together renowned names like Vineet Bhatnagar (Country Head, Refco), Pramod Khera (CEO, Aptech), Nilesh Shah (Chief Investment Officer, ICICI) and CY Pal (Chairman, Cadburys) on the same table for a discussion on the growing prowess of the franchise model, and the milestones crossed within this domain.

On the occasion, CY Pal (who incidentally heads Franchising Association of India) stated, “Franchising Industry in India has been particularly active in the last few years with around 800 franchise systems operating around the length and breadth of the country. While some are international in character like McDonalds and Kodak, there are others which are predominantly Indian. The franchise business accounts for an investment of approximately Rs 5,000 crore. I see this model, as an excellent model of growth and from the franchisee’s point of view; it provides a high value of success. From the consumer’s point of the view, this model gives him many advantages. While everyone talks about the retail boom in India, I see the franchise model attributing in large part to its success.”

Pal, adds, “The franchiser and franchisee relationship, however, ought to be balanced and one must spell trust. As far as the Franchising Association of India goes, we have been managing workshops within CII, FICCI and lobbying with the government bodies such as the Reserve Bank, in addition to maintaining a close relationship with the US embassy in India, in order to facilitate this model. I see the franchise model as something that’s not restricted to retail. It has a significant contribution to make in the services industry as well.”

Vineet Bhatnagar, Refco stated, “For the last 33 years, Refco has been present across 15 countries, functioning purely on the franchise model. I maintain that branding is not a function of the marketing department alone; brand value depends on a lot of other attributes. I see the franchise model as one that is beneficial to multiple stakeholders – be it customers, employers, suppliers or franchisees.”

Nilesh Shah, ICICI added, “A large part in the success of this industry, depends on the government. Emerging markets offer greater prospects as far as market opportunities are concerned and these are fairly untapped. In the days to come, I see India bringing in a similar deflation in services as China has brought in the sphere of manufacturing.”

Pramod Khera, Aptech, put in his two bit on the entire affair and asserted, “When we started out with Aptech, the concept of ‘leveraging franchises for good growth’ was in fact an alien concept. Today, Aptech’s success story is all too well known. Franchisers who have a good product need to leverage it and use it successfully. The cause is aptly being promoted by Franchising Association of India.”

Franchising Association of India is the only national organisation to be already registered under Section 25 of the Companies Act. It includes both franchisee and franchisor members and works to enhance and safeguard the activities of franchising at home and abroad. The association has partnered with exchange4media for a magazine dedicated to the business of franchising, known as ‘Franchise Plus’.

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