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Indian Franchising and Retailing Summit: ‘Trust in the brand is the most important factor’

03-December-2007
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Indian Franchising and Retailing Summit: ‘Trust in the brand is the most important factor’

The burgeoning franchise and retail industry in India was brought under the scanner at the Indian Franchising and Retailing Summit. Organised jointly by the Franchising Association of India and Franchise Plus, the Summit was held in Mumbai on November 30 and December 1, 2007.

The two-day Summit offered a common platform to experts from national and international franchise and retail industries to congregate and share their experience and knowledge.

The Summit noted that present day franchise and retail markets were driven by a strong presence of brands. Some of the topics discussed in detail at the Summit included ‘Franchising – Future of Retailing in India’, ‘Structured Expansion through Franchising’, ‘Mentoring Retailers, Franchisees and Licencees’, new emerging formats in retail real estate catering to the new needs of the retail sector, as well as advertising and branding – vital tools for franchise building.

Speakers at the conference included Amit Jatia, MD-Western Region, McDonalds; Pramod Khera, CEO, Aptech; Yogesh Samat, COO, Foresight Vision Care Co; Swati Popat, MD, Jumbo Kids; Uday Sharma, Vice-President, Safexpress; Gulraj Singh Shahpuri, Director, Education One; Paul Merrifield, National Shopping Centre Development Manager, Aditya Birla Retail Ltd; Shubhranshu Pani, National Head, JLLM; Tarun Joshi, CEO, Brand House Retail; and Kapil Vahi, President, Prozone Enterprises, among others. Peter Forby, Australian Trade Commisioner, was the Guest of Honour at the Summit.

The speakers highlighted the factors influencing the growth of retail, its boom, new strategies and business opportunities for new entrants, as well as pitfalls to be avoided.

Addressing the Summit, C Y Pal, President, FAI, said, “Retailing has been witnessing a rapid growth. We see new malls coming up on a regular basis and many more are in the pipeline. Franchising as a business model has been growing at a rate of 30-35 per cent over the last 4-5 years in our country and it is now at a take-off stage. It now comprises nearly 50 per cent of India’s economy and provides employment to thousands of people, besides providing numerous opportunities to budding entrepreneurs.”

Addressing the Summit, Anurag Batra, Managing Director and Editor-in-Chief, exchange4media, said, “I see a lot of entrepreneurship booming today. So, while we do create a strong sense of franchising, the question that has always emerged in my mind is, are we creating a selfless wealth or going beyond that? By focussing on this point, we can adopt franchising in a successful way.”

The opening session dealt with the ‘Future of Retailing’, where a panel comprising Amit Jatia, Yogesh Samat, Pramod Khera and Suraj Saroj, discussed the various factors influencing retail growth in India, the booming sectors, and strategies to sustain this growth.

According to Jatia franchise was the backbone of retailing. Agreeing with him, Samat added that the common factor that sustained the relation between a franchisor and a franchisee was ‘trust’ in the brand. He said, “Trust is the most important factor in this business. This is one factor that binds two parties. One has to be committed since it is a long-term benefit and not a short-term business.”

The session following this was on ‘Structural Expansion Through Franchising’. Jumbo Kids’ Swati Popat, one of the speakers, started off with a presentation covering points that included planning for franchising growth, target setting and fallback mechanism, strategic planning, investment required, set-up time, ROI, breakeven time, and legal issues involved in franchising.

She said, “A brand name is important, and along with that comes the ambience as well as advertising one’s franchise. But that’s not the only factor. A franchising model is complete only when one is clear about the structural expansion of franchising.”

On the same lines, Education One’s Gujral Singh explained that franchising was all about common sense when it came to structural growth. According to him, when one thought about opening the next centre, it was a sign of growth.

Speaking on modern retail formats and real estate, JLLM’s Shubhranshu Pani said, “Today, several shopping malls have been springing up in quick succession. However, High Streets would remain the key drivers.” Agreeing with him, Brand House Retail’s Tarun Joshi, said, “High Street will very much stay alive. A huge potential for franchise and retail exists in Tier II and Tier III towns. As a franchisee, one has to adapt to the modern format and look out of the window.”

The next session involved ‘Mentoring Retailers, Franchisees and Licensees’. According to the panelists, another powerful contemporary form of marketing and brand extension was licensing. More than manufacturing, it is licensing today that works wonders in terms of money for some companies. The discussion bought licensing to the forefront and pointed out that it would reach out to a wider pool of companies’ business expansion initiatives, besides providing diverse business opportunities.

Paul Merrifield, National Shopping Centre Development Manager, Aditya Birla Retail Ltd, conducted a workshop on franchising. Merrifield explained that the only factor that would make a franchiser go to a retailer was a desperation for growth. He added, “If I had to allot a franchise to somebody, the first thing I would observe is the level of confidence in him and his brand. It is simple, I will buy into the confidence of a franchisee.”

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