In this listicle, we will delve into some retail brands that have overcome challenges and expanded significantly through the franchise model in India, illustrating the potential of this approach in the country’s diverse and competitive market when brands either don’t have the financial muscle to open stores in the nook and corner of the country or don’t want to
Mumbai: The franchise model has been a successful strategy for various retail brands in India as it allows brands to expand their footprints in the market with the help of local franchisees without the brands themselves spending much on expensive real estate. The model offers significant advantages including expansion of market reach, and sharing investment burden while reaching diverse geographies.
“There’s been a flurry of retail brands that have thrived over the last many years through a franchise model and it works well for both the brand and the franchise partners,” asserts Dr Kushal Sanghvi, marketing expert.
Although the franchise model offers numerous advantages for businesses, it also presents a set of challenges, particularly when it comes to maintaining brand consistency in the market. This aspect of brand management is crucial because it ensures that customers have a uniform and dependable experience, regardless of which franchise location they visit.
In this listicle, we delve into some retail brands that have overcome challenges and expanded significantly through the franchise model in India, illustrating the potential of this approach in the country’s diverse and competitive market.
Patanjali
Founded in 2006, Patanjali has become a household name in India. Boasting a network of over 10,000 exclusive franchise outlets, it offers an extensive array of FMCG products through various franchise formats. These formats include Patanjali Mega Stores, Patanjali Chikitsalaya, Patanjali Arogya Kendra, and Swadeshi Kendra, providing consumers with a diverse range of choices. In the financial year 2022, Patanjali Foods Ltd recorded a revenue of over ₹242 billion, signifying its successful journey through franchising, as per a report by Statista. This model has allowed Patanjali to swiftly expand its reach, making Ayurvedic products more accessible to consumers nationwide.
Tanishq
As one of Tata Company’s flagship jewellery brands, Tanishq, founded in 1994, has experienced substantial growth, particularly in the fiscal year 2023. With around 350 outlets spread across the nation, Tanishq’s franchise model has proven fruitful. In fiscal year 2023, Tata’s jewellery brands reported an EBIT (earnings before interest and taxes) of over ₹43 billion, an increase from around ₹9 billion in fiscal year 2015. This growth has been facilitated by the addition of 36 new Tanishq stores in the same year, reinforcing the brand’s presence in India’s jewellery market.
“Brands that have been built of the pillars of trust such as Tata Group. The franchise of Tanishq even in a small town works really well while it is about establishing trust for the first-time buyers in that small town, especially in a category like gold jewellery,” Sanghvi adds.
Lenskart
In the eyewear industry, Lenskart has made a significant impact since its establishment in 2010. The brand achieved this through an extensive network of franchise units over 1,100 in number. This strategic use of the franchise model has allowed Lenskart to not only broaden its reach but also generate substantial revenue, amounting to ₹15 billion in the financial year 2022.
Sanghvi states, “Same is the case of buying eyewear from a trusted seller like Lenskart and it’s then about creating a habit of buying eyewear from a trusted source even as compared to the neighbourhood optician’s suggested store.”
TTK Prestige
TTK Prestige, specializing in kitchen appliances, has been utilizing the franchise model effectively. Founded in 1955, the company has expanded to around 560 outlets in more than 330 cities across India. In fiscal year 2022, TTK Prestige recorded revenues of approximately ₹25.32 billion, showcasing steady growth facilitated by its franchise model. This approach has allowed the brand to maintain a widespread presence in the kitchen appliance industry while continually increasing its revenue.
Spykar
Spykar, a denim fashion major, made its debut in 1992 and has since thrived in the Indian market. The brand operates through more than 249 exclusive franchise-owned outlets and reaches consumers through over 1,000 multi-brand outlets and e-commerce platforms. “Every one of Spykar’s stores are franchised,” revealed Sanjay Vakharia, chief executive officer, Spykar while speaking at an IMAGES Retail event. He added that giving away retail to franchises has freed up the brand to focus more on its offerings. This multifaceted approach to franchising has enhanced Spykar’s success in the denim fashion industry.
*Do not that this is not an exhaustive list. There are many more companies that have grown through the franchising route and we will cover them in subsequent articles.
