Franchise Market - India
June 2014
2
Executive Summary
Market
India has emerged as a viable franchising destination for major brands owing to the increasing...
3
•Macro-Economic Indicators
•Introduction
•Market Overview
•Types of Franchising
•Benefits & Key Success Factors
•Market ...
4
Economic Indicators (1/3)
d1
a1
11
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13
14
15
Q4
b4
a4
Q3
b3
a3
Q2
c2
b2
a2
Q1
c1
b1
INR tn
c4
c3
d2
2012-132010-11 201...
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Though at an initial stage, yet franchising in India has
progressed and is posting healthy growth over past 4 years
Fran...
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SAMPLEFranchising – India Snapshot (1/4)
Franchise Market – Indian Overview
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FRAN...
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SAMPLE
An analysis of geographical segmentation details about
where franchising has caught up well
Franchising – Geograp...
8
SAMPLEEntry Routes – Segmentation
Segmentation of
different entry
strategies based
on the ones
adopted in high
probabili...
9
SAMPLE
Education Franchising – Types
Sectors (2/7)
• There are multifarious opportunities in education
franchising inclu...
10
SAMPLEDrivers and Challenges
• India’s affinity to receive quality education to fulfill
the aspirations of its youth is...
11
Drivers & Challenges – Summary
Drivers
Growth in disposable income and
consumer spending
Development of malls and
super...
12
Government Regulation – Summary
Regulation
Franchising laws in India
Indian Franchise
Association
Franchising Associati...
13
Trends – Summary
Entrepreneur cafe
E-newsletter as the latest
promotional technique
E-franchisees
Business model addres...
14
SAMPLEFranchise Opportunities
Automobile (1/2)
Investment Franchise Franchise Descriptions
Upto INR 0.5 mn T1 • T5
INR ...
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SAMPLEKey Ratios of Top 3 Companies – Operational Basis (FY 2013) (1/3)
Competitive Benchmarking (2/5)
j5j4 j6
%
Compan...
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Public : Domestic Company – Company 1
Key People
Products and Services
City A
Company Information Offices and Centres –...
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SAMPLEFinancial Snapshot Key Ratios
Financial Summary
• The company incurred a net profit of INR A mn in FY 20--, as
co...
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Key Recent Developments
Key Business Segments Key Geographic Segments
Description News
Overview • It sells product A un...
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Date of Operation...
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FRANCHISE MARKET IN IN...
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Key People
Products and Services
City A
Company Information Offices and Centres – India
Corporate Address
Block ABC
Cit...
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SAMPLEShareholders of the Company Ownership Structure
Name No. of Shares held
n1 m1
n2 m2
n3 m3
n4 m4
n5 m5
n6 m6
n7 m7...
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SAMPLEFinancial Snapshot Key Ratios
Financial Summary
• Company earned a net loss of INR - mn in FY 2013, as
compared t...
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SAMPLEKey Recent Developments
Description News
Overview
• Is a wholly owned subsidiary of the concern g
• It is working...
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SAMPLEInvestment Details
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Date of Operation...
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FRANCHISE MARKET IN IN...
27
Thank you for the attention
About Netscribes, Inc.
Netscribes, Inc. is a knowledge-consulting and solutions firm with c...
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Market Research Report : Franchise Market in India 2014

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Market Research Report : Franchise Market in India 2014

  1. 1. Franchise Market - India June 2014
  2. 2. 2 Executive Summary Market India has emerged as a viable franchising destination for major brands owing to the increasing disposable income of the people who are keen at shelling out more for luxury brands Education, food and beverage and retail constitute the top sectors for earning revenues in the Indian franchising arena Among market entry strategies, unit franchising is hailed as being the most opted route for entry Drivers & Challenges Competition Drivers  Growth in disposable income and consumer spending  Development of malls and supermarkets  Access to internet  Introduction of FDI in retail  Improvement in transportation infrastructure  Increasing availability of credit  Change in consumer outlook Challenges  Shortage of skilled manpower  Real estate issues Major Players Player 1 Player 2 Player 3 Player 4 Player 5 Player 6 E-newsletter as the latest promotional technique Business model addressing rural-urban divide E-franchisees Entrepreneur Cafe Trends FRANCHISE MARKET IN INDIA 2014.PPT
  3. 3. 3 •Macro-Economic Indicators •Introduction •Market Overview •Types of Franchising •Benefits & Key Success Factors •Market Entry Routes •Franchise Model in Key Sectors •Drivers & Challenges •Government Participation •Trends •Franchise Opportunities •Competitive Landscape •Strategic Recommendations •Appendix FRANCHISE MARKET IN INDIA 2014.PPT
  4. 4. 4 Economic Indicators (1/3) d1 a1 11 12 13 14 15 Q4 b4 a4 Q3 b3 a3 Q2 c2 b2 a2 Q1 c1 b1 INR tn c4 c3 d2 2012-132010-11 2013-142011-12 GDP at Factor Cost: Quarterly Inflation Rate: Monthly q 0.0 0.2 0.4 0.6 0.8 1.0 r t s % Jul 2013 - Aug 2013 p q Nov 2013 - Dec 2013Oct 2013 - Nov 2013Sep 2013 - Oct 2013Aug 2013 - Sep 2013 FRANCHISE MARKET IN INDIA 2014.PPT
  5. 5. 5 Though at an initial stage, yet franchising in India has progressed and is posting healthy growth over past 4 years Franchise Market – Indian Overview Franchise Market – Growth •A growing urban class aided by rising disposable income has strengthened India’s position as a viable franchising destination in the global platform •Greater demand for goods have translated into generation of greater demand for franchises which is growing at an impressive growth rate of x1% annually •Further, owing to the less hassles in setting up an entrepreneurial venture an increasing number of people are opting for franchise route to expand and enter Indian market •Education, food and beverage, and retail sector constitute the top sectors from the Indian franchising perspective FRANCHISE MARKET IN INDIA 2014.PPT 0 INR bn 2014e x8 2015e 2017e x5 2018e x6 x4 x7 2016e x3 2013 x2
  6. 6. 6 SAMPLEFranchising – India Snapshot (1/4) Franchise Market – Indian Overview y1 s1 y2 s2 y3 y4 s4 s3 y6 y5 s6s5 2013 FRANCHISE MARKET IN INDIA 2014.PPT
  7. 7. 7 SAMPLE An analysis of geographical segmentation details about where franchising has caught up well Franchising – Geographical Segmentation (2013) N O R T H Has posted good growth owing to the presence of HNI (high net worth individuals) with key hubs including New Delhi, Noida and Gurgaon S O U T H Has gained focus of international franchisors with Bengaluru being recognized as the IT capital of India and having enough population with considerable purchasing power E A S T Slightly less developed compared to North or West, but is fast catching up with Kolkata leading from the front W E S T Is hailed as a prime region for transactions as Mumbai is named as the business capital of India, with Pune and other regions not lagging far behind 0 North Unit % t1 t2West t4 t3 East South FRANCHISE MARKET IN INDIA 2014.PPT
  8. 8. 8 SAMPLEEntry Routes – Segmentation Segmentation of different entry strategies based on the ones adopted in high probability by the investors for their expansion or market entry Text Franchise Market – Entry Routes (2013) p4 p5 p6 p3p1 p2 FRANCHISE MARKET IN INDIA 2014.PPT
  9. 9. 9 SAMPLE Education Franchising – Types Sectors (2/7) • There are multifarious opportunities in education franchising including pre-school franchise, play school, day-care franchise, child care, learning center, training institute, grooming center, IT institutes, animation school, retail school, coaching classes, educational institute, aviation academy, language center, recruitment service, and customer services •Business opportunities are blooming with the concept of franchising especially in education sector •Education is hailed as the second largest household expenditure segment after food in India •This makes it a more attractive sector where more than 390 franchisee owners operate •Informal and supplementary education forms the lion’s share of education franchising Education Sector – Overview Education Sector – Market Size & Growth Education Franchising – Scope for Growth 0 INR tr 2014e q3 2013e q6 q5 q4 2012 q2 q1 2015e2011 q7 q8 FRANCHISE MARKET IN INDIA 2014.PPT
  10. 10. 10 SAMPLEDrivers and Challenges • India’s affinity to receive quality education to fulfill the aspirations of its youth is considered to be the most significant growth driver for this sector • Gap identified between the number of potentially employable people and the number of educational institutes available in the country poses as a big opportunity for the service providers to capitalize on • Pre-schools are considered to be yet another domain wherein franchising seems to play a significant role • Present scenario poses enough opportunities for education franchising as parents are ready to shell out considerable amount to provide quality education to their kids • Growing number of working women also poses as a driver as families with two working parents generally send their kids to coaching and pre-schools for education as they cannot devote time to them Drivers • The sector is burdened with the high real estate prices since it requires setting up of a classroom • Presence of stiff competition wherein cropping up of too many institutes can be termed as a challenge for any start-up • Success of any educational franchise is dependent on the manpower resources wherein if proper qualified staff do not render teaching, then name and market reputation of both the franchisor and the franchisee is at risk • Educational institutes are hailed as being hindered by lack of advertising, although service providers are working on it intensively by promoting through newspapers, radio and television • Another significant challenge faced by them is the maintenance of standard between the parent institute and the authorized institute Challenges FRANCHISE MARKET IN INDIA 2014.PPT
  11. 11. 11 Drivers & Challenges – Summary Drivers Growth in disposable income and consumer spending Development of malls and supermarkets Access to internet Introduction of FDI in retail Improvement in transportation infrastructure Increasing availability of credit Change in consumer outlook Challenges Shortage of skilled manpower Real estate issues FRANCHISE MARKET IN INDIA 2014.PPT
  12. 12. 12 Government Regulation – Summary Regulation Franchising laws in India Indian Franchise Association Franchising Association of India FRANCHISE MARKET IN INDIA 2014.PPT
  13. 13. 13 Trends – Summary Entrepreneur cafe E-newsletter as the latest promotional technique E-franchisees Business model addressing rural- urban divide Key Trends FRANCHISE MARKET IN INDIA 2014.PPT
  14. 14. 14 SAMPLEFranchise Opportunities Automobile (1/2) Investment Franchise Franchise Descriptions Upto INR 0.5 mn T1 • T5 INR 0.5 – 1.5 mn T2 • T6 T3 • T7 INR 1.5 – 3.0 mn T4 • T8 FRANCHISE MARKET IN INDIA 2014.PPT
  15. 15. 15 SAMPLEKey Ratios of Top 3 Companies – Operational Basis (FY 2013) (1/3) Competitive Benchmarking (2/5) j5j4 j6 % Company 2 j1 j3 Company 3Company 1 j2 Net MarginOperating Margin • Company 1 recorded operating margin of -%, higher than that of Company 2 which recorded operating margin of negative -% and Company 3 which recorded operating margin of negative -% • Company 1 recorded the highest net margin of -%, higher than Company 2 which recorded a net margin of negative -% and Company 3 which recorded a net margin of -% FRANCHISE MARKET IN INDIA 2014.PPT
  16. 16. 16 Public : Domestic Company – Company 1 Key People Products and Services City A Company Information Offices and Centres – India Corporate Address Block ABC City XYZ Tel No. 123456 Fax No. 1234567 Website http://www.abc123com/ Year of Incorporation 20-- Category Products/Services Product 1 P1,p2,p3 Name Designation ABC abc XYZ xyz MNO mno FRANCHISE MARKET IN INDIA 2014.PPT
  17. 17. 17 SAMPLEFinancial Snapshot Key Ratios Financial Summary • The company incurred a net profit of INR A mn in FY 20--, as compared to net profit of INR B mn in FY 20-- • The company reported total Income of INR X mn in FY 20--, registering an increase of r % over FY 20-- • The company earned an operating margin of d1 % in FY 20-- an decrease of k % points over FY 20-- • The company reported debt to equity ratio of g in FY 20--, an increase of r % over FY 20-- Financial Summary Indicators Value (DD/MM/YYYY) Market Capitalization (INR) a Total Enterprise Value (INR) b EPS (INR) c PE Ratio (Absolute) d Particulars y-o-y change (20-----) 20-- 20-- 20-- 20-- Profitability Ratios Operating Margin a1 a a2 a3 a4 Net Margin b1 b b2 b3 b4 Profit Before Tax Margin c1 c c2 c3 c4 Return on Equity d1 d d2 d3 d4 Return on Capital Employed e1 e e2 e3 e4 Return on Working Capital f1 f f2 f3 f4 Return on Assets g1 g g2 g3 g4 Return on Fixed Assets h1 h h2 h3 h4 Cost Ratios Operating costs (% of Sales) i1 i i2 i3 i4 Administration costs (% of Sales) j1 j j2 j3 j4 Interest costs (% of Sales) k1 k k2 k3 k4 Liquidity Ratios Current Ratio l1 l l2 l3 l4 Cash Ratio m1 m m2 m3 m4 Leverage Ratios Debt to Equity Ratio n1 n n2 n3 n4 Debt to Capital Ratio 01 o o2 o3 o4 Interest Coverage Ratio p1 p p2 p3 p4 Efficiency Ratios Fixed Asset Turnover q1 q q2 q3 q4 Asset Turnover r1 r r2 r3 r4 Current Asset Turnover s1 s s2 s3 s4 Working Capital Turnover t1 t t2 t3 t4 Capital Employed Turnover u1 u u2 u3 u4 Improved Decline Net IncomeRevenue 0 20-- x4 20-- x3 20-- x2 20-- x1 FRANCHISE MARKET IN INDIA 2014.PPT Public : Domestic Company – Company 1
  18. 18. 18 Key Recent Developments Key Business Segments Key Geographic Segments Description News Overview • It sells product A under the brand name of ‘abg’ & ‘def’ Production facilities • In India the company has k manufacturing hubs and j marketing offices Shareholding pattern • Promoters of the company hold j % of the share while k % is held by general public Clients • Clients are spread across ghj countries spanning across t continents Investments • The company wants to invest INR K mn in a company through a joint venture in Country 2 producing product a and product b • So far the company invested INR 0.C mn in company A in country A 0 20-- c d 20-- ba 20-- 20-- y1 0 c1 a1 20--20-- b1 20-- India FRANCHISE MARKET IN INDIA 2014.PPT Public : Domestic Company – Company 1
  19. 19. 19 SAMPLEInvestment Details • Text • Text • Text • Text • Text • Text • Text • Text • Text • Text • Text Date of Operation Franchise Requirements Rights Supports Offered FRANCHISE MARKET IN INDIA 2014.PPT Public : Domestic Company – Company 1
  20. 20. 20 SAMPLE • Text • Text • Text • Text • Text • Text • Text • Text • Text • Text • Text • Text TO WS FRANCHISE MARKET IN INDIA 2014.PPT Public : Domestic Company – Company 1
  21. 21. 21 Key People Products and Services City A Company Information Offices and Centres – India Corporate Address Block ABC City XYZ Tel No. 123456 Fax No. 1234567 Website http://www.abc123com/ Year of Incorporation 20-- Category Products/Services Product 1 P1,p2,p3 Name Designation ABC abc XYZ xyz MNO mno FRANCHISE MARKET IN INDIA 2014.PPT Private : Domestic Company – Company 2
  22. 22. 22 SAMPLEShareholders of the Company Ownership Structure Name No. of Shares held n1 m1 n2 m2 n3 m3 n4 m4 n5 m5 n6 m6 n7 m7 Total p2 p1 p3 p4 FRANCHISE MARKET IN INDIA 2014.PPT Private : Domestic Company – Company 2
  23. 23. 23 SAMPLEFinancial Snapshot Key Ratios Financial Summary • Company earned a net loss of INR - mn in FY 2013, as compared to net loss of INR - mn in FY 2012 • It reported total income of INR - mn in FY 2013, registering an increase of -% over FY 2012 • Earned an operating margin of -% in FY 2013, a decrease of - percentage points over FY 2012 • The company reported a current ratio of - in FY 2013, a decrease of -% over FY 2012 Net Profit/Loss Total Income -200 -150 -100 -50 0 50 0 INR mn INR mn 2013 h2 h1 2012 g2 g1 2011 f2 f1 2010 e2 e1 FRANCHISE MARKET IN INDIA 2014.PPT Particulars y-o-y change (20-----) 20-- 20-- 20-- 20-- Profitability Ratios Operating Margin a1 a a2 a3 a4 Net Margin b1 b b2 b3 b4 Profit Before Tax Margin c1 c c2 c3 c4 Return on Equity d1 d d2 d3 d4 Return on Capital Employed e1 e e2 e3 e4 Return on Working Capital f1 f f2 f3 f4 Return on Assets g1 g g2 g3 g4 Return on Fixed Assets h1 h h2 h3 h4 Cost Ratios Operating costs (% of Sales) i1 i i2 i3 i4 Administration costs (% of Sales) j1 j j2 j3 j4 Interest costs (% of Sales) k1 k k2 k3 k4 Liquidity Ratios Current Ratio l1 l l2 l3 l4 Cash Ratio m1 m m2 m3 m4 Leverage Ratios Debt to Equity Ratio n1 n n2 n3 n4 Debt to Capital Ratio 01 o o2 o3 o4 Interest Coverage Ratio p1 p p2 p3 p4 Efficiency Ratios Fixed Asset Turnover q1 q q2 q3 q4 Asset Turnover r1 r r2 r3 r4 Current Asset Turnover s1 s s2 s3 s4 Working Capital Turnover t1 t t2 t3 t4 Capital Employed Turnover u1 u u2 u3 u4 Improved Decline Private : Domestic Company – Company 2
  24. 24. 24 SAMPLEKey Recent Developments Description News Overview • Is a wholly owned subsidiary of the concern g • It is working at establishing a standardized network of h • Is considered to be positioned to be the largest corporate player in the I market Services •It addresses diurnal t1, t2 needs •It offers a complete range of services such as consultation with t4, t5, t6  Consultations are provided in diverse fields such as t7, t8, t9  Boasts of having laboratory that are equipped to handle investigations related to t9, t10, t11  Moreover, it also processes t12 FRANCHISE MARKET IN INDIA 2014.PPT Private : Domestic Company – Company 2
  25. 25. 25 SAMPLEInvestment Details • Text • Text • Text • Text • Text • Text • Text • Text • Text • Text • Text Date of Operation Franchise Requirements Rights Supports Offered FRANCHISE MARKET IN INDIA 2014.PPT Private : Domestic Company – Company 2
  26. 26. 26 SAMPLE • Text • Text • Text • Text • Text • Text • Text • Text • Text • Text • Text • Text TO WS FRANCHISE MARKET IN INDIA 2014.PPT Private : Domestic Company – Company 2
  27. 27. 27 Thank you for the attention About Netscribes, Inc. Netscribes, Inc. is a knowledge-consulting and solutions firm with clientele across the globe. The company’s expertise spans areas of investment & business research, business & corporate intelligence, content-management services, and knowledge-software services. At its core lies a true value proposition that draws upon a vast knowledge base. Netscribes, Inc. is a one-stop shop designed to fulfil clients’ profitability and growth objectives. Franchise Market – India report is part of Netscribes’ Retail and Services Series. For any queries or customized research requirements, contact us at: Disclaimer: This report is published for general information only. Although high standards have been used in the preparation, “Netscribes” is not responsible for any loss or damage arising from use of this document. This document is the sole property of Netscribes and prior permission is required for guidelines on reproduction. Phone: +91 22 4098 7600 E-Mail: info@netscribes.com FRANCHISE MARKET IN INDIA 2014.PPT

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