In the last two decades, India has witnessed a sea change in its foreign investment policy resulting in it being one of the most preferred investment destinations. With growing globalisation and liberalisation, brand awareness has been created in the Indian masses and today India is the one of the biggest and fastest emerging markets for various businesses across the world. Being geographically vast and culturally diverse, India offers the most favorable franchising environment with a huge consumer market. Franchising in this respect has managed to pick up as a successful business module for local companies in India.
India, by witnessing huge demographic branded products, global exposure transformation fuelled by and use of international brands consumption led growth, stands as an driving adoption of the franchising attractive destination globally for the route to growth.
Franchising business in India was worth USD 13.4 billion in 2012 and is expected to witness CAGR of 30 percent over the next 5 years. This amounts to about 1.4 percent of the country's GDP in 2012.
According to FAI-KPMG franchising report estimates’, the franchising industry is expected to quadruple between 2012 and 2017. There is scope for Franchising industry to contribute almost 4% of India GDP in 2017 (assuming 6% Y-o-Y GDP growth between 2012 and 2017), growing from a current estimated contribution of 1.4 percent of GDP. This is also expected to create job opportunities (including both direct and indirect) for an additional 11 million people by 2017.
While increasing consumption, willingness to spend, growing preference for branded products, global exposure and use of international brands is driving the demand side of franchising, increasing set of opportunity-driven competent entrepreneurs, growing awareness of Franchising as a business opportunity and its relative low risk profile are driving the supply of new franchisee units. Franchising contributes to the economic growth of a nation in multiple ways such as job creation, access to necessary goods and services and expansion of a country's tax base. The concept of franchising in India has been growing at an impressive rate since 2008, as risk-averse Indian entrepreneurs consider it as the most viable option to tap the nation's vast consumer market.