Restaurant Franchising in India

It is widely reported that restaurant franchising in India is growing at the rate of 35-38 per cent each year with a market size of 7.2 billion US dollars. This figure is expected to reach 20 billion US dollars by the year 2013. In total, there are approximately 1,200 active franchise concepts in India and more than 100,000 franchisees. There are in the region of 200 restaurant franchising concepts across the country. Other important sectors using the franchising business model are beauty salons and cosmetics, business services, education, retailing, travel and tourism.

According to a survey carried out by Franchise India Holdings Ltd (FIHL), there are currently over 400 brand franchisors of which seventy per cent were concentrated in Delhi, followed by Western India with 386 brands, with the majority being from Mumbai and Gujarat. 250 brands were in the south, with the majority in Bangalore and Chennai and 58 brands in the eastern region, the majority being concentrated in Kolkata.

The survey finally gives the Indian restaurant franchising sector the recognition it has long deserved. The study also reveals that more than 30 per cent of new food outlets which are springing up in almost every city across India are through the franchise system. Such is the rate of growth, that restaurant franchises now account for an estimated 17% share of food and beverages in the commercial sector. Three-quarters of these are of Indian origin and the rest are international. The report makes for revealing reading with regard to the growth of the Indian economy and the food consumer market, and also its potential for any future expansion. The report states that 51 per cent of the consumer wallet share is dedicated to food (54 per cent in rural area and 42 in urban areas). The swift pace of growth and apparent success of the restaurant franchise sector is encouraging many restaurant owners and existing food companies throughout the country to look to increase their brand in terms of franchisees across the country.

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