FY 2014-15 reports had suggested that logistic industry was worth US $ 200 billion (approximate), grown at an annual rate of 20 percent over last few years. Imports and exports activities within India and with foreign countries drastically changed, air, rail, road and ship transport respectively grew at rapid rate in order to supply goods or services. Sectors like automobile, food and beverage, retail, pharmaceutical and clothing largely depend on logistics sector to transfer goods from place to another. Logistics services providers take advantage of online platform to deliver better services. For example, Cogoport is perfect example of online logistics marketplace, offer ship and air route services. Logistics industry is mainstay of Indian economy; various commercial sectors generate huge revenues due to effective distribution channel for goods. Despite economic downturn, industry consistently witnessed unprecedented growth, e-commerce logistics sector is increasing day-by-day. With promising growth rate, new players want to use business model of established operators. Franchising is only option left to expand business; logistic franchise business model is one of the emerging business opportunities these days.
Government initiatives to improve integrated logistics are expected to work positively for the industry, moreover multi-model logistic parks (MMLP) nearby manufacturing centres is developed to help companies. As per present scenario, logistic organizations utilized technology to enhance commercial operations, integrated IT solutions are used to reduce costs. Now it becomes possible to track order through online applications, e-commerce giants like filpKart, Amazon and EBay mainly demand on supply chain management system to deliver best services. Thus e-commerce retail platform has transformed whole logistics industry. Services provider offer franchise business opportunities, entrepreneurs who want to become part of logistic industry should focus on franchise business model. Governmental policies are expected to fuel fast-growing industry, SME sector is largely depend on logistic industry to generate revenues. Looking into present condition future is bright for industry.
Franchising, significantly gained popularity throughout the globe and likely to see steady growth in forthcoming years. If people had enough money they are searching for best franchise to buy or concentrating on franchise business sectors which make the most money. There are franchises that popular around the world but question is that will it really suits your area of interest or best for you. Rather just investing money did proper market research, collect information about franchise you’re looking for. Franchising model looks easy but it doesn’t mean to suit everyone. There are few checkpoints would be considered before buying a business:
- Financial stability
A well established brand in your desired business sector will be good choice. During discussion regarding franchising ask the franchisor about financial status or model. An effective revenue generation model is always easy to handle and you can figure out profits or loss as well.
- Brand value
More importantly, people always rush to places which are popular. Do proper research to know about market value of brand you’re investing on. Be realistic and don’t try to assume things on yourself.
The Franchisor is required to provide all relevant documents like operations, training manuals and licence. All commercial activities run as per governmental rules and regulations.
- Return on Investment (ROI)
After investing huge money you will expect profits as well. Simply, get to know about how much return you will get after certain time period.
- Training support
In order to know about company’s policies, products or services systematic program is crucial. Ask franchisor about training support, how long it will take to get all necessary information. A successful franchise company always trained franchisee; give them opportunity to know more about how products or services sell in market.
- Profit margin
Becoming a profitable franchisee is dream of every investor, check what profit margin is shared by franchisor.
As franchise business model is consistently changed through latest technological advancement; there is new business as well as academic opportunities will be created in coming years. According to United Nations organization (UNO), 196 countries are official exist on the planet out of which 150 nations engaged in franchising concept. Companies headquartered in various nations around globe looking to expand business in other countries thus franchise is best model to make business associates. Moreover, Franchisor (company that offer franchise) and franchisee (company that pay for franchise) both are concentrating primarily on hiring professionals with an education in franchising. But at current scenario there are few universities that offer bachelor degree program in franchising however in countries like India and China where large number of franchise establishments operated still didn’t implement any course for specific franchise studies.
As well aware about the fact that franchising is widely accepted as best business concept by both franchisee and franchisor. There are school of business in USA, offered bachelor degree in management by giving opportunity study franchising.
Franchise as a career
Like other career options, franchising could be best opportunity to become an expertise by gaining completed academic related concepts. Companies that operate franchising had to face lots of problems regarding marketing, management and other business concepts. To overcome all troubles they are even more focusing to work with professionals who have depth knowledge. In India there is hardly any University that offer bachelor degree in management (franchising). In order to provided assistance to franchisee and franchisor it is crucial to teach students about franchising principles and polish their knowledge and skills to nurture franchise business model. It goes without saying that franchise industry is becoming a mega status industry and generates lots of business opportunities. Thus industry requires some talented professionals who develop new concepts to add more value to franchising.
In next five years e-education or online education platform will create lots of franchise business opportunities. Growing dependency on internet is resulted in development of e-educations apps like BY JU’s, now it become easy to for professionals or students who don’t want to travel to distance places for further certified courses or exam preparation. From notes to live classes everything is easily available through various e-learning companies. Day-by-day number of users has been increased and is estimated that industry might touch US $ 2 billion by end of 2020. E-learning platform is still in nascent stage, and can be categorised as:
• Primary and higher class learning
• Certification course for corporate
• Exam preparation portals
• Casual learning
This sector is expected to increase at a rapid rate, there were 2 million users in years 2014 and then after huge jump is observed approximate 7 million users take advantage of e-learning platforms. Several companies successfully established as brand offer franchising opportunities as well. For example, BY JU’s incorporated in year 2013 has become one of the best platforms to learn basic concepts. In addition, there are number of start-ups line up to make entry to serve India large population. Brilliant students living tier 2 and underdeveloped regions also take e-education as opportunity to clear their concepts. Things get simpler, you it has become possible to join online classes provided by lecturers in foreign countries. Physical educational systems are also adopted e-learning concepts to give new experience to students. Near about 50 % of enquiries for e-learning is comes from tier 1 and tier 2 cities. However, after launching of 4G network throughout India is significant step towards creating a ‘Digital India’. You Tube is best platform for utilized by millions of users. E-education market is growing at a rapid rate but still there are lots of things that should be developed like best network and database.
The role of franchising in economic growth and development is significant as franchise business model stimulate employment and business opportunities. Franchising is generally an effective business model divided into different categories:
Franchisee sells products or services from retail outlets. At present this type of franchise model is gaining popularity as operators in sector like food and apparel focusing mainly on retail franchise.
Single operator franchise
This type of franchise is handed solely by professionals who give fees to franchisor to use company’s brand name and products or services.
Business related franchise
Franchising is not only limited to few industrial sectors but it is utilized specifically by organizations offer services like accounting and tax, professional services, etc.
Developing countries like Indian and China is benefitted extensively due to franchise establishments over the past few years. China is populous country around the world, international brands are seeing it as land of opportunity to increase market share. On the other hand franchising in India is independently progressing, contributing effectively to national economy. Small scale industries are mainstay of Indian economy hence it is essential to develop more establishments. Through franchise business model small pocket entrepreneurs can easily expand business in different locations. Strong product and brand recognition leads to increased sales and productivity. It’s easier for small business owners to reach new customers by offering franchisee to investors. Even government of developing have realized the importance of small scale industries towards economic growth and development. For example, in India there are no tough laws for franchising because international as well as domestic companies easily expand. It goes with saying that Rome can’t be build in a day likewise small scale industries market didn’t develop in a hurry. Franchise is a tested and proven way to expand business, in fact, most convenient and cost-effective technique.
Time period 2008-10 was downturn phase of Indian economy because industries were unable to get aligned with smart technologies. Gradually government has understood that new laws should be enacted to relieve pressure. To some extent things get settled down in the very FY 2011-12. Since then new business opportunities have been growing in market in sectors like entertainment, communication, energy, and consumer durable. At current scenario, masterpiece innovations took place in satellite communication. India became the only country to successfully launch satellites in very first attempt. Industries are empowered through various governmental initiatives. In every Union budget government has focused mainly on employment, agricultural growth, industrial growth and middle class growth.
In current FY 2016-17, it is estimated that lots of business as well as employment opportunities will be created. Till date, government has surprised us with demonetization and goods and services tax. Half of the year has gone but still there is no sign of growth and development. On the other hand several franchise sectors are breaking records, contributing effectively to nation’s economy. For example, food and beverage sector is all set to become mega industry by end of 2017. As well as retail and textile sector is also expanding make space for new players due to amendments in FDI (foreign direct investment) laws. On the other hand, franchise business model is utilized by companies operate in sports segment as well. Overall Indian marketplace is witnessing exponential growth and is considered as best destination by international brands. Low cost business opportunities are created to enable small pocket entrepreneurs to start new business. In order to develop a stable economy everyone’s contribution is significant. India’s economy is largely depending on agricultural production, several industrial sectors also depend on agricultural, in fact, almost half of working living in rural areas. Government has taken several decisions to up lift rural regions of the country.
Franchise business model is among most profitable models used especially by food and drinks operator across the globe. Entire franchise business model is designed in such that both franchisee and franchisor will equally benefit. Range of industrial segments such as education and training, business services, retail, dealer or distributor and so on expanded easily through franchising concept. Large multinational corporations as well as small and medium sized enterprises generate good profits without involving in any kind of risk. For any start up dealing with customers who are brand loyal is difficult, situation even gets complicated when new technologies suddenly encounter. Thus capitalize on franchising is always a profitable business venture.
To build a flexible franchise business model you need to focus on following things:
Right business: Before engaging in any business future perspective should be analysed. For example, if you start food franchise then franchise model will effectively fit. On the contrary in monopoly selling franchise is quite difficult such as Microsoft’s products.
Right approach: whatever you want to achieve you need to design effective strategies and policies. To build effective business model always take recession situation into account.
Market segmentation: Right market selection is driver for successful business venture. All your strategies should be implemented to target specific markets segments. Gradually after successful initial year’s operation, capitalize on franchising to penetrate unknown market regions.
Technology: Without technical support your business can’t survive even for a single minute. Building online platform is essential to survive in competitive environment.
Therefore to build franchise business model each and every aspect of business should be considered. Operational activities are carried effectively to survive during recession time. At current scenario global economy as well as economy of developing and developed countries fluctuates often so always focus on low risk business like food franchise, retail and education and training, as these segments are evergreen and fruitful.