FRANCHISING IN INDIA

(Formats, Success stories and legalities)

By: Prerna Pawar Shagun Singh Krish Desai

Types of franchising formats in India

Investment

franchising franchise

Management Business

format franchising Franchise

Manufacturing Product

/ Trademark Franchise / Dealers / Agencies

Distributorships

Investment franchising
Franchisor invests large amounts of money into the

business and finance franchises without working directly within the business
The franchisee will employ a team of managers to ensure

the smooth running of the franchise and will not have to work there themselves

Management franchise
Includes office based work It is best for those with management experience and the

ability to work with a number of staff

Requires skilled staff with experience in administration and

dealing with clients

It requires some marketing skills to create interest in the

services offered to potential business clients

Business format franchising

The format of franchising permits the franchisee to use the

franchisors product/services, trade name, trade mark and most importantly the prescribed business format
Franchisees have the identity of Franchisor company-right

from store design to service standards to deliveries

Examples: McDonalds, KFC, Dominos, Barista Coffee

Chain

Manufacturing franchise
These types of franchises provide an organization with the

right to manufacture a product and sell it to the public, using the franchisor's name and trademark
Examples:

Product / Trademark franchise

Manufacturers use the product franchise to govern how a

retailer distributes their product

The manufacturer grants a franchisee the authority to

distribute goods by the manufacturer and allows the owner to use the name and trademark owned by the manufacturer
Example: Bata India

Distributorships, Agencies and Dealers

A parent company grants the right to the franchisee to sell

their products
The term is commonly used to describe wide variety of

business relationships which may or may not fall into the legal definition
Examples:

Dominos franchise story

Founded in 1960 by Tom Monaghan Goal: open three pizza delivery stores. By franchising, Dominos Pizza has become the world leader in pizza delivery Currently there are 9,350 stores in 70+ international markets.

Franchisor Franchisee relationship

Dominos Pizza Group (DPG) is known as a master

franchisee.
Franchisees are both DPGs customers and business

partners.
DPG operates service level agreements which clearly set out

the high standards of service and support

 The DPG functions that provide the majority of regular and

visible support to franchisees - information systems, foodservice, flawless execution (training and operations) and marketing - are accountable, transparent and managed by skilled and experienced people who are motivated to make franchisees successful
Four week intensive Franchise Development

Program: designed to equip with the knowledge and skills required

The Bata Way

It is a large, family-owned shoe company established

in Zlin, modern-day Czech Republic and currently headquartered in Lausanne, Switzerland

Three business units worldwide Bata Metro Markets,

Bata Emerging Markets and Bata Branded Business

Retail presence in over 70 countries and production

facilities in 27 countries
In its history the company has sold more than 14 billion

pairs of shoes

 Bata India is the largest retailer and leading manufacturer

of footwear in India and is a part of the Bata Shoe Organization.

The Company went public in 1973 when it changed its name

to Bata India Limited

Large non retail distribution network through its urban

wholesale division caters to customers through over 30,000 dealers

Legalities in franchising

Protection of Intellectual Property Rights

Why is a franchising law required?

Application of Multiple Legislation Absence of Disclosure Requirements

Applicability of Laws of other Countries

Lack of Proper Format for Franchising Agreements Liability of Parties Uncertain

Thank You!