Franchising to India
Trends and opportunities
India is witnessing a consumption boom fuelled by a demographic
transformation, with more than 550 million people under the age of 25 and
the Indian middle class projected to reach up to 540 million by 2025.
India’s fast-growing population of ultra-high-net worth individuals and a
highly aspirational young generation with disposable incomes present
opportunities for franchising Australian brands in India.
Franchising is a very popular business model in India, with more than 5,500
domestic and international franchise concepts in the market. The
liberalisation of the Indian economy in the 1990s led to the birth of the
franchise management model. Information technology companies and some
educational institutions were among the first to adopt this strategy to
expand to new geographies.
Today, food service businesses dominate the franchise scene in India.
Well-known international brands in the market include Starbucks, Subway, Domino’s Pizza, Pizza Hut, Burger King, Taco Bell, Nandos and Chilis.
According to a KPMG and Franchise Association of India (FAI)
report, the Indian franchise industry has the potential to grow from A$20
billion to A$72 billion in the next three years.
Many global brands are expanding their footprints in India through
franchising. They utilise the expertise and knowledge of local Indian
partners to navigate the market and consumer preferences. Some of the
popular non-food franchised brands are Miniso, Zara, L’Oréal, Chanel and Ralph Lauren.
India is an ideal testing ground for Australian franchise concepts. The
country is familiar with Australia through tourism, education, popular
television shows like
and a growing Indian diaspora in Australia.
There is a growing interest in India to franchise Australian brands in food
and beverage, retail, education, apparel, fashion, beauty and healthcare.
Indians’ embrace of new food concepts from across cultures dictates that
food and beverage franchises are most likely to gain the quickest
acceptance in the market. Australian franchises such as
Boost Juice, Coffee by Di Bella, Cookie Man, Patissez and Gloria Jean’s have
made in-roads into India, and broadly across South Asia.
Australian retail chain Boost Juice introduced the natural juice and
smoothies bar concept in India through a master franchise agreement with 35
outlets in New Delhi and Mumbai. Boost now has outlets at airports,
hospitals and shopping malls, and plans to expand to 100 stores by 2021.
While the outlook is skewed towards food and beverage franchises, there is
room for more service-oriented businesses with a unique selling proposition
that appeals to an increasingly sophisticated and cosmopolitan consumer
base. Australian franchises in the non-food sector include Forever New, Plus Fitness 24/7 Gyms and F45. Melbourne-based fashion brand
Forever New has over 50 stores across major cities in India.
Several international brands have chosen India to launch their franchise
concepts. The key competitors are mainly from the US and the UK. Local
brands are also potential competitors.
Notwithstanding stiff competition, there is a growing interest for creative
and unique franchise concepts in India.
Marketing your products and services
Australian companies should consider the following market entry strategies:
Work with a local partner. Austrade can help find qualified partners
based on the requirements of Australian companies.
Visit or participate in franchising and licensing exhibitions in India.
Visit the market or participate in Austrade’s outbound business
missions to India.
Consider the following when marketing your products and services:
Get your concept right before venturing offshore.
Choose the right partner – they are the custodians of your brand and
the first contact that comes along is not always the right one.
Ensure systems and training are implemented in accordance with the
Support your partner to establish their (your) business.
Seek advice from lawyers, consultants, peers and Austrade. Preparing
the ground with a tested concept and market research takes time and
money – spend both wisely.
Franchisors may also find it useful to use the services of experienced
Indian franchise consultants and lawyers. Austrade can recommend qualified
consultants and lawyers to vet your legal documents.
Below are some of the key challenges that Australian companies should be
Linguistic/ cultural differences:
Understanding local culture and tastes and innovative strategies like the
‘Indianisation’ of products is vital to a franchise’s success. An example
of successful ‘Indianisation’ can be seen in the fast food sector.
Companies such as McDonald’s and Pizza Hut have developed special menus to
cater to the Indian palate, which is predominantly vegetarian.
Expensive real estate:
In large cities, retail space is expensive and scarce, and the quality of
real estate is relatively poor. Outdated rent control laws make locating a
suitable and affordable location difficult.
Resistance to fees and cap on royalties:
Indians are tough negotiators, and Australian franchisors should be
prepared to face stiff resistance from prospective Indian franchisees
towards franchise fees and royalty payments, which are considered high by
Tariffs, regulations and customs
There is no franchising code or act in India. The relationship between
franchisor and franchisee is governed by general contract law, which is
based on the English common law and therefore quite similar to Australian
contract law. Although the Indian legal system is known for its
transparency and fairness, franchisors should still carry out a due
diligence investigation on their franchisee and previous or ongoing
General custom duties will apply on products sourced from Australia for the
As in any country, the following factors need to be considered when
establishing a franchise in India:
Conduct background checks:
Check for capacity, capability and genuine interest in operating and
expanding the franchise.
Analyse market conditions:
Success in Australia or other Western markets does not necessarily
spell success in India. Certain adjustments may have to be made to
fine-tune the concepts for this market. Be open to the opinions of the
potential franchisee, bearing in mind the need to maintain your key
Protect your intellectual property:
Franchisors must ensure they do the necessary paperwork to protect
their business concepts in the market.
Links and industry contacts
Franchising Association of India
Government, business and trade resources for India
India Brand Equity Foundation
 Credit Suisse, Global Wealth Report 2018, India, October 2018
 Franchise India, accessed July 2019
 KPMG & Franchising Association of India, Collaborating for growth,
Please note: This list of websites and resources is not definitive. Inclusion in this list does not imply endorsement by Austrade. The information provided is a guide only. The content is for information and carries no warranty; as such, the addressee must exercise their own discretion in its use. Australia’s anti-bribery laws apply overseas and Austrade will not provide business related services to any party who breaches the law and will report credible evidence of any breach. For further information, please see foreign bribery information and awareness pack.
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