How to overcome key challenges in franchising?

Finding a right franchise partner, lack of skilled staff and rising real estate cost are among the common challenges faced by franchisors across India. We find out gravity of the problem and suggest a way out here.

According to recent reports, the Indian franchise industry is estimated at $24 billion with a healthy year-on-year growth of 30 per cent. Its size is estimated to touch $35 billion by 2020. The domestic franchise industry has grown manifold over the years with Indian and foreign companies expanding their business ventures via franchise route. The prospective entrepreneurs in India too have shown encouraging response by taking the franchise rights of different brands. With fast expansion of different companies, they are also facing several major challenges in their operations. Most of these roadblocks are common for the companies.

Lack of skilled workforce

Though India has the second largest population in the world but it lacks skilled people, which is the need of the hour. Although the Indian government has taken a note of scarcity of professional youth and has come up with National Skill Development Corporation (NSDC)

to create a large pool of skilled workforce but that is a gradual process. Be it beauty, fitness, F&B and or any other industry, people with basic education of the concerned category are less and a high attrition rate adds to the woes of the industry.

Sharing how his company is beating the problem of recruiting staff and high attrition rate, Kailash Shahani, Founder, Morpheus Human Consulting Pvt. Ltd, says, “We understood that hiring a staff for our franchisee was becoming a challenge for them and therefore sometime back we have created internal recruitment team dedicated to support our partners in their growth. We also face high attrition in this industry and therefore we need to be prepared for bench hiring which Morpheus is specialised in.”

Finding a right franchise partner

Many franchisors in India find it difficult to find the right kind of match to lead their brand in their respective areas. Many issues come up during the business partnership process.

Product customisation

Product customisation is also another challenge for the franchisors across sectors. In order to tailor the product according to customer needs is the key to success. Relevance is of utmost importance for the franchisors to thrive in the industry they are in. A slight change in the design or format of the product can make you stand exclusive in the industry. Ex- Subway bakes its own range of fresh breads which no one else does in the same category.

Real estate

At a time when our country is seeing a political slugfest over the issue of land acquisition bill, the franchising industry continues to face real estate challenges. Not just the soaring prices are making it tough for them to expand their operations in India but also the norms and lengthy procedures are proving to be a roadblock in the success of the industry.

Evolving your business according to the market and your franchisees can work your way. All you need is patience and should adopt new measures to strike a right balance. What should be heartening for the industry is the government launching NSDC and measures being taken to reform the land acquisition system. In the long run, these steps will work in favour of the industry too