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Franchising in India, Part 1: The Context

For years now, we have been hearing that the 21st century will be the Asian Century, lead by China and India. You read this claim so often in the business pages of the international newspapers, you sometimes begin to wonder if it is merely hype. I was fortunate enough to visit Mumbai and New Delhi recently and can say with some confidence that the future of business lies in India, especially where franchising is concerned.


Before I discuss my own experiences, let’s just state some of the reasons why franchising is working in India and certain to grow in the coming years. This is a country of over 1billion people. There are more than 3 times as many people living in India compared with America. In a few decades, it will be the third largest economy in the world.

Now India may have a huge population, but that’s not the whole reason why it is so ripe for franchising. India’s rise is being driven by a rising middle class who are increasingly looking to the west, and to the US especially, for cultural input. I had the pleasure of sampling New Delhi nightlife and it was remarkable just how similar Indian nightclubs were to American ones. Much of this wealthy young generation of Indians has spent time in the US or the UK and picked up a taste and an interest for Western goods, foods and services. Foreign investors should also note that India is a country with a historical relationship with the English language and a decidedly pro-business, low-tax ethos. I was there on Budget Day and it was remarkable to witness the hundreds of media outlets debating the various points of the budget.

On the other hand, it is still a country weighed down by bureaucracy and with corruption issues at grassroots political levels, but India’s business practices have come on by leaps and bounds in recent decades. There are also some pretty vast cultural divides between India and the West, but perhaps the spread of wealth will shrink this gap. With a vital national entrepreneurial spirit, compared to other developing economies, one thing is sure- India is open for business. As for the franchising scene, it is growing fast. I traveled around Mumbai and New Delhi, largely on foot. The franchises that I encountered, both Indian and foreign, were mostly food franchises. UPS and a few other shipping franchises are also set up on the ground. Many people still choose to eat from vendors on the side of the road, but more and more people are looking for cheaper, Western food. I’m proud to say my first meal in India was from a franchise operation: Felafal’s Veg Hummous House, a very clean and air-conditioned restaurant on the Colaba Causeway, one of main arteries around Mumbai’s big tourist area. The food was cooked quickly and with a coke, the meal only cost about 90 rupees, which is less that two dollars. I was fully satisfied and I was thanked by management on my way out the door. It couldn't have been a better experience. In the coming days, visit the blog as I’ll be providing more insight on my travels through Indian franchising. Our next post will be about the experience of McDonald’s in India.
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