In advance of the publication of 2011’s Top 100 Global Franchises, we’re putting a lot of focus on international franchising here on the Franchise Direct blog. Yesterday, we discussed the rise of franchising in Latin America. Today we’d like to talk about how QSR franchises are taking on India.
I blogged a lot about American franchises in India while I was in Mumbai and New Delhi last year. Interestingly news comes to us now that more US food franchises will be launching ventures on the Indian subcontinent. Denny’s, Rita’s, Pollo Tropical, Applebee’s and Johnny Rockets are among the franchises who have revealed serious intentions for expanding into the $13 billion Indian quick service restaurant market.
The Baltimore Sun broke the story this week and provided the following breakdown of the Indian franchise market.
India caps foreign ownership in single brand retail at 51 percent, forcing all foreign chains to seek partnerships to do business in the nation of 1.2 billion people. The franchise owners plan to meet the Ministry of Commerce and Industry and the Ministry of Corporate Affairs in the coming days. The franchise market in India, estimated to be worth $3.3 billion, is growing at a rate of 30 percent.
These franchises have clearly done their math and see India as a great place to expand. The challenge is two-fold: to find franchisees that work as a buffer between an international business and a community, and then to tailor the food franchise to the local market. Denny’s have already said they will drop pork and beef from their menu, which is a positive sign of cultural sensitivity. International expansion is a challenging process, but as the top franchises on the Top 100 prove, it can be done.