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Three Trends to Look for if You’re Interested in Food Franchising in India

June 5, 2015

A close look at the restaurant franchise industry in India paints an interesting story. Now, more than ever, owning a franchise-based restaurant or food business in India is looking like an excellent opportunity. 

Food franchise India
Changing Perspectives

Lately there has been a sharp increase in the number of food franchises in India, as more companies from the US and Europe look for enthusiastic franchise partners in this country to fuel their growth in new markets. From an Indian franchisee's point of view, franchising is an attractive proposition. It gives a chance to benefit from the well-known brand name, proven business model, first-class training, and support that global companies provide.

As a potential investor, there are a number of food franchise opportunities that you can invest in to capitalise on this rising trend in food franchising in India.

Three Trends of Food Franchising in India

If you are thinking about becoming a new franchisee, look at the successful food franchises in the recent past and study a few things. What is good about them? What is not? Which regional and nationally recognised brands are serving an established customer base? Who are the new and upcoming brands in the market?

Now, let us look at some trends and highlights.

Trend One: The Pioneers Are Still There and Doing Well

Popular American QSR (quick service restaurant) brands opened their first stores in India in the mid-1990s and the early 2000s. Despite competition from new entrants, they continue to do well across different parts of the country, and are still going strong. With many cities and towns still untapped, it is no wonder that they want to diversify into every nook and cranny of this vast country in the near future. They hope that Indians will continue to embrace them.

Trend Two: Western Brands Continue to Reinvent Themselves

Even though Western fast food joints can find it a little tricky initially to navigate through a whole raft of problems – for example catering to Indian tastes – they have always been ready to rise to the challenge.

They bite the bullet and customise their branding, tweak their offerings, and give their menus a new makeover to keep ahead of competition and establish their base in India. An example is McDonald’s, the standard-bearer of the hamburger, who showed that they were ready to bow to local demand by opening meat-free restaurants in 2012.

Trend Three: More QSRs Now Jumping on the Bandwagon

2014 saw the entry of more overseas fast food brands into India, some planning to expand across the country and open 100 outlets in the next few years.

Research suggests that the fast food market in India is likely to hit the $27.5 billion mark in the next five years. So you can expect to see more companies setting up shop in India in a few years' time.

Why is the Indian Market Hot?

Food franchises India

With more than half the population in their 20s, a growing middle class, increasing disposable incomes, changing lifestyles, and ongoing urbanisation, India certainly enjoys demographic patterns that are conducive to any QSR business.

Highlight: a recent study suggests that a strong change in consumer behaviour and demography will cause the industry to grow at an impressive CAGR of 18% by the end of this decade.

So, Where’s the Growth This Year?

Consumers in India seem to be moving towards consuming healthier food items, thus making popular franchises such as Subway big gainers in the market. Meanwhile, in metro cities, designer foodstuffs are gaining a lot of power. In Chennai, pizza, doughnut, confection, and sub and specialty sandwich shops are thriving, as they provide upscale forms of dietary staples.

To keep consumers’ appetites satisfied, food franchises in India are coming up with an assortment of new and interesting menu options – including healthy ingredients like spinach – that capitalise on the growing awareness of the risks related to a high fat diet.

Closing Thoughts…

Fast food and restaurant franchising is here to stay.

From fast food business opportunities to gourmet foods franchises, there are several things to learn about before signing that all-important franchise deal. No matter what kind of franchise you are interested in pursuing, make sure to do your homework before investing. It helps to read the legal documents of the franchisor, consult with an accountant and a lawyer, and approach existing franchisees to figure out if the franchising opportunity is right for you.

If you are all set to take the plunge, look at the franchise landscape and choose your point of entry carefully. The word is that there is no time like the present to catch the trend wave of franchising and ride it to success.

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