Entrepreneurship will flourish in India now

India's franchise sector is $80 billion industry growing at 25-30 per cent annually. Fuelling its growth is the sheer demand for owning a business. Aspiration of India has changed. Leading the country towards this change over a period of over 25 years is Gaurav Marya who as a teenage student opened his first enterprise while studying at an engineering college in early 1990s. After dropping out of college, he set up businesses in mobile phones, restaurants among others. In 1999, he founded Franchise India Holdings Limited, presently Asia's largest integrated franchise solution company.

Also a serial entrepreneur now, Marya has assisted more than 200 international companies enter the Indian market. In a freewheeling chat with The Hans India in Hyderabad recently, Gaurav Marya, Founder & Chairman, Franchise India, spoke about his plan for democratising entrepreneurship and the growth map of the franchise sector.

Could you tell us about the reason behind your visit to Hyderabad…

I call this as a 'Discovery Day,'wherein I visit a city to discover its entrepreneurial market.There are only two States in India which are proactive in building the ecosystem for entrepreneurship and the needed infrastructure for its growth. Besidesthe prime ministers's home-grown State Gujarat, the only other city to competeis Telangana's Hyderabad. Speaking about Hyderabad, I feel fuelling the growth of entrepreneur ecosystem in this city is the great administration, great government, and great outlook towards entrepreneurship.

How has franchise sector evolved over the period?

Earlier, resellers and distributors worked on the same line of franchising, but consumers missed out on the multi-brand store experience. That is when the brands realised that they wanted to create unique experience running consistently across all their stores. This led to the transformation of distribution franchise to a business format franchise, which started in early 2000s. Currently there are over 2.5 lakh business format franchises operating across India in the fields of education to fashion. Many technology-centric businesses are emerging now leading consumer interface to be taken over by technology.

Franchise Vs Retail sector…what is your take?

60 per cent of entrepreneurs in the country are first-generation business owners. For them, opening a franchise store is a safe bet. Moreover, though India is geographically dynamic, only top few cities are employment generators. Here franchising becomes exciting due to its ability to generate business and white-collar job opportunities in tier II, III and the rural market too.

Is franchising profitable beyond cities?

In first 100 cities of India, every food brand, school chain, clothing brand, jewellery line, after sales vehicle service centre among others want to be there. Beyond these 100 cities, factors such as supply chain, market opportunity play a major role for brands to decide on entering these markets. I believe, going ahead, India is 900 cities franchise opportunity as our country has a bigger consumption cycle surpassing China. Also, the governments focus on building infrastructure along national highways, is opening up these villages to new markets. In the next few years, electric vehicles will have the highest number of franchise outlets open across the country.

Are global brands entering India bringing competition for home-grown brands?

90 per cent of India uses domestic brands. It will always be so. I see an opportunity for Indian brands going global. Tanishq has started franchising in America. they just opened a store in New Jersey which was not covered in media. We should be proud that we are taking our brands to the world. In the next five years, India would be big export market of franchising. I am now working on taking Indian brands global.

What are you working on lately?

We are bringing 10 international companies to India. We have signed up one of the leading UK language-based company called Direct English. Education and skilling are our focus areas for this quarter. We will continue to bring in the best names. Apart from big universities, our country also needs lot of skills which would be needed in our industry. My thoughts are that franchising is a great strategy which aims toward building emerging future ready businesses.

What are your plans for Franchising sector in India?

Our mission is to democratise entrepreneurship, which means people can start their entrepreneurial journey, even with little financing. We are working with banks, institutions, government bodies, MSME's to bring in easy financing options. Franchise India on individual terms will invest in 25 new startups this year. We will fund each business with around Rs 10 -12 lakh, while the entrepreneur can get Rs 3 lakh. The startup will be selected on the basis of business plan, entrepreneur's education, location of the business etc. The second aspect is education in entrepreneurship which should basically start at an age of 11–12 years. We are reaching out to policy makers, governments to establish a school for entrepreneurship.

What is your expectation from the Central and State government?

The governments needs to create ease of financing and provide cheaper finance options to people if it wants to nurture entrepreneurship in the country. Businesses die mostly because of high cost of capital. A first generation entrepreneur can't avail loan due to the requirement of the collateral security. In India, bankers would prefer giving a lakh crore to big names but not for small businesses. Big businesses even have the leverage to negotiate on financing terms. The government brought out financing schemes of smaller ticket size, but I feel the allocation of loans itself is not apt. My second expectation from the government is to create genuine and good infrastructure. In last few years, we have been able to witness the governments' push for infrastructure growth.

Your advice to first generation entrepreneurs…

Entrepreneur journey comes with what I have coined as 'DATE' - Discipline, Accountability, Training and Encouragement. When an entrepreneur starts the journey, he or she needs to remember to be disciplined in the approach, be accountable for decisions, be well trained about the sector and to not expect encouragement from others. Franchising means being on job in your own business. Franchise India from the last 25 years has been working to achieve growth in the franchise sector. I feel the time has come now for the entrepreneurship to flourish in India.