Mahindra First Choice Services introduces Franchise Owned and Franchise Operated (FOFO) model

Jaipur: India's leading multi-brand car workshop company, Mahindra First Choice Services (MFCS) is now looking forward to expand its presence through the franchise model. The home grown auto maker has already appointed 10 franchisees in Chennai. The first of these outlets is KLN Motor Agencies at Ekkattuthangal which was inaugurated by YVS Vijay Kumar, CEO, Mahindra First Choice Services. MFCS as a network of  28 Company owned Company Operated (COCO) workshops across the country.

On the auspicious occasion of inauguration, Mr. Vijay Kumar said, “With a car population of over 6,00,000, and a culture of strong process adherence, Chennai was the logical choice for us to establish our first franchisee workshop. Moreover, we already have a strong network in the city with three COCO workshops at Ambattur, Guindy and Nerkundram. With its strategic location and local knowledge, KLN Motor Agency will help MFCS to further enhance its reach and reputation as its franchisee partner.We have also appointed 10 additional franchisee workshops in the Chennai cluster which are all set to commence operations in the next three months. MFCS is also actively exploring newer regions like Mumbai, Pune, Delhi NCR and Punjab and Karnataka which will help us meet our target of 100 plus workshops by the end of this fiscal. This will enable us to enhance the scale and depth of our operations, allowing us to reach a greater number of potential customers and most importantly, provide us with economies of scale.”
With a strong reach of over 180,000 customers, MFCS believes that it has a strong proposition for a franchisee which can be easily met by the 28 operational COCO (Company Owned Company Operated) workshops . The company has a strong spares supply chain of quality spare parts, skilled technical staff, state-of-the art equipment, robust processes and on the top of a free pick up and drop facility. Customer can also book online getting their car serviced. Through these workshops, the auto-maker looks forward to offer a simplified business model in the servicing of cars from different brands.

Anu Solar to take franchise route to open 2,000 solar product stores

Solar powered electronic products will now be available at retail stores across the country. These stores will sell varied products ranging from solar water heaters to solar powered calculators, caps with fans that run on solar power, solar power storing batteries and inverters. Bangalore-based Anu Solar pvt ltd, a leading manufacturer and seller of solar products, will open 2,000 stores across India on franchisee basis. 

"These will be called 'one-stop experience stores' as the store and all the office equipments will also run on solar power, in order to show the public, the use and benefits of solar power," said T J Joseph, managing director, Anu Solar. 

The government wants to encourage the use of solar energy but currently there are no private retailers for solar products. 

The ministry of new and renewable energy has been promoting private entrepreneurs to open 'Akshay Urja shops' to sell and promote solar products but since 2002, only 300 shops have been established across the country and a good number of them are not functioning and there is no shop in the capital. 

"We want the public to experience the power of solar and also raise awareness for the same," said Joseph. For Delhi, Joseph said there was an expression of interest from a client who plans to open 40 retail stores. 

The company plans to make at least 20 stores operational by the end of the year, including one each in Bangalore and Madurai by September. With an investment of around Rs 25 lakh per store, the turnover expected is Rs 6 crore per year per store. By the end of the current financial year, the company hopes to open 50 stores. 

These stores will sell a variety of products at MNRE subsidised rates. "As we are channel partners with MNRE, we provide government-approved subsidy on all products," said Joseph. 

Solar photovoltaic cells, solar power storing batteries, inverters, solar water heaters are some of the products which the company will propagate the most and major sales will depend on them.

Myth & reality of franchise business

The world over franchise business is being promoted as a safe and profitable business, with very high rate of success, compared to independent small businesses. However, the fact remains that the success rate of a franchise business depends on franchisee to franchisee. 

Among the many myths surrounding the franchise business, the first and foremost is that it’s a safe, risk-free business. Prospective franchisees should not develop any misunderstanding that franchising is a sure recipe for success. They should not get into this business merely on emotion and gut feel. Rather, should take an informed and careful decision before signing a brand. 

A prospective franchisee should carefully study the franchise model and go for the one which is easy to manage and where there is strong support from the franchisor. One must clearly understand that the success of franchise system depends on the efficacy of the franchise system and how religiously one follows it. Feedback from existing franchisees of the brand will give prospective franchisee a fair idea about the success of the franchise system. The success or failure of any franchise business depends a lot on the franchisee. If a weak or unsuitable franchisee without any interest or knowledge of a particular category of business gets into the franchise system in the absence of a relevant selection criteria or procedures, surely, it’s a weak foundation for that franchisee business. 

Many people get into franchising, holding a myth that anyone can make a success of franchise business and that they can make good money in short time by putting in lesser amount of efforts, compared to independent business. If you get into franchise business on this wrong promise and with unrealistic expectations, you are bound to tread on a risky road that may not lead you to success. 

Those desirous of getting into franchise business should be fully aware of its pitfalls. They must realise that like an independent business, they require sufficient working capital with family and social support. 

Another significant aspect of franchise business is that the prospective franchisees must have interest in their line of business and possess temperament and skill to engage with the team as well as with customers. Those having strong independent personality/outlook, may not fit into the franchise culture/system. If they want to make success of their business, they will have to learn to make adjustments. They should also have patience to build on the business. Before getting into franchise business, one must realise that his relationship with his franchisor is the key to the success of his venture. And the success of his business will depend on how well he manages this relationship. 

Business acumen is an important asset of a franchisee. And it surely adds to the chances of success in business if the franchisee has previous experience of running business. Work ethics, organisational and leadership skills and customer-focussed approach with the ability to communicate and network are the assets of a successful franchisee. 

In short, with business minded approach, constructive franchise relationship and vision for the future of his business, an entrepreneur can make his franchise business successful. 

Marketing Strategy In Franchise Business

The development of franchise business that recently began to mushroom, making competition increasingly stringent franchise business. Every day came the new franchisor that does not directly increase the number of franchisees in the market, so competition among businesses today increasingly high. Without a workable marketing strategy, a brand franchise could die in the midst of a brand new competition which is now beginning to emerge.

Although currently many franchisors that offer investment partnerships with the support of several marketing tools, such as X-banner, Both interesting, attractive product packaging, brochures, etc., but in fact the partners are still many difficulties to face intense competition in local markets are pretty solid. Therefore, to assist the franchisee to join a particular partnership, we inform some of the following marketing strategies that can be done to support the development of your franchise product marketed.

1. Recognize the behavior of your potential customers and markets.
One of the keys to success in marketing a product that is to recognize the behavior of each consumer and the potential market that you can use. That way you can determine how the most appropriate promotional strategies to market products that you follow the franchise.

2. Ensuring Brand and unique look of your business
Value of the franchise business owned more than non-franchise business opportunity lies just on the strength of brand and appearance Both (establishments) are interesting. So try to keep the appearance of products as well as offering a brand that is truly unique and exciting, so that consumers do not hesitate to drop by at your outlet.

3. Use tools such as mass media campaigns that are around you.
Call it advertising on radio, television, business magazines, tabloids, newspapers, and many more electronic media and other print media that you can use to promote the franchise business is run.

4. Position yourself as a solution for your consumer problems.
By becoming an expert and offer products and services needed by the consumer, then your chances to take care consumers more wide open. So that customer loyalty will be built to strengthen the brand has to offer.

5. Maintain existing customer loyalty.
Your old customers become one of the assets that need to be maintained properly. Therefore, try to hold promotional activities on a regular basis, so that the loyalty of existing consumers is increasing.

6. Take advantage of online media for promotion
To this day not many franchise businesses are realizing the importance of online marketing, but every day the number of Internet users has increased quite sharply. Sure you can use this as a potential market opportunities. For example just by creating a website or joining an existing business forum on the internet.

7. Direct approach to the consumer.
This strategy can do by interacting directly to consumers, and asked consumers to write testimonials (comments or feedback) after they use the product or service offered by your franchise. Because the testimony of the consumer to be part of a promotional tool that can support the marketing word of mouth (from mouth to mouth).

Hopefully the information about the marketing strategy in business franchise can be useful to readers and help the franchisee in marketing their products. There is always a way if we are always willing to try

Aadhaar Retailing aims to break even in a year

Aadhar Retailing, the rural retail joint venture between Future group & the $3.3 billion Godrej group, is embarking on a restructuring exercise for the loss making chain that aims for a break even level of operations in a year, Financial Chronicle reported, citing senior officials at Future Group. Meanwhile, the company is looking to expand its retail network via franchise model.

“We will take around nine months to break even. While 35 per cent of our existing stores are profitable, we are expecting 35 per cent to break even in two-three months,” said a senior company official in the know of the development. On an overall basis the chain plans to achieve break even within a year.

For the financial year 2010-11, Aadhaar Retailing had sales of Rs 68 crore and a loss of Rs 20 crore. As of end of March 2011, the group had invested Rs 86.18 crore in this venture, which retails products such as apparel, seeds, fertilisers and FMCG products.

The group is trying to lure rural customers to stores with personalised communication via mobile messages, loyalty programmes instead of banking on print or television media. There is new technology in place to link up to the stores through the internet.

Kishore Biyani is trying to rationalise costs and rentals by relocating staff, hiring less qualified employees at the front-end and shutting down unviable stores. “We are trying to increase the sales throughput to be more profitable,” said a senior company official.

The group that currently has 40 stores of its rural retail chain plans to add 40 more over the next three months across clusters around districts in Punjab, Haryana and Gujarat, added the senior official. The first round of expansion would be around Gujarat and the second phase in Punjab. As part of its restructuring process, the group is trying to launch a wholesale format that would stock food and grocery. Each of the wholesale stores would have around 1,600 stock keeping units (SKUs) against typically 10,000 SKUs in a Big Bazaar, said another senior company official. The size of the retail store would be scaled down to 500-1,000 square feet from average 5,000 square feet.

The new model being piloted at Kalol in Gujarat, will see Aadhaar become a cross between a cash-and-carry store and a front-end retailer. Under the proposed pilot, the company will operate a hub and spoke model where its existing outlets will serve as supply hubs while the franchisee outlets will be spokes.

In a typical cash-and-carry format, the store serves as a front-end outlet to wholesale goods and services for commercial/industrial consumers and small store owners.

But the model Biyani is proposing involves Aadhaar also ensuring last mile delivery and working with small kirana outlet owners to run stores.

Gas Jeans targets tier-2 cities; seeks franchisees

Gas Jeans India Pvt Ltd, running on the wholesale cash and carry model, is planning to tap into the potential of tier-2 cities. Running on a franchise model with just three stores in Mumbai and Delhi, the premium denim brand is extending its reach beyond the metros to enter smaller cities such as Ludhiana, Pune, Chandigarh and Hyderabad. Gas intends launching 12 stores in the next three years and also turning profitable by the next fiscal.

“Tier-2 cities have the spending power and there are opportunities for the brand. We should start with the first store in Ludhiana followed by other cities like Pune and Chandigarh,” M M Kamath, director, Gas Jeans Pvt Ltd, told Business Line.

With a seed capital of Rs 6 crore, Gas is staying away from making big investments into the country till such time FDI is allowed. “All the 12 stores that were under the joint venture have been discontinued and today we run with minimal investments on the franchise model,” said Kamath.

Today the Gas brand is made at its home base in Italy along with other countries such as Tunisia and Romania in Eastern Europe. With steep import duties at 28 per cent, Gas is also looking at ways to reduce its dependence on imports. “There is a possibility of setting up a manufacturing base somewhere in South India in the future, but it is still early days to take a decision,” said Kamath.

There is also a likelihood of introducing online sales for the brand as it already has an e-commerce model in Italy.

Globally, Gas is a Rs 600-crore brand and in India the brand is aiming to achieve a turnover of Rs 40 crore by 2013.

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