Tamil Nadu Food and Beverage, service sector headed for boom time in franchise model: Expert

With two decades of experience under his belt in the franchising industry, Rajendran says, Tamil Nadu is on top of the franchising food chain as far as the salons and grooming industry is concerned, with operators like Naturals and Green Trends ruling the roost. The other growth areas include retail and education, especially in the entrance exam coaching and training sectors.

Giving us a lowdown on the direction in which franchising is heading in Tamil Nadu, and pan-India, Rajendran, whose company has been associated with brands such as Madras Coffee House, Just Kulfi, The Kati Roll Shop, and has been involved in signing more than 100 franchisees in four years tells us, “There are as many as 4,500 brands available in India which are ready to be franchised in a big way. While markets like USA and Australia are matured and primed for the model, India still has a long way to go as there are no regulations governing the operations of a franchised outlet in the country. There are 200-odd major brands in Tamil Nadu that are looking for franchisee operators. A chunk of them are in the F&B space and the beauty and grooming sector.”

He goes on to add, “Take for instance, brands like Madras Coffee House, which has about 100 kiosks across India and has a presence in Dubai as well. Similarly brands such as Adyar Ananda Bhavan (A2B), Anjappar, Sangeetha are doing well using the franchise model. Naturals and Green Trends have close to 600 and 300 franchisees pan India while Tony & Guy has close to 100 units across South India. Having said that, in the overall pie, only 60 per cent of franchisees are able to continue beyond the first year or so. The rest all end up shutting shop due to mounting operational expenses.”

While Rajendran has currently signed on 7 brands in the UAE, which he intends on to handhold through the franchisee set up cycle, he clues us in how F&B franchisees in Chennai are adapting to the onslaught of food delivery giants such as Zomato and Swiggy. He says, “Most F&B franchisees in TN are now looking for quick service restaurants (QSRs) which are 500 sq ft or lesser. That’s because only 60 per cent of the clientele opt for dining in. The remaining 40 pc choose aggregators and prefer to stay home, which essentially means franchisees won’t need to invest heavily in shop floor space or bear the brunt of unnecessary overheads.”