Grocery Franchise in India: A Comprehensive Overview

Diving into the Grocery Franchise in India business is a good idea, but it is even better to know about the details so that your store can boom in no time. 

Currently, the Grocery Franchise in India is quite booming and most entrepreneurs investing in it are enjoying considerable profits. 

Right now, not even the not-so-popular cities are engulfed by supermarket chains despite the huge coronavirus hurdle. 

That is one of the reasons why more and more people are looking forward to investing in the retail chain and collaborating with a brand instead of starting right from scratch. 

Most people are in love with packaged stuff right now and hence they prefer visiting the supermarkets. 

Also, it seems to be a one-stop solution for the customers and they do not have to go to different locations for all their shopping needs. 

With the raging popularity of all these supermarket chains, it is now the perfect time to start thinking about owning a multi-unit franchise so that you can enjoy the profits in the long run. 

But before you spend your hard-earned money, you need to have a holistic overview of the Grocery Franchise in India and all that is there to know about them. 

First, you should take a look at the kind of models that you get to choose from. 

Types of Supermarket Models to Know About

Now you might be wondering what a Grocery Franchise in India model might include. 

In this business model, you get to choose the brand which will work as the umbrella. 

The parent company will set the guidelines and be a companion to set up your new unit. 

The brand will own the business name, and trademark as well as the regulatory terms and will also help you when it is about managing your store layout or even training your employees. 

In lieu of all that, you will have to pay an initial fee and the royalty based on the sales that happened in your store. 

This entrepreneurship model will help you distribute the store-building difficulties and you can avoid all the confusing legal and professional documentation. 

After all, it takes a team to build a unit!

Now we are going to talk about the different kinds of models that are a part of the grocery franchise in India business. 

Also Read: Starting A Supermarket Franchise In India- Tricks to get Optimum Success

Categories of Grocery Franchise in India Supermarket Franchise Models

1. Franchise Owned Franchise Operated

This is the first model that lets the franchisors take the lead and at the local level, they can be the deciding people. 

If you go for this model, you will have the freedom to make some of the decisions and change some strategies as needed. 

Being a local, you will be able to understand your customer needs more and make some innovative changes that will create a difference and enhance sales as well.

Some of the examples of chains that indulge in such a model are Subway and KFC. 

Advantages:

• You can make relevant decisions and change the business operations so you can enjoy a certain level of freedom. 
• The Grocery Franchise in India will be able to profit from the brand establishment and get considerable equity and recognition.
• In the local areas, you know what can attract customers better, and you can customise the promotional ideas accordingly. 
• Gain knowledge about the areawise best practices that can be beneficial for the business. 

 Disadvantages:

• Wrong decisions can hamper the specific store and cause obstacles in the profit-building sales number. 
• If there is a change in the training, it can differ a lot from the standard brand training guidelines. 
• If the royalty fees are high, the profit margin can become less with every passing date.
• There is a possibility of a legal dispute in case of violation of guidelines due to individual decisions.
• The brna dimage can be compromised because of a single-store issue. 

2. Company Owned Company Operated Model (COCO)

This is the model in which the parent company, or the brand owner decides every little thing in all its outlets and stores. 

Every single store is controlled under strict surveillance and the store owners have to adhere to the guidelines and implement strategies as suggested. 

Advantages:

•  There is a better chance of control over every single operation and it will ensure quality control over the products and services.
• There is no risk of losing the brand image just because a random store decided to violate the guidelines and do whatever they liked.
• There is strict control over the profits and there is no fluctuation when it comes to royalty. Therefore, the person who is investing will be able to see a better profit margin.
•  Even if something goes wrong, it will be the parent company that will be held accountable and not the new business owner.

Disadvantages:

• In this model, the franchiser needs to invest more to set up new units.
• It becomes quite a difficult task to manage outlets and can create a haywire situation.
• The franchiser can’t understand every local area and therefore there is a confinement in adaptability.
• It can be quite challenging to look after the operations of every single unit and is quite risky.

3. Company Owned Franchise Operated (COFO)

This is a unique business model in which the parent company or the franchisor owns the entire store but a Grocery Franchise in India is employed so that they can look after the business operations.

They used to maintain the guidelines and he will make sure that every regulation is being taken care of.

The decision-making is still with the franchiser even if the franchisee is the one on site.

Advantages:

•  The store operation is quite streamlined
• The franchise invests in the business so it is easier for the franchisor
• The brand can stick to the guidelines of the system
• The parent company supports the training and day-to-day operation so that the franchise can handle the store easily
• The franchise can enjoy the brand reputation and a solid track record.

Disadvantages:

• There can be differences in opinion among the franchiser and franchisee
• It can be tiresome for the brand to offer constant support at all times
• It can be difficult to hire resources for all the outlets and train them efficiently     

4. Franchise Owned Company Operated (COFO)

This is an old-school business model in which the Grocery Franchise in India invests as well as owns the brand- not to forget looking after the daily operations.

In this way, the franchisees can operate under the umbrella of a well-known brand and enjoy its popularity from day one.

Advantages:

• Right from the beginning, the business owner can get the companionship of the company.
• The Grocery Franchise in India does not have to undergo many hassles because the franchisor takes care of most of the store setup and training.
• Both parties work together for the holistic success of the brand and to enhance the brand image.

Disadvantages:

• The franchise becomes completely dependent on the brand.
• There is no flexibility in decision-making for the Grocery Franchise in India owners. 

Some Critical Factors to Consider While Investing In The Franchise Business

Even if you are too keen on investing in a Grocery Franchise in India business, do not delve deep without knowing the factors to consider. Let us learn about them in a bit of detail:

1. Analyse Your Potential

Always try analysing how much capacity you have and what skills you possess. 

If you have a business background in a specific category, you will be able to understand the market more.

2. Setting your Goals is Essential

Before you talk to any franchise team, be very clear about your goals. 

Think about all the factors you are working for, like stable income, reputation, and rapid growth. 

Accordingly, you will be able to influence the brand so that it can help you fulfil your desires.

Also, you will be able to choose the right kind of business model if you know what to expect from the brand.

3. Availability

Before you choose any franchise model, gain knowledge about each type. 

When you know about all the available options for Grocery Franchise in India stores in India, you can make better choices that will work in your favour. 

Choosing the right brand will help you see the profits in the first year itself and also help you in the long run.

4. Conduct Proper Market Research 

try to do as much market research as possible so that you can understand what exactly your customer needs. 

Then you can arrange your store to the preferences and passing trends so that the sales can be higher. 

Always try to go for the brand that follows the law of customer orientation and you can have a store which will prove to be a one-stop solution for everyone.

5. Location is Important

Choose the location wisely so that the range of your target demographic can be huge. 

Therefore, you can bring in potential customers along with the ones who are already loyal to the brand. 

It will help in increasing the footfall and your business can be influential within no time.

6. Reading the Agreement Time and Again

documentation is the most crucial part when you are investing in a franchise business. 

Therefore you should be careful enough to read the agreement and again so that you are in sync with all the guidelines. 

If you are reluctant about something, be transparent to the parent company and come to a mutual agreement before signing the document.

7. Check the Support that you Receive 

The brand for which you will be investing in the franchise should be giving you optimum support at every level. 

Always check on the support system that you are getting so that you do not miss out on any department. 

Starting from the store layout to the marketing strategies and training system, you should be making the most out of the brand support. 

The more support you get the more you will be able to grow your business name stably and qualitatively.

Check out this: Advantages of Investing in Franchise in India

Frequently Asked Questions

1. In India, what are the most popular Grocery Franchises in India models available?

Talking about the big names you can always find franchisees from Big Bazar, Spencers and Reliance Fresh. These are some of the brands that will never disappoint you because they already have a very strong customer base.

2. When do you need a lot of capital even in the grocery franchisee business?

If you are trying to collaborate with global brands alongside Indian companies, then you have to possess huge capital.

3. In the small towns, which is the ideal business model to choose?

If you are starting your business in the local small markets, you should always try to cater to the local customers and further franchisee-owned franchisee operated model. This will give you flexibility to act according to the local demands.

4. How much can you expect from a grocery franchise in India in India?

You can expect an approximate of 5% to 20% of the sales which is a pretty good profit margin.

5. What are the factors for choosing the location for a grocery franchise in India?

You have to understand the attitude of the local customers as well as analyse the rivalry. The store should be easily accessible and transportation should not be an issue. Also, make sure that there is a high population density in the area so that you can attract more customers in a short time.

6. What kind of support can you expect from the franchiser brand when it comes to inventory management? 

You can get ample support regarding product supply, selection of the prime products, order packing and delivery system as well as stock surveillance.

7. What criteria do you need to follow to own a supermarket franchise?

You need the investment capital as well as a stable financial flow to keep the store up and running. Also, you should be experienced in the field of retail and understand legal agreements properly. A rule-abiding person is always better so that they can maintain the guidelines and fall under the eligibility criteria of the brand. 

Final words

It is easy to open a grocery franchise in India and even a multi-unit organisation. 

But you have to know about the confinements and benefits of all the business models before making the smart move. 

This way you can get the most profit with minimum risk associated.