Franchising industry on a growth track in India

India’s franchising industry is expected to experience an

above average growth rate between 2012 and 2017, across all sectors. As per KPMG estimates the franchising industry is expected to witness a compounded annual growth rate of 30 percent over the next five years.

The franchising industry in India has the potential to grow to 50 billion dollars (Rs 3,00,450 crores) in the next half decade, from 13.4 billion dollars (Rs 80,520 crores) in 2012, predicts KPMG India deputy CEO Dinesh Kanabar. The industry is expected to create job opportunities for an additional 11 million people by 2017. There is scope for franchising industry to contribute almost four per cent of India's GDP in 2017, from a current estimate of 1.4 percent.

The services sector, which includes the likes of financial services, health and wellness, is expected to contribute the majority of the growth in franchising in the next half decade. Franchisees in these areas are expected to form around 55 percent of total estimated franchisees in 2017.

Retail (which includes sectors such as apparels, jewellery, neighborhood stores, food and grocery) and education are expected to be the other major areas where there is huge scope for franchising to succeed. Allowing FDI in single brand and multi-brand retail is expected to generate interest among large international players to adopt the franchising route to enter and expand in the country, says KPMG. Growth in the franchising industry will also be driven by rising income and expenditure levels of the young population, it adds.