McDonald’s burgers, Bata shoes, Titan watches – household names with stores on most of the India’s main streets. But rather than run the operations themselves, these popular brands are using franchises to access the Indian market – and other businesses are catching on.
Operating via franchise, a business structure where companies licence out the right to sell products or provide services in their name, allows businesses to expand rapidly. A report suggests that total sales made through franchisees in India, valued at $13.4bn in 2012, will quadruple by 2017.
South African-based restaurant chain Nandos looked set to take flight in India, taking advantage of the nation’s booming restaurant scene and an emerging middle class with a well-developed taste for spicy food — and as a result attracting interest from international investors.
But now beyondbrics has learnt that an attempt by private equity group New Silk Route to acquire a majority stake in the group’s Indian franchise has fallen through — raising questions about Nando’s future expansion plans in Asia’s third largest economy.
By Terrence Edwards of bne
Mongolia is following the footsteps of its largest trading partner, China, whose first western food chain in 1987 was Yum! Brands’ KFC. Now Mongolia’s Tavan Bogd Group has attained franchise rights to the restaurant chain, though the success of fast food in this fast-developing frontier market has so far been mixed.