The Franchising Association of India (FAI) is an Industry Association for the $4 billion Franchise sector of the economy, growing at a rate of about 30% annually in India.FAI is an Association of Franchisors, Franchisees and all related interests and is the only professionally managed and internationally recognized body of its type and is the sole representative voice of the Franchise Industry in India.
FAI was formed in the year 2001 as a not-for-profit Industry association under Section 25 of Indian Companies Act. 1956, with the objectives that include:
1. To promote the concept of Franchising and to establish standards of International best practice in business format Franchising for Indian Franchise systems.
2. To run and promote education courses on Franchising for the benefit of potential Franchisees and Franchisors and for the Franchising community at large.
3. To educate state and central governments on issues relevant to the sector and to be
the recognized voice of the Industry with regard to Franchising Laws, regulations
and otherwise.
4. To develop a vital, strong and financially viable Franchising sector.
5. To advance the interests of members in India in special interest markets such as the International Franchise community.
6. To continually foster among consumers, governments and the business community, a broad-based understanding of the concepts related to Franchising and the International best practice.
7. To design efficient, identified value-added services to members and assist them to be more effective in Franchising.
8. To provide opportunities to members for showcasing their expertise and business opportunities through officially supported Franchising events.
9. To provide information to its members on developments in the sector through its publications and newsletters.
Membership of the Franchising Association of India (FAI) is voluntary, and is open to any organization or individual involved in the Franchise sector, including franchisees, franchisors, lawyers, accountants, banks, consultants, academics, and publishers. For more information on FAI Membership and how to join, please visit the website www.fai.co.in.
The Franchising Association of India is committed to strengthening and promoting the best practices in Franchising and the activities will thus include providing educational programs, offering marketing services and networking opportunities that bring together the top creative thinkers and Franchise veterans to talk about the most important issues affecting Franchising. FAI being a member of World Franchise Council is also associated with Franchising Associations of other countries. FAI has formed various committees for increased participation of the members for further and orderly development of the Franchising Industry in India.
FAI is the best place for professionals to meet their counterparts in other Franchise systems and other business people offering services in the sector. By joining the Association, member Franchises and service providers get their name out into the community to help in building their reputation among their peers. FAI provides opportunities for the Franchise businesses to seek complementary business associates to form strategic alliances.
The Association provides members opportunities to showcase their expertise through officially supported FAI events. By doing so FAI is fulfilling an important mandate to promote the benefits of Franchising to the public at large by creating forums for the most highly regarded professionals and experts in the industry.
The world is changing all around us. To continue to thrive as an Association over the next ten years and beyond, we must look ahead, understand the trends and forces that will shape our performance in the future and move swiftly to prepare for what's to come. In short, for tomorrow we must get ready today.
That's what our Vision is all about. It creates a long-term destination for our business and provides us with a "Roadmap" for winning together with our members and partners. Besides, FAI's long-term vision includes becoming one of the top global Associations “by leveraging our expertise in the higher growth emerging markets”.
Our Roadmap starts with our mission, which is enduring. It declares our purpose as an Association and serves as the standard against which we weigh our actions and decisions. Our activities thus include exchange and safeguard of the business environment for Franchising, both with regard to Franchisors and Franchisees, act as the resource centre for current and prospective Franchisors, Franchisees, the media and the Government, disseminate knowledge to promote the concept of 'Franchising' and propagate the related healthy business practices, establish a forum for discussion and deliberation on Franchising related matters and problems and help promote the interest of members by organizing seminars, Conferences and meetings- in short to create value and make a difference in the practice of and growth of Franchising in India.
The Franchising industry is in its early stages of growth in India, though it is increasingly becoming a popular and a win –win business model because it provides the Franchisor to expand its business with least capital cost and it provides the Franchisee with a more assured chance of success because of the backing of the brand, the business format and the related training and other support that he gets from the Franchisor on an ongoing basis. This is indicated by the following facts.
- There are approximately 1200 national and international business format Franchise systems (means that many brands) are currently operating in India
- More than 35 sectors have Franchising working as a successful business model in them
- There are an estimated 90,000 units operating in business format Franchises
- Some 1 million persons are employed in business format Franchise organizations
- Annual turnover of the Franchising sector is approximately US$ 4 billion
- Franchising contributes less than 4 per cent to India’s retailing sector turnover
- (while in advanced economies like the US it is more like 50%)
- Around 8 to 10 per cent of the Indian Franchise systems have entered international markets
A flourishing class of urban consumers possessing considerable amounts of disposable income together with the continued growth of the economy have strengthened India’s claim to be an attractive and beneficial destination for a foreign Franchisors because Franchising as a marketing format is a very powerful way of retailing goods and services.
India’s Franchising sector is considered to be the country’s second fastest-growing industry. With a population of l.12 billion people at present to l.26 billion by 2016, the economy is booming with the proliferation of entrepreneurial opportunities and free enterprise. India’s projected economic prosperity is likely to be spearheaded by a real GDP growth of 8-9 per cent with a possible annual per capita income of US$ l, 000 by 2012. This macro growth would entail significant sub-trends like an increase in high-income households, led primarily by urban India. Between 2005-06 and 2013-14, the number of households with annual income greater than US$24,000 will grow nearly fourfold. Within this band, there are 3.4 million households with an income in excess of US$ 48,000 at 2005-06 prices. This segment is likely to include more than 15 million people, greater than the population of Denmark, Finland and Ireland put together. This combination of economic growth, booming retail and real estate combined with emerging entrepreneurship will continue to give rise to a huge potential in the Franchising sector. The most promising sectors include food & beverages, education, professional services, apparel, stationery and gift shops, entertainment and fitness, healthcare and wellness.
As a forward integration, FAI has entered into a strategic alliance with Images Franchising Management Pvt. Ltd., a part of the Images Group, with the objective of providing various mediums of education, research and networking to the Franchising industry in India through the following services:
- Annual International and Regional Franchising Events in India
- Monthly Magazine on Franchising
- Monthly Newsletter on FAI – Franchising Focus
- Web
- Education and Training
- As member of World Franchise Council
World Franchise council is an amicable and non political Association of National Franchise Associations with full support of the International Franchise Association (the largest US Association called the IFA) and is also supported by the European Franchise Federation. WFC is registered as a non profit organization under UK law. Full membership of WFC is open to all National Franchise Associations and its Constitution requires a subscribing membership and a governing body which is in the majority comprises of franchising companies.
Only one National Franchise Association is recognized by WFC for each country and FAI in India is the only association which is member of WFC for the last over 10 years. FAI is thus connected through the WFC Membership with member Franchising Associations of over 40 other countries in the world.
FAI is also a member of Asia-Pacific Franchise Confederation (APFC), an amicable, non-political association of NFAs around the Asia-Pacific region. Formed on September 24, 1998, the objectives of APFC are to provide a forum with properly constituted NFAs in the Asia-Pacific region where they can share experience, information and technical “know-how” on Franchising, including the establishment of better communication channels among members. For each country, only one national Franchise association is recognised by the APFC. FAI is the only member of APFC from India.
FAI and The Institute of Certified Franchise Executives (ICFE) in the US has tied up to launch the Certified Franchise Executive (CFE) course in India for providing a formal education programme for the benefit of many young and even experienced people to acquire knowledge and qualification in the field of Franchising as the projected growth of this sector offers enormous opportunities for new jobs and careers in this area.
The ICFE is governed by a peer-led board of directors, who themselves have completed the CFE program and includes representatives from academia. To be awarded the CFE certification degree (recognized by Wasington University) individuals must complete an extensive online course of study, and meet experience, participation and ethics requirements as established by the ICFE board of governors. The CFE program offers Franchise executives an established curriculum taught by recognised experts in the field.
FAI has been doing commendable work in the area of educating and interacting with the Government agencies like the RBI with regard to liberalizing the rules for foreign remittances related to foreign Franchisors entering India. As a result, all the earlier curbs and caps on remittances have now been withdrawn.
While the current Trade Marks Act and the law of Contracts provide sufficient protection to the Franchisors and the Franchisees there is a growing need to improve this regulatory and legal framework. To more effectively promote the concept of Franchising some countries around the world have specific Franchising Laws which stipulate and encourage healthy practices particularly to protect the interest of small entrepreneurs i.e Franchisees. With further and rapid growth in the Franchising there will be a need to interact with the Government on similar laws for the India Franchising Industry as we go along.
FAI , as a representative body of the Franchising Industry ,is fully equipped and will continue to play a leading and vital role in providing the necessary inputs to the Government in this regard to protect the interests of its members and for the benefit of the Franchising Industry at large.
