Franchise 2009 Food, Beverage and Hospitality

Thursday, November 26, 2009. Ashoka Hotel, New Delhi. Day 1 of Franchise India 2009. Continued from Franchise India – Entrepreneurship Summit 2009 – Specialty Retail.

Another interesting session was “Business Opportunities in Food & Beverage Sector”. The speakers were:

• Mahmood Khan, Hospitality Expert Virginia Tech, USA
• Pavan Gandhok, CEO, Litebite Foods
• Gary Moore, MD,The Pizza Co., Thailand
• Rakhee Nagpal, MD & Chairperson of DVS (Moderator)
• Luis Daniel, General Manager, KRR International
• Ankur Sharma, General Manager Business Development , Yo China

Mahmood Khan shared how more than 200 fast food franchise brands have been in developed in USA – a critical factor being ubiquitous Highways (necessitating “quick bites”). He claimed that F&B is a recession-proof business because people will NOT stop eating. His another observation was that today’s customer does not have patience. Technology plays a big role in dealing with customer’s “instant needs”. So, you need to know “real needs of the customer” and continually watch “where the technology is going”.

Pavan Gandhok, CEO, Litebite Foods, opined that the challenge is to present local cuisines in an interesting manner – these items (like vada paav, paav bhaaji, samosa) account for 70-80% of the market and whosoever cracks this code is likely to make lot of money.

Gary Moore, MD, The Pizza Co., was excited about India and said that India is the biggest potential market we have seen in a long time. He emphasized on having “systems in place”. He said, “Brand is a promise of consistency” and successful entrepreneurs achieve that by engineering opportunities for the long-term. Apart from adequate capital, an entrepreneur needs to ask him/herself:

• What have I developed?
• What have I grown?
• What is my passion?

Luis Daniel, General Manager, KRR International, (who started his career as a McDonald crew 25 years ago) shared that after about 3-5 years when operational systems of a business have been set (facilitating smooth expansion), an entrepreneur can “work less and make more”.

Ankur Sharma, General Manager Business Development , Yo China shared that capital needs of a franchise business range from Rs. 3 lakhs to Rs. 1.5 crores. At the smallest level, Kiosk models can yield 100% ROI in one year. A full-fledged restaurant model  can yield 30-35% ROI in one year.

franchise restaurant services market size

Franchise India 2009

Thursday, November 26, 2009. Ashoka Hotel, New Delhi. Day 1 of Franchise India 2009 saw scores of enthusiastic entrepreneurs eagerly evaluating various franchise opportunities (300 brands) in India.

Billed as “Asia’s Biggest Franchise Show”, the event came alive in various sections - Brand License 2009, Entrepreneurship Summit ‘09, Food & Beverage, Fashion franchising, Knowledge Series, Licensing and Retail.

What aroused our curiosity was the “Entrepreneurship Summit 2009″ conference series. Some of the speakers at “Business Opportunities : Specialty Retail” session were:

• Aloke Banerjee, CEO, Rosebys
• Vivek Bali, Group President, Spice Hotspot
• S.Ravikant, COO, Titan Eyewear
• N.P. Singh, Director, Samsonite
• Rajiv Agarwal, The Mobile Store
• Naveen Rakhecha, CEO, Cartridge World

S. Ravikant, COO, Titan Eyewear  was representing Titan, India’s “Largest Specialty Retailer” with turnover of Rs. 3000 Crores. He talked about his franchise offer, “Multi-Brand” Eye+ Retail Stores, as “World Class Optical Stores”. What makes this an attractive opportunity is the fact that most consumers in this space are clueless about quality parameters, concerned about accuracy of lenses and confused about lack of transparency in pricing.

N.P. Singh, shared how Samsonite’s innovations (from 1910) have made it a global leader with 34% of global luggage market share. He presented his Rs. 25+ lakhs franchise opportunity (3 year payback) with a unique offering – “obsolescence replacement”.

A recurring theme was “World Class” – world class products, world class operations, world class systems, world class training, world class technology and so on.

Rajiv Agarwal showcased “The Mobile Store” as a world class shopping experience for the existing fragmented mobile market with a chaotic shopping experience.

Naveen Rakhecha, CEO, Cartridge World shared his gyan, “Look beyond traditional franchise opportunities (Education, F&B, etc). Go for distinguished offering. Unique ideas are likely to give better returns”.

NEXT BUSINESS CAPSULE: Opportunities in Food & Beverage segment.

Shri. Dinsha J. Patel, Hon’ble Minister of MSMSE at www.nsicindia.com launch

The India Global Summit on MSMEs gets underway on Friday, November 20, 2009 at Hotel The Lalit, Barakhamba Road, New Delhi.

Expect the discussions to revolve around “Building the next generation of MSMEs”, the theme for the summit.

Shri Dinesh Rai, Secretary, Ministry of MSME, is one of the speakers (he was present at the launch of B2B web portal www.nsicindia.com for MSME’s as shown in picture). Other speakers include:

• Arun Maira: Member, Planning Commission
• Pravir Kumar: Joint Secretary, Ministry of MSME
• H P kumar: Chairman & MD, NSIC
• Rakesh Rewari: Deputy MD,  SIDBI
• Rana Hasan: Principal Economist, ADB
• Rakesh Singh:  Head SMEs, Standard Chartered Bank

One of  goals of the summit is to explore & deliberate on opportunities for integration of MSMEs in the value chain. Sub-themes include:

• Investing with Technology upgradation ICT adoption and R&D
• Dealing with Economic Cycles:  How to adapt the changed economic cycles ?
• Capital Requirement: What is the right mix of credit and risk capital?
• Developing people power: Challenges and solutions

On,  Saturday, November 20, 2009, a Buyer Seller Meet has been scheduled between OEMs/ Large Corporations / PSUs and the Micro, Small and Medium Enterprises on one to one basis. Participating companies include:

• Bechtel India
• BHEL
• IDBI Bank
• International Tractor
• Maruti Suzuki
• New Holland Fiat (India)
• Philips
• Proctor & Gamble Innovation Centre
• Standard Chartered

For Registration, Speaking & Sponsorship Opportunities, contact:

Pooja Jha
Direct Tel : +91-11-24653006
Tel: +91-11 – 24629994 –7 Ext 407
Fax : +91-11 – 24615693
Email: pooja.jha@cii.in

For Buyer –Seller Meet & MSME Mart, contact:

Suvendu Mahapatra
Direct Tel : +91-11-24653006
Tel: +91-11 – 24629994 –7 Extn : 409
Fax : +91-11 – 24615693
Email: suvendu.mahapatra@cii.in

If you happen to visit the summit, we would be glad to hear about your experience. Do Write in!

Quotable Quotes:

Mr Scott Bowers, Senior Vice-President (Global Marketing and Brand Development), Oakley Inc:

“India is one of the strongest markets in Asia and this is where we are looking to establish our product line.

Until now, we were cautious with expansion but now we will be making a lot of noise.

The appetite for luxury products is huge. We are exploring means to entrench ourselves here.

Mr Marc Duhm, Wholesale Director, Versace:

“The purchasing power in India is a major factor while considering expansion. We will keep looking at opportunities in markets where we feel they are growing.

The slowdown in our business is a temporary one and we will keep looking at opportunities to grow our business.”

Mr Abhay Gupta, Executive Director, The Blue Clothing Company:

“Consumers are seeking high-end brands and purchasing power is back with a bang. We have had a good response to Versace.

Our next venture will be to launch high-end jewellery brands in India. However, easing of FDI norms will help the industry grow.

Premium brands enable value addition by helping to improve retailing experience and manpower training.”

Read the full article here.

According to ET Bureau, SEBI’s latest move “can be but one step
towards removing the panoply of constraints that they face on a daily basis.”

Some suggestions by ET Bureau:

• Remove routine informational rigidities between SMEs and lenders and potential investors.
• A more responsive policy mechanism to finance SMEs: what is necessary is an array of advisory and business development services focused on SMEs: the idea is to improve credit and business-performance information.
• Innovative financial products to reduce credit risks for SMEs and boost investor comfort.
• Address the problem of delayed payments and rationalise the tax regime for SMEs.

Finally we  enthusiastically agree with the assertion:

We need a thriving SME sector to boost entrepreneurship and risk-taking pan-India, and spur innovation and growth.

Read the full article here.

CB Bhave, SEBI Chairman

Now,  SME Business Owners in India can raise funds with their IPOs on NSE and BSE!

This is the latest message from the Securities and Exchange Board of India (SEBI), which announced its decisions through its Press Release “PR No.344/2009″.

NSE and BSE will now be allowed to set-up SME trading  platform, which would have lighter eligibility norms for companies initiating public offers:  Clause 49 still needs to be complied with, and SMEs can prepare and present financial results on a half-yearly basis (instead of the quarterly requirement).

Other exemptions include diluting the profitability track record requirement and Takeover Code regulations.

• Minimum IPO application size: Rs. 1 lakh
• Minimum trading lot: Rs. 1 lakh
• Upper limit for paid up capital for listing on the SME exchange : Rs. 25 crore
• Minimum paid up capital for listing on NSE/ BSE: Rs.10 crore

Read the complete Press Release here.