Franchise market in India is suggested to slope upwards in fourfold by next five years, contributing as much as 4% to the Gross Domestic Product in 2017, as per the observations done by KPMG private limited.
The industry was worth $13.4 billion in 2012, contributing 1.4% of GDP, the report said. That compares with almost 10-25% of GDP in most OECD (Organization for Economic Co-operation and Development) countries.
The industry is projected to provide almost 11 million employment opportunities by 2017.
Major sectors that are pumping out major business opportunities are retail, food & beverages, health and wellness, consumer services and education.
While the organized retail segment in India is estimated to be worth $24 billion, only 2.5% of total retail sales are driven through franchise formats compared with nearly 50% in the US, indicating significant potential, the KPMG report said.
There are presently more than 3,000 brands in India that have adopted the franchise model. Bata, NIIT, Apollo Hospitals, and Titan watches were among the first Indian franchisers.
Several leading global companies already have an established presence in India.
Recent FDI reforms in single- and multi-brand retail are expected to support this growth, although recent clarifications allowing foreign retailers to only open company-operated outlets could pose a hindrance.