Franchise India To Launch $100 Million Fund

New Delhi, 7th October, 2010: Franchise India

, an integrated franchise and retail solution providing company based out of Delhi, is all set to launch a $100 million (460 crore) franchise fund with the aim of investing exclusively in franchisees.

Established in 1999, Franchise India has served as a brand consultant to companies such as Gitanjali Gems Ltd, Videocon Industries Ltd, Reebok, Samsonite Australias cafe chain Gloria Jean's Coffee and UK-based Costa Coffee to name a few. Investors who are looking to begin or expand a franchise business, there will soon be a new option in addition to borrowing from banks or relatives.

It will be a 10-year horizon fund. We see huge potential for such a fund with more and more international brands looking to making an entry with us, said Franchise India president Gaurav Marya, who will begin road shows to attract investors to the fund in two months.

Brands such as Malta's Cafe Jubilee and the UK's Coffee Republic that plan to enter the country this year or early next year to operate through franchises, which means franchise operators will soon be scrambling for money to set up new chains. Firms such as US-based Yum! Brands Inc., owner of Kentucky Fried Chicken (KFC), Pizza Hut and Taco Bell brands, continue to expand through franchises in India. Money doesn't come easy for franchise operators. Setting up of a 600 sq. ft outlet requires '10 lakhs of investment.

For a new entrepreneur, the money comes from years of savings or is borrowed from relatives or friends or banks, which charge 14-18% interest on loans and require collateral. Franchise India helps syndicate capital for small and medium enterprises, tying up around 300 such transactions every year, said Marya.

Raising capital for the fund will not be easy for Franchise India. Investment funds are still finding it difficult to raise money from investors abroad, who continue to be cautious because of the continuing lag in their own economies.

by: Ruchika Malhotra

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