Guwahati: When laundry service 'Tumble Dry', founded by IIT, IIM topper Gaurav Teotia, made its entry in Guwahati, the store witnessed a huge rush. The chain has over 800 stores across India and is headquartered in New Delhi. However, outlets have sprung up in Jorhat, Itanagar, and many other Northeast Indian cities. How do they streamline operations across all their branches? The answer is simple: franchising.

The rush for Tumble Dry is emblematic of the success stories of franchises in Northeast India - starting from massive international chains to homegrown ventures like the eternal tea favourite 'Kadak Chaa'. The phenomenon first took root in Guwahati and soon, many smaller towns became dotted with big-name brands such as Dominos, Tanishq, KFC,  Reliance, Purabi Milk, Amul, Starbucks, Radisson - the list goes on.

This 'globalization' of the Northeast's business scenario comes at a time when a healthy economy has pulled scores of megacorporations to India. The country's current growth trajectory (6.8%) positions it to attain upper middle-income status by 2031, with the economy expected to double to $7 trillion.

American fast food chain KFC, which has been in the Northeast for a while, immersed itself so deeply in Assamese culture that it introduced Assam's famed hot chilies in its menu, apparently to mixed response. "Their prices are fair enough but the tastes leave a lot to be desired", Chinmoy Choudhury, an occasional visitor to KFC outlets in Guwahati, told Business North East. However, KFC's initiative is a testament to the Northeast's allure for these big brands. 

So what is a franchise and how does it work?

Franchising, or a business franchise model, is a contractual business model or relationship whereby an established brand, known as the 'franchisor,' allows an independent business owner, or franchisee, to use its branding, business model, and other intellectual property. In return, the franchisee agrees to pay an upfront franchise fee, plus ongoing royalties to the franchisor. The franchise fee can vary depending on the brand and scope of the project.

For instance, Urja, a unit selling lab-grown diamonds from Danabhai Jewellers takes a sum of Rs 15 lakhs for offering the franchisee stamp, a company insider informed Business North East. On the other hand, a budget of Rs 20-30 lakhs is a must to open a FirstCry outlet here. The brand offers two lakh baby and kids products from 6,000 brands across categories including diapering, toys, clothes, accessories, and more.

For introducing a KFC start-up, overall costs can range from Rs 96 lakhs to Rs 2 crores. To become the owner of a KFC outlet in India, you have to pay around Rs 36 lakh.

This business model has become popular in various industries, including fast food, retail, hospitality, and more. At the same time, challenges have arisen in the form of a long approval process, higher-than-expected operating costs, and so on.

There is an adage that goes, "If you want to go fast, go alone. If you want to go far, go together." This is especially applicable in the cutthroat world of business where being handheld by the franchisor can sometimes offer significant perks.

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