Supermarket franchise businesses are now in all tier-2 & tier-3, small and big cities. We can see that the market size of supermarket franchise in India is increasing with each passing day. The popularity and trends are changing as the supermarket model gives access to people to explore the goods from a large variety.
But this is not all. The supermarket franchise business comes with several pros & cons that we are going to discuss in this article. It will help you to decide whether you should invest in it or not.
Pros of Supermarket franchise:
1. High Brand Recognition & Established Reputation:
Supermarket franchise offers you pre-built recognition. This works in your favour as people are already well-informed about the brand. The trust a brand has developed automatically transferred to your store. The established reputation helps you to draw people from day one under the name of the franchise brand. As a result, your win is sure.
2. Access to Proven Business Model & Operational Support:
More than 90% of businesses fail due to the lack of systematic planning. The business field is highly competitive, and it’s very tough to even survive in this big ocean. In such a troubled and cut-throat competition, supermarket franchises offer a safer way. You got to follow a proven system with all the required operational support given by the company itself.
3. Bulk Purchasing Power & Cost Savings:
A franchise business offers you several products to showcase in your store. The franchisor contacts all these different companies and you contact only the franchisor. As a result, you get your products at wholesale prices, minimum in the market. This saves you money that you can use in other functions of the business.
4. Training & Ongoing Assistance:
Franchisors always believe in training & assistance considering the always-changing marketplace. This helps their partners like you to cope with the latest market trends and continuous growth in your business.
5. Financial Considerations:
Establishing your own business requires a huge capital that is not possible for each one of us. Franchise business solves this issue to some extent. The capital charge is less than what we need to establish a whole new business from scratch.
Cons of Supermarket franchise:
1. Initial Franchise Fee & Ongoing Royalty Payments:
The first con of buying a franchise business is its capital investment. Though it is lower than what it costs for a new business, you may face difficulties buying it. Moreover, the business model asks you for recurring money annually or monthly to renew your eligibility to use the brand.
2. Equipment & Inventory Costs:
All franchisees follow a specific set of infrastructures that define their identity. This set also helps to sell more and lets the customer more of your store’s exposure. But this equipment & inventory costs you a lot of money. However, the franchisor may or may not include your equipment & inventory cost in the capital amount.
3. Store Location & Lease Expense:
Buying a franchise doesn’t only include the brand name, equipment, products, and inventory but also the location. This means you have to pay for the prime location a franchisor has chosen in your city. This business turns from a franchise business to a real estate business.
4. Profit Potential & Return on Investment:
The franchisor will make a deal with you according to their business model. This includes the sharing of the total profit and minimum sales limit. This factor can highly impact your return on investment and personal profit. Be careful with the calculations while signing the deal.
5. Market Stability & Growth Potential:
Though supermarket franchise is a profitable business model and will offer you huge profits. But you can’t grow your business according to your preferences. For example- you can’t keep a single product extra that you feel would make good sales. To some extent, a franchise business limits your entrepreneurial zeal.
Considerations for Choosing the Right Supermarket Franchise:
If you’re into buying a franchise supermarket to enter into the business world, keep patience. There are some factors you must not ignore. Read all of them below.
1. Brand Value:
Before signing a deal, check the brand value of the franchisor. Check out all their recent news and history. Only when you find their business reliable and with a good image, should you proceed. A bad review about the brand can lead to your failure. People will not look at you but at the brand while deciding their decision.
2. Fee & Royalties:
Look for a balanced fee & royalty system in the company. This will help you to maintain your account. It must not be greater than your capacity so that you could save your profits as well.
3. Support:
Each company offers proper training for its new partners. As you grow in business, they exceed the training level to boost your understanding every now & then. Choose a franchise supermarket business that offers an excellent training program and keeps its support system ready to help under all conditions.
4. Location:
Choose a company that chooses a prime location only. This will help you create brand awareness in the initial stages only. More people will come to your place with their requirements and you will generate more sales.
5. Products:
The products you are going to sell should have confidence in your own eyes. It’s unethical & non-professional not to have confidence in your own business. So choose a company in which you believe first.
6. Marketing Support:
Some franchisee support in marketing your location too. They have their local PR team who would help you in branding & marketing your store.
7. Legal Considerations:
Buying a franchise business will need legal consultancy. You may need several permissions, licences, documentation, and certifications you may know about. Choose a company who has an in-house legal team to help keep things transparent and well-informed to all.
Why Choose the 7 Heven Grocery Franchise?
As we discussed above, 7 Heven has all the prime qualities of a supermarket franchise. Launched in 202 only, during the Covid-19 era, the company has established 100+ stores across India. It has partnered with more than 1200+ national & international brands and offers 2000+ products to customers. Moreover, the company was awarded the Startup of the Year 2022 in the FMCG category.
7Heven offer all its partners and to-be partners prime locations in their cities, a fair deal of profit sharing between two parties, a wide range of products in several categories to catch a wider audience, and a proper training program to deal with any practical market issue.
Conclusion:
If you’re looking for a best supermarket franchise in India, first understand the whole picture of the industry. We have tried to simplify and present this industry in brief through this article. 7Heven is one of the fastest growing franchises in India with more than 100 stores across the country and 2000+ products to serve each section of the customer. The policies are very transparent and made to create profits for the franchise partners.
FAQs:
1. Is running a supermarket franchise profitable in India?
Yes. Though the supermarket business has been in India for the last 2 decades, the industry is still in its initial phases and gives huge profits to its owners.
2. Which are the best supermarket franchise in India?
There are several good supermarket franchises in India.
– 7Heven
– Big Bazar
– Reliance
– D Mart
3. What is the income of a supermarket business?
The profit numbers depend on several factors. However, the general profit percentage revolves around 2-4%.
4. Is the 7Heven franchise profitable?
Yes. It indeed is. The store has shown tremendous growth in just 3 years of its launch and has set up several successful stores in India.
5. What is the initial capital required to start a supermarket business in India?
The range lies between 10 Lakhs to 1 Crore depending on the requirements.