Budget Planning
Budget Planning
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Finding the Cheapest Franchise in India
Wish to be a franchisee in India? Considering that the retail sector in the country is growing rapidly, it is a lucrative business opportunity. The supermarket segment holds immense promise, as an increasing number of customers have started using supermarkets to shop.
When deciding your business proposition, you need to keep your focus on one critical aspect of the business. It is the brand or DMart franchise cost. The cost will make a difference to your business’s bottom line.
Come and be a part of the Grocery 4U franchise, one of India’s fastest-growing supermarket franchisors. It is also the cheapest franchise in India.
Understanding Supermarket Franchise Cost
Franchise Cost Fee
The first thing that you need to thoroughly assess when getting into the supermarket franchise business is the franchise fees. What is it? The franchise fee is a fee that you pay one-time. It has to be paid to the franchisor, for example, Grocery 4U. The payment of the fees indicates that the brand gives you permission for the following –
- Using the franchisor brand name.
- Using the brand business model
- Taking help and support of the brand in running your business operations
The supermarket franchise fee in India ranges usually between Rs.10 lakh and Rs. 50 lakh.It can be higher depending on various factors.
To know the supermarket franchise costs for Grocery 4U, call us today.
What factors determine the franchise fee?
- The reputation of the brand. The more known the brand, the higher the franchise fee.
- The market presence of the brand. If the brand is present across the country, the fee is higher.
- Well-settled brands with a notable market and customer base command a higher fee.
- The location of the franchise also determines the fee. For example, franchises in rural areas are the cheapest franchises in India. Compared to this, the costs in a metro city are comparatively higher.
- Lastly, the size of the franchise impacts the franchise cost. Small-sized franchises will pay less compared to large-sized franchises.
- Franchisors also provide training and on-the-ground support to their franchise network. This also impacts franchise costs. For example, franchisors that offer complete training charge more while the marketing assistance franchisors offer comes at a cost.
All decisions should be based on franchise fees. You need to determine all relevant factors, including the market for the brand in your location, brand value, and the support services offered by the franchisor.
It is not necessary to select a low-cost franchise in India. The fees are a critical factor, yes, but you need to make a decision based on the value of the brand and the business model of the brand.
Supermarkets Like Grocery 4U and DMart Franchise Cost
In the case of supermarket franchises, the following factors need to be considered –
- Location is the first thing to consider while determining the franchise cost. If the store is located in an area that is easily accessible it will surely command a higher price. You can either buy or rent a place, and it will add to your investment.
Property prices differ depending on where you buy or rent the property. For example, a commercial property in a metro city like Delhi or Mumbai has high footfalls. A property of size 1,000-1,500 sq feet space can cost between Rs. 60 crore and Rs. 80 crore. Alternatively, you can lease a property even though the rental costs in bigger cities can be quite high. Typically, supermarket franchise rentals can cost between Rs. 50/- and Rs. 200.- per sq ft per month, based on the property’s location and size.
The best way to find the right-priced property as a low-cost franchise in India is to research properly, negotiate competitively, and reach an understanding of the revenue-sharing model.
- Build-out and renovation costs are also considered in determining the franchise costs of supermarket brands. When you rent a space, you will need to invest in renovating the space so that it transforms into a commercial supermarket. Some expenses incurred involve constructing or adding new features, demolishing certain features, electrical and plumbing work, installing new fixtures, etc. The costs will depend on the size of the shop, placements of products, complexities of product display, etc.
To keep the costs down, you need to work with expert designers of the franchisor as well as architects and builders to ensure that the brand standards are met. The local rules also should be met. The build-up should be such that operational requirements are met seamlessly.
- Equipment and inventory are the other aspects to be considered when considering a supermarket franchise. The place needs the right kind of infrastructure. Filling up the racks with inventory is another investment that should be your top priority.
The must-have equipment includes freezers, racks, security systems, POS terminals, refrigerators, and checkout counters. Whether you buy these or rent them, both can be an expensive affair. The cost can be high or low depending on the size of the store.
For a supermarket franchise, the equipment cost can run into lakhs or crores or even higher.
- Licenses, Permits, and Insurance costs also influence the DMart franchise cost. Running a supermarket franchise requires appropriate licenses and permits. These include food safety certifications like FSSAI, trade licenses, shops and establishment licenses, environmental clearances, fire safety and building approvals, etc. The store’s size and location will determine the amounts to be spent on licenses and permits. In most cases, you should be prepared to spend tens of thousands, going up to lakhs.
The other expense in this context is insurance. This amount will cover things like product liability costs, general liability costs, and occupational accident insurance. Insurance costs in the case of supermarkets can take up to Rs. 1 lakh to Rs. 5 lakhs of expense. However, this will vary depending on the store’s size, coverage type, and the number of employees.
It is best to speak with your legal and regulatory compliance team to optimize expenses in this case.
- Other expenses include getting the right staff on board and training expenses. Staffing costs, including salaries, minimum wages, and benefits of employees can be an expensive affair. In the regular model, 10% of the total revenue should be earmarked for employee salaries, training costs, and more. Besides the direct costs, there are indirect expenses, too. For example, onboarding and higher employee turnover costs are indirect costs.
- Marketing and Promotion costs are the other expenses that you need to incur as a supermarket franchise. This is crucial as the supermarket industry is highly competitive. You need to invest in in-store promotions, advertising campaigns, loyalty programs, and other branding initiatives, like investing in print, radio, TV ads, social media and digital marketing, sponsorships, etc.
- Other ongoing costs are mostly related to operational costs. This includes royalties, utilities, maintenance, inventory replacement costs, and more.
To earn the right kinds of profits, due diligence is a must. This includes cost control from the beginning. You also need to optimize inventory levels and ensure that the products and brands stacked on the racks are as per the existing market trends and your customer preferences. Back up all your decisions with exhaustive market research.
Join Grocery 4U’s growing network of franchises and watch your supermarket franchise business grow!
