Devansh Kumar, hailing from Lucknow, found himself compelled to make a tough decision: the closure of his F&B outlet in Kapoorthala. Merely a year had passed since he took the franchise from a promising brand based in Hyderabad, Lassi And Shakes. To his surprise, upon deciding to shut down his outlet, he discovered a trend across the country – multiple outlets of the same brand were closing. The primary reason behind this was that franchise owners were unable to generate the promised profits as outlined by the parent company.

Although the franchise assured comprehensive support during the initial stages of the franchise agreement, the reality fell short. Challenges emerged in maintaining quality, consistency, and adhering to common brand standards. This case is emblematic of a broader issue in India, where numerous smaller or homegrown brands are grappling with difficulties in sustaining their businesses post-expansion. Despite the apparent ease of spreading franchises and increasing the number of outlets in India, the real challenges lie in sustaining operations and achieving profitability, making it a complex and problematic endeavor.

The Indian F&B industry has witnessed a notable surge in franchise expansion by homegrown brands. This trend is primarily driven by two key motivations: the desire to proliferate their brand presence across multiple locations and the recognition of franchising as a lucrative business opportunity. While this growth has been promising, a significant challenge has emerged, particularly for smaller franchise chains. The struggle to maintain quality and consistency across diverse franchise outlets has become a formidable obstacle, hindering the success of many small players in the Indian F&B landscape.

Growth Motivations in Indian F&B Franchising

The decision of Indian F&B brands to expand through franchises is often rooted in the pursuit of broader market reach and accelerated growth. By franchising, brands can establish a presence in various cities and regions without the need for significant capital investment in standalone outlets. Moreover, many entrepreneurs see franchising as a business opportunity to leverage established brand identities, operational models, and support systems provided by the franchisors.

More than 300 companies are starting franchising every year and 53 percent of all franchises are by multi-unit franchisees. In this, regional brand dominates with 50 percent, 34 percent from a national brand and rest 16 percent is with the local brands. Out of this 35 percent of franchise concepts are F&B brands and INR 5-10 lakh is the initial investment level for 40 percent of the franchisees.

The Quality and Consistency Conundrum

While the motivations for franchise expansion are clear, maintaining quality and consistency across a network of diverse franchise outlets presents a multifaceted challenge. Several factors contribute to this dilemma. 

Franchise outlets face distinctive operational challenges due to their locations in different regions with varying demographics. These challenges arise from differences in local supply chains, cultural preferences, and workforce dynamics, leading to inconsistencies in food preparation, service standards, and the overall customer experience.

Maintaining standardized operational procedures and desired quality standards necessitates robust training programs for franchisees. Unfortunately, small franchise chains may struggle to provide comprehensive training and ongoing support, resulting in operational lapses that can impact the overall consistency of the brand.

Coordinating a consistent supply chain across diverse locations proves to be a significant challenge for franchise networks. Differences in sourcing local ingredients and managing inventory can lead to variations in menu items, impacting the overall brand experience for customers.

“Within the realm of India's F&B franchise landscape, the journey goes beyond numbers. It's a narrative of depth, where thriving isn't just a result but a conscious effort to weave a seamless fabric of standardized excellence. Navigating the complexities requires not just vision but a steadfast dedication to refining the essence of quality and consistency across every franchise outpost,” Manu Mohindra from Big Bang Food stated, who is actively acquiring homegrown food brands. 

Small franchise chains often lack the resources required for effective monitoring and evaluation mechanisms. This deficiency makes it challenging to promptly identify and rectify quality issues, ultimately contributing to a decline in customer satisfaction and potentially affecting the success of the franchise network as a whole.

The Impact on Small Franchise Chains

The inability to maintain quality and consistency has tangible consequences for small franchise chains in India's F&B industry. Negative customer experiences, word-of-mouth backlash, and a decline in brand reputation can hamper the success and sustainability of the franchise network. In some cases, struggling franchises may face closures, causing financial setbacks for both franchisors and franchisees.

Rohit Maingi is principal founder of Bottles and Barrels commented that to guarantee that franchisees and their workers can reproduce the success of your brand, provide them with thorough training. “Consistent assistance is essential for maintaining consistency. To preserve brand standards, put in place quality control procedures such as routine inspections, mystery shopping schemes, and feedback methods,” he added.

In the world of F&B franchising, slipping on quality doesn't just hurt the pocket. It means unhappy customers, bad buzz, and a brand losing its shine. “It's not just a business problem; it's like taking a step back. Closures don't just mean shutting doors; they hit the wallet of both the company and the franchise owners. It's a reminder that running a franchise isn't just about food; it's about staying committed to making customers happy and keeping the business afloat,” Nishant Raghuwanshi, franchise owner of Chai Sutta Bar added.

 Addressing the Challenges

To overcome the quality and consistency challenges faced by small franchise chains in India's F&B industry, a comprehensive approach is necessary. Clearly defined and standardized operational procedures should be established and enforced across all franchise outlets to maintain consistency. Franchisors must invest in robust training programs for franchisees, covering all aspects of operations, customer service, and quality control. Implementing technology solutions, such as centralized POS systems and inventory management tools, can streamline operations and facilitate better control over quality standards. Conducting regular audits and inspections can help identify and address inconsistencies promptly. Franchisors should establish a system for ongoing evaluation of franchise outlets.