Evaluating franchise brands for funding and investing in franchisors is increasingly becoming a private equity norm in India. Though handful, these funding entities understand franchising, and they know brands and understand branding. Such mid-sized private equity firms are entrepreneurial in their working styles and have become significant players for consumer led industries in franchising where they understand how to control costs and focus on getting the profit margins up. These well-cultured investors work on appreciating the franchisor’s growth of income as indicia of both franchisee customer satisfaction and an expansion of the franchisor’s network. Catching up with trends, Franchising in 2017 as an effective means of replicating commercial successes will increasingly attract professional investor’s interest for franchisors’ fraternity. Below listed are the six sectors that would be getting funded in the year to come.

1. Tech-enabled micro franchise concepts:

Like 2016, we will continue to see the prime beneficiary to raise early stage and angel funding. These could be app related brands or ecommerce companies that give direct consumer service. Tech companies with micro franchise models or omni-channel presence would all be in radar of future funding.

2. B2B Tech franchise Models:

Tech startups in B2B space that are helping SMEs , retailers, manufacturers in making their businesses more organised, efficient and tech friendly would be more in demand. Edtech, consumer interface app builders, digital payment platforms, SAAS (Software as a service) models would top the priority list of investors.

3. Scalable franchise concepts:

Franchise concepts in restaurants, salons & education will also be in the pipeline once they reach a certain scale. Private equity firms look to leverage a brand name already known to the public and help the franchise brand achieve its full growth potential by promoting new menu or product items, remodelling existing stores and opening new locations in unchartered markets. PE Capital always looks to seizes opportunities to create a great deal of incremental value in to achieve next big leap of growth.

4. Universal acceptance:

Franchise concepts that are created to befit consumption in the universal marketplace have better chances of getting funded due to their larger consumer volume, further promising bigger market penetration. Here funds would look for middle-sized companies where smaller size is not an impediment to success and here investors will leverage their experience and ability to keep the growth sharp for building a globally successful business.

5. Organic & healthcare products:

Organic origin and wellness related products score high with investors given the consumers to invest in eating natural and safe foods that can be preventive. Organic food and personal use goods, Ayurveda, FMCG concepts would see a huge traction both in franchising and private equity participation.

6. DIY Concepts:

As Indian market is changing fast and millennial consumers are more interested in renting then buying assets–Do It yourself models will become all the more popular in the market. We are witnessing a beginning in India for concepts like Laundrettes etc.