OPENING A CAFE AMUL FRANCHISE IN INDIA (ARTICLE WRITTEN FOR INDIAFILINGS.COM LEARNING CENTER)

The following article is written by me as a Content Writer for the site IndiaFilings.com in LearningCentre section...

Franchising is a business model that combines the best aspects of sole proprietorship and Corporate model. It can be described as a "hybrid" model that fills the gap between working for somebody else and working for yourself. According to the International Franchise Association, “Franchising is a method of distributing products or services. At least two levels of people are involved in a franchise system:

1) the franchisor, who lends his trademark or trade name and a business system; and

2) the franchisee, who pays a royalty and often an initial fee for the right to do business under the franchisor's name and system”

Looking to set up a franchise in food industry? Then Cafe Amul franchise is the way to go...

Amul is India's largest food franchise chain and is now looking for individual or group franchisees across India. Cafe Amul franchise cost or investment is about Rs. 30 lakhs. If you are looking for some cheap but profitable franchise business options in India with Amul, you can consider opening an Amul Parlour franchise instead which will be within Rs. 10 lakhs investments.

SCOPE FOR FOOD FRANCHISE IN INDIA:

India's quick-service restaurant chains business is expected to grow eight-fold to $5.6 b by 2020 from $720 m in 2011, at a CAGR of 27 per cent. Various domestic and international companies are likely to introduce new food offerings to suit the tastes of different consumers. Additionally, the new growth is likely to come from Tier II and Tier III cities where major fast food players are likely to expand aggressively. So, franchise opportunities in fast food industry of India are mounting with a velocity making India a next big destination for fast food chains.

AN INSPIRATIONAL STORY OF ANGAD SINGH:

Angad Singh followed this tenet when he moved back to India after working for a couple of years at a hotel in Melbourne, Australia. His father, Ravinder Singh, had taken VRS from a bank, but wanted to continue working. The father-son duo invested their savings to buy a franchise of New York Pizza and Fried Chicken in Chandigarh. "Both my father and I are passionate about food, but neither of us had the expertise to set up and run a business. Taking a franchise was the logical answer," says the 26-year-old.

With an initial investment of Rs.50 lakh he started his franchise in October 2012 and within a short span of time his franchise business broke even by April 2013. When he was questioned why he chose it his answer was, “I wanted to do food business in India. But I didn’t have enough expertise, so I chose to buy a franchise”.

INVESTMENTS AND COSTS INVOLVED:

 If you're passionate about food, you could set up a street food kiosk for as little as Rs 5 lakh or you could invest Rs 30 lakh for a Chinese food joint. Here is the estimate in terms of cost, area requirements, return for setting up a Cafe Amul QSR Franchise:

• Area requirements for Cafe Amul franchise: 1000 to 1500 square feet.
• Net investments for Cafe Amul: Rs. 30 lakhs.
• Necessary Equipments: Middleby Marshall Pizza Oven, Dosa Maker, Hot & Cold Bain Maries, Sandwich Grillers, Visicooler, Scooping Cabinet, Deep Freezers, Chest Coolers etc.
• Amul franchise royalty fees: Rs. 3 lakhs. This is also known as brand deposit.

Breakup of Cafe Amul franchise investment details in India:

The interior decoration cost for Cafe Amul franchise will be around Rs 1600 per square feet, so for a 1000 sq.ft. premise area, this will be Rs. 16 lakhs. The royalty fees, as mentioned above, is Rs. 3 lakhs. For Equipment (kitchen, parlour and storage) you need Rs. 11 lakhs. Thus, the total investment cost for Cafe Amul franchise is about Rs. 30 lakhs.

CAFE AMUL FRANCHISE- ROI:

Particulars	Amount per month in Rs.
Total Sales per Month	900,000	-
Gross monthly margins @25%Approx.	225,000	-
Monthly Operating Expenses	152,000	-
Shop Rental @50 per sq ft per month	-	60,000
Manpower(10 persons @ Rs.6000)	-	60,000
Electricity Charges	-	25,000
Consumables / Disposables / Carrybags	-	5,000
Misc (incl. Telephone etc)	-	2,000
Net Contribution per month	73,000	-

PROCEDURE FOR ESTABLISHING AMUL FRANCHISE:

• Renovate your shop based on the design and specifications provided by Amul. It may cost you in the range of Rs. 50,000 to Rs. 100,000.
• Brand Deposit: Refundable deposit of Rs. 25,000 locked in for three year.
• Equip the outlet with deep-freezers, refrigerators/visi-coolers, chest milk coolers, oven, dispensing machine, etc. based on the customer profile and expected volume of sales. The local Amul representative will be in a position to guide you on machines required, their capacity, type, etc. Equipping your outlet will cost you around Rs. 80,000 to Rs.100,000.

SUPPLIERS AND PRODUCT CATALOGUE FOR THE CAFE AMUL FRANCHISE:

     Amul’s wholesale dealers will supply you the entire range of Amul products at your shop. Amul’s product portfolio is divided into three broad categories:

• Dairy Products: It includes our entire range of dairy products which is further divided as:

a.   Ambient or those kept in room temperature, also referred to as 'dry' products like Ghee, milk powders, flavored milk, etc.

b.    Chilled products also referred to as 'wet' products. These products are stored at or below 4 degree centigrade, like butter, cheese, chocolates, etc. These products are stored in refrigerator or visi-cooler or chest milk coolers at the shop.

• Ice-cream range or frozen category, which is stored and transported in a frozen condition (- 28 degree centigrade or below). This category includes Ice-creams, frozen pizzas and frozen paneer, and are stored in deep-freezers at shops.
• Pouch Milk or Fresh products: This includes pouch milk, buttermilk and curd. These products are also stored in refrigerator or visi-cooler or chest milk coolers at the shop.

GETTING AMUL SUPPORT FOR FRANCHISE:

• Amul would provide the design and specifications for renovation of the outlet. It will provide consultancy if required and will also inspect the work of the contractor.
• Amul will help in assessing the business potential of the shop and will help in making the business plan.
• Amul will guide you in purchase of various equipment. It will also help you in choosing between the various sizes and types available based on its experience of the business.
• Amul will provide signages and glowsign to the outlet at its own cost.
• Amul shall help in the inauguration activities by way of local promotions.
• Exclusive consumer offers would be made available through Amul preferred outlets which are not extended elsewhere.
• For any assistance you may reach Amul using the below details:

Retail Cell,
GCMMF Ltd.
Amul Dairy Road, Anand
Ph 02692 - 221257 / 58
Fax 02692 - 240185

For more information or help starting a CAFE AMUL Franchise, talk to an IndiaFilings Business Advisor.