FRA EWS An IFA Newsletter

N JUNE II

ISSUE

DID THEY TURN A DEAF EAR?

VENTURE CAPITALISTS:

In this issue, you will find:

From the Chairman's Desk

Venture Capitalists: Did they turn a deaf ear?: Some probable and some very unlikely reasons why many of the business plans do not make it through the funding.

Fran Buzz

Events

Hot Opportunity of the Month: Fran Recruit and Fran Training:

Case Study

Exclusive Interview: Mr. P K Gupta, Chairman & MD, Café Buddy's.

About IFA Membership

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03 - 04

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07 - 08

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FROM THE CHAIRMAN'S DESK

Gaurav Marya

Since last one year IFA's Newsletter- Fra(n)ews is trying to

serve you at its best by bringing out new and updated

insights of the franchising industry. With Fra(n)ews, we aim

to provide you with the varied impact of economic and

other related framework. This way, we would help in

increasing awareness amongst the franchising fraternity.

This newsletter would also act as a platform for all the start-

ups as well as established brands, to showcase the

business potential and seek potential franchisee's

attention.

It would be the great pleasure of Fra(n)ews in successfully

disseminating franchise knowledge to the entire franchise

fraternity. In addition, I strongly believe that it would assist

in arousing the spirit of the budding entrepreneurs to reach

to the pinnacle of success by opting to the Franchising

route. Fra(n)ews would serve as a platform wherein it

would be serving as a platform to satiate the needs of both

the franchisors and franchisees. Gaurav Marya | ChairmanIndian Franchise Association (IFA)

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VENTURE CAPITALISTS: DID THEY TURN A DEAF EAR?

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India has a vast pool of entrepreneurial

aptitude that is capable of a global

competition.

The VC has a fixed investing period. Every fund

has a fixed investing period, during which they

eagerly deploy and sanction funds. Unfortunately, if

you are pitching to a fund whose investing period

has ended or is about to end, you will receive an

abrupt rejection, no matter how good other aspect

might be.

The VC professionals usually like to keep their

hands full with active deals. VC professionals

usually source more than one deal at the time

mostly so without acknowledging the bandwidth

time. So, if you happen to be unlucky enough to

pitch to a professional who is executing multiple

other deals, rest assured, he will move slowly on

your venture. This may be a reason for delay of the

whole process.

The venture falls in the VC's 'not-so-keen-on'

sectors - Based on their prior experiences and their

in - depth industry research, certain sectors fall

under their 'black-list'. These sectors are

conveniently not considered because the VCs have

had negative experiences in theses sectors in the

past. If your venture happens to fall in this set,

eventually it would be highly unlikely to see your

venture getting a thumps up from the Vcs.

Unethical' vibes during the meeting or con-call -

Signs for potential ethics-related concerns include

frequent name dropping, explicit willingness to

bend rules, narrating prior experiences of cutting

corners or bending regulations etc. This is a binary

risk for an investor, and even the slightest hint will

often lead to a clear reject.

The entrepreneur chose the wrong month to

pitch - There are a few specific months where VCs

are inactive in deployment. These could be holiday

months (May, December), Limited Partner meeting

months (varies from fund to fund), major festivals

etc. You just need to avoid these times for them to

listen to your business-plan.

India has a vast pool of entrepreneurial aptitude that

is capable of a global competition. However, today

there is no extensive listing of fund providers

interested in investing into business ventures that

would help the potential entrepreneur to make an

intelligent beginning. There is a recognizable gap

that needs to be addressed in the world of PE/VC. It is

difficult to find investors to fund a business plan and

even if you find one, it is extremely difficult to pass

through the massive check list they put forward.

There is a vast information barrier between the

entrepreneur and the VC community. Let us

scan through some probable and some very

unlikely reasons why many of the business

plans do not make it through the funding.

Most VCs see thousands of business plans over

their investing period, eventually funding only an

extremely small number. Very few drop out during

term-sheet negotiations or diligence, a handful

reach the Partnership presentation stage, and only

a few hundred go through multiple rounds of

meetings and discussions.

It is extremely important to know your VCs

investing mandate. For example, a spa chain

founder pitching to a technology investor, a project

financing mandate being sent to an early stage

investor, a real estate mandate being sent to a tech

VC etc. are clear enough reasons for lack of interest

and these are not communicated properly and even

when they are, they seem implausible.

VENTURE CAPITALISTS: DID THEY TURN A DEAF EAR?

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Your first email or phone call put the VC off -

Clear red flags for VCs include curt emails, use of

rude language on the phone / during the meeting,

discussing valuation in the first interaction,

disinterested body language, running down or

talking with disdain about the fund are reasons to

put your VC off. This is an apt time when your

corporate etiquettes should surface up.

The entrepreneur / banker are continuously

following up with incessant phone - calls/ emails

- Follow-ups are necessary, but incessant calls are

not. One follow-up in 7-10 days is good enough.

Several, or in fact all the above reasons can be

ex tremely exasperating for entrepreneurs,

especially because there is nothing founders can

do to allay them. Some of these reasons sound very

unfair but at the end of that day, but that's how

human behavior works at times.

Thus, whether or not the venture gets VC funding is,

by no means, a reflection of its quality and potential.

Even though VC scenario looks gloomy, if you build

the best business you possibly can, success &

money will definitely reach you.

The entrepreneur / banker are

continuously following up with

incessant phone - calls / emails

According to the Associated Chambers of Commerce and Industry of India, the

electronics market is expected to cross Rs 20 lakh crore by 2020.

Assocham said that volume-wise, the electronics market is expected to reach Rs 5 lakh

crore by the end of 2012 and called for a vibrant ecosystem to develop laboratory-to-

fabrication clusters across the country. This market was estimated at Rs 3.25 lakh crore

in 2010.

If local production continues to grow at a similar pace, it is expected to fall short of Rs 15

lakh crore during the same period.

According to a recent knowledge paper prepared by Assocham and Frost & Sullivan,

the 2020 guidance is expected to catapult India's contribution to the $1.8-trillion global

electronics industry to 15 per cent from the current low contribution of 2.5 per cent.

The global electronics industry reported at $1.75 trillion is the largest and fastest

growing manufacturing sector. It is expected to reach $2.4 trillion by 2020.

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Electronics market may cross Rs 20 lakh cr by 2020: Assocham

FRAN BUZZ

ElectronicsSector:

MedX Health Corp. Enters India - One of the World's Largest and Fastest Growing Medical Device Markets

Health Care Sector:

MedX Health Corp., (TSXV.MDX) earning worldwide revenues in drug free, non-

invasive low level laser light therapy and light imaging systems, announced that their

distribution partner in India, HealthX Lasers (www.healthxlasers.com), is working

with hospitals, physicians, clinics, therapists, and rehab facilities to establish HealthX

Laser clinics offering MedX lasers to treat a wide range of medical conditions

including smoking cessation and pain management. HealthX Lasers recently

received funding to fully commercialize their clinic model as well as offer franchise

opportunities to entrepreneurs across India. The full line of MedX Health laser and

light devices for both rehab and sports medicine are now available in India.

"We are pleased to be working closely with Mr. Sandeep Joshi, President of HealthX

Laser as he establishes his clinic and franchising model across India," said Steve

Guillen, President & CEO, and "with the announcement earlier in the year that the

Chinese FDA has approved our products we expect India and China to provide

dramatic international revenue growth in the future."

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Sonalika Group, the Indian tractor manufacturer is looking to expand its

partner network via franchising. The company offers a complete

agricultural automotive product line with tractors, multi-utility vehicles,

engines, farm machinery attachments, diesel gensets, auto components

and pick and carry cranes. It offers the widest range of products varying

from 18 hp to 120 hp, offering solutions according to customer's specific

need and utility. Now, the company is offering exclusive dealership

opportunities to those with local influence across India. The prospective

franchisee needs a capital of Rs 35 to 65 lakh and area of 700 to 1,500 sq. f t

to join Sonalika's franchisee network.

Founded in1969, Sonalika group is among the top three tractor

manufacturers of India. The brand is known for international technologies,

state-of-the-art production units, experienced teams and tailor-made

solutions, distributing its tractors with more than 800 dealers in India with 30

stockists. Furthermore, the brand has marked international presence in 70

countries across the globe.

FRAN BUZZ

Sonalika Group plans franchise expansion

Sonalika group is among the top three

tractor manufacturers of India. The brand is

known for international technologies, state-

of-the-art production units, experienced

teams and tailor-made solutions,

distributing its tractors with more than 800

dealers in India with 30 stockists.

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EVENTS

Ahmedabad, June 18th, 2012: 50th National

Franchise, Retail and SME Show held on June-16-

17, 2012 at the Pride Hotel, Ahmedabad, city of

enormous business potential. The show was

presented by Franchise India along with Micro,

Small and Medium Enterprises (MSME) with

the support of Indian Franchise Association.

The two day expo and conference showcased

over 75 brands and 1500 visitors approximately.

The brands which participated and got tremendous

footfall were namely include Kent Ro Systems Ltd,

Elixir Training Services, DTDC, Kwality Walls, Aura

Thai Spa, Leo Technologies, MNR Exports, BG

Cleaning, KG Retail Pvt Ltd (Burg India ), Sesame

Workshop India (Initiatives) Pvt. Limited and many

other more.

There was also a Startup Summit, organized by

Franchise India which talked about business plans,

finding funds, marketing the companies. The panel

of experienced startup founders and business

leaders offered hands on advice. Shri Dinesh

Awasthi, Director, EDI, Ahmedabad, Mr. Mihir

Joshi, Managing Director; Gujarat Venture

Finance Limited Mr. Chandan Chatterjee,

Director, Centre for Entepreneurship Shri

Arvind Patwari, Director, MSME Development

Institute, Ahmedabad along with Ms. Ashna

Gemini Sharan, CEO, Franchise India

Exhibitions, addressed the inaugural session.

Chandigarh, June 29th, 2012: FRO Expo 2012,

India's national Franchise & Retail show held in

Chandigarh on 29 –30 June, 2012 at HOTEL TAJ

was presented by Franchise India, Asia's largest

integrated franchise Solution Company and Indian

Franchise Association (IFA) and supported by

Ministry of Micro Small and Medium

Enterprises, Government of India and the

inaugural of the show was addressed by Mr. Arun

Mahajan President Industries Association of

Chandigarh and CEO The Northern India

Rubber Mills, Mr. Badish Jindal, President,

Federation of Punjab Small Industries

Association Shri Paramjit Singh, Principal

C o n s u l t a n t , R e g i o n a l C e n t r e o f

Entrepreneurship Development, Chandigarh,

Shri S.S. Dhilon, Director, MSME-Development

Institute, Ludhiana along with Ms. Ashna

Gemini Sharan, CEO, Franchise India

Exhibitions. The show lays a platform for

companies to present and expand their franchised

concepts by net working with potential

entrepreneurs in Chandigarh and surrounding

cities.

Ahmedabad FRO 2012 Organized by Franchise India

Franchise India Hosts st51 Edition OF India's Biggest,

Multi-City Expo & Conference FRO EXPO 2012 in Chandigarh

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EVENTS

Commenting on the show, Mr. Gaurav Marya,

President, Franchise India, said “The fastest

growing and ever-changing industry in India - The

Franchising”. The franchising industry has

witnessed 30-35 % growth in the last five years.

Our main objective is to focus on main areas of

entrepreneurial entity, which will feature an

advantage on pre-entrepreneurship, how to

explore business opportunities and putting a

b u s i n e s s p l a n t o g e t h e r , m a n a g i n g

entrepreneurship, reflections and transformation

for scaling up a business. As per my

entrepreneurial journey I am pleased to see the

expected growth in the retail sector of Chandigarh

to be above 35% in the coming years.

The Exhibition put forth a wide spectrum of

enticing opportunities in franchising, retailing,

licensing, real estate and retail supply chain, from

diverse industry verticals such as Fashion &

Lifestyle, Food & Beverage, Education, Financial

services, Health, Beauty & Wellness, Travel,

Entertainment and many more. Various acclaimed

exhibitors participating in the show included Kent

Ro Systems Ltd, Elixir Training Services Pvt.Ltd,

DTDC, Aura Thai Spa, MNR Exports, BG Cleaning,

Sesame Workshop India (Initiatives) Pvt. Limited,

Café Buddy, MenMom, Edvance, Hypoxi, TTK

Prestige, Sanmacs, Grace salon, Sanfort, Emaar

MGF, Prakash Amusement, NRI Gym Khana Club,

HBN Homes Colonisers Pvt Ltd, Agrimart, Alpha

Beta, Sai Care, Asmi Diamond Jewellery,

Naturals, Hot Bitez, NYPFC, Pizza vito, Sunshine

Kebab, Morarka, Crazy Noodles, Fresh N

Naturelle, Brainworks, My Apple School, Kinder

Dance, Scott Management, Stat varsit y

Interactive, Bansal tutorials, Frameboxx, Mystic

Spa, Juice Saloon, The Four Fountain Spa, A's

Clinic, Pari, Npa Source(Atishya), Cookscape,

waza, Chhabra 555, Kidology, RMCL, Synergy,

Greenlands, Platinum World, Hokey Pokey, La-

Salle, Phone Care, ADHI India, Bangs Fried

Chicken, SS Collegue, Azilen Technologies,

Stellar, Eagle Helthmate Co, Marshal, Iosis Spa

and wellness Pvt. Ltd., Technomind, USHA RAJ

TEXTILES, Royal Trading, Aarya 24 kt, Uni - Spa,

Iosis Spa, Grescasa, Express Clinic, Tender Skin,

The Chocolate Heaven, Cookieman, Main Hun

Khadi, Indus League, Levoon, DZA, Lenbitz,

Madhuri Solars, Greenways, Seacrets, TTK

Prestige, Tatha, Dial Desk, Sign A Rama, The

Chocolate room, Marr y brown, Sonalika,

Mahindra Earthmasters, Titan Eye Plus, Edible

Arrangements, Miraaya, Divyavastra, Mom N Me,

Beyond Petals, Arttdinoxx, Cash Free holidays,

Coffee Bean & Tea Leaf and many more.

This expo is an ideal platform for dif ferent

companies to present and expand their

franchising concepts, by networking with around

4000 serious entrepreneurs, expected to attend

the show over the span of two days. The show also

boasts of presenting home based low cost

franchises, free advice on pre-registration and

novel start-up ideas.

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HOT OPPORTUNITY OF THE MONTH

Fran - FranRecruit Training

Salary structure after completion of 3 months courseRs.25000+Incentives on sales achieved (Minimum total of approx. Rs. 30,000)

Fee Structure:One time fee of Rs. 25,000

Venue:IFA campus, GK-1 , South Delhi

Course Duration:2 classes per week i.e. 24 classes in 3 months

Ashutosh Dikshit

Vice President, Indian Franchise Association,

Contact No: 08447732466, 01141731542/43/44.

Email: ashutosh.dikshit@franchiseindia.org

www.franchiseindia.org

BENEFITSæ Opportunity for Educated and unemployed individuals

æ Opportunity to first learn and then earn

æ Lifetime opportunity to join an Indian MNC

æ Direct Entry into the Management Cadre

æ 100% Job Guarantee after the completion of the course

Professional Certificate Course In Franchise Management

CASE STUDY

Information technology has bestowed upon many benefits to the business world by allowing organizations to work more efficiently and to maximize productivity. Faster communication, electronic storage and the protection of records are advantages that IT can have on your enterprise. Nearly ever y business work environment is dependent upon computer applications, some of which are specifically built to suite the requirement of the organisation. Since computerized systems are so widely used, it is advantageous to incorporate information technology into your organization.

ETP (Enterprise Technology Partners) is an international sof tware solutions company focused on partnering with its customers to help them manage and grow their business profitably using information technology.

Founded in 1988 ETP has its International HQ in Singapore, R&D centre in Mumbai, India, regional offices and a network of partners in over 14 countries, selling and supporting ETP solutions. ETP's growth is driven by the wide acceptance of its solutions by leading companies like United Colors of Benetton, Titan Watches, ITC Wills Lifestyle, PT Trikomsel Multimedia, Spice Telecom (Hot Spot), Orra Diamonds, Swiss Arabian Perfumes and many more.

In the Retail space, the ETP V5 Retail Management Solution is seamlessly integrated through CRM, POS, Online Sales, Merchandise Planning, Promotions Planning, Procurement, Distribution, Warehousing and Analy tics, helping leading retailers to better integrate demand and supply to improve bottom line. ETP V5 can be implemented comprehensively or modularly.

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In the ERP space, ETP markets and delivers the Lawson M3 solution in South Asia and has been working on Lawson M3 for more than 14 years. With over 500 person years of cumulative M3 implementation experience, ETP has had the opportunity to work on various prestigious M3 projects across the globe and across various industry verticals.

ETP has a wide range of technology driven services fine tuned over the last 20 years that are delivered by its team of experienced consultants including Application Development, Application Modernization and Application Maintenance Services.

ETP's work culture encourages proactive approach in organizing our work. Focus on quality and techniques that help them to deliver projects on time. Ensuring that they allocate the right resources at the right time for the right purpose. They believe in achieving results through proactive planning with a sharp focus on quality and time..

ETP firmly believes that, ethics and integrity are the basics for all successful business relationships. The path to growth and prosperity for them car ves through unwavering commitment to being a good partner, focus on building productive, collaborative, trusting and mutually beneficial long-term relationships.

ETP (Enterprise Technology Partners)

EXCLUSIVE INTERVIEW

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A candid Interview Mr. P. K Gupta, MD & Chairman, Café Buddy's; Winner of “Udyog Rattan Award”, 1999 (AIMA), he has shaped up many national brands starting from the green field stage and now nurtures his own venture “Café Buddy's” , taking it to another level of expansion.

1. What are the most pivotal moments in your career when you decided to come up with “Café buddy's “?

2. When and why did you opt for franchise business model?

3. What are the attributes that you look forward to in your franchisees?

4. What is your company's expansion plan in this fiscal year?

Ans: Sectors like healthcare, infrastructure, ser vices, F&B are expected to grow exponentially in the coming future. Population of India and the rising income of the working class is a good motivator to cater to this target group. A statistic report shows that in US, frequency of people eat out almost 21 times a month and 6 times in India which is again on an ascending graph. The emergence of the working class, their disposable income, busy lifest yle, convenience, ready availabilit y, brand awareness and service quality etc eventually give birth to the concept of a food chain and hence Café Buddy's came into existence.

Ans: Food retail falls in the servicing industry where incessant supervision is required along with awareness about the local market. We are well equipped when it comes to experience pertaining to this field. Since the initial planning of the business model of café buddy's the mode of expansion was planned to be Franchise business model.

Ans: The attributes that we look forward in our franchises are dynamism and aspiration to know every nitty-gritty of the business. Our franchise partners should be able to align themselves with the philosophy upheld by Café Buddy's.

Ans: Café Buddy's has seen a growth of 20%-25% during this fiscal year and we anticipate a higher growth rate. Plans are on the anvil to open considerable number of outlets across Hyderabad this year.

5. What are the core competencies of your brand that you feel will of fer tough competition to your competitors?

6. What is your mantra for success?

Ans: Well, We are not in competition with any other brand. We believe that everyone has their own place in the business. The niche they carve out for themselves depends on a lot of parameters such as positioning of their brand, product range, target customers etc. We have own positioning, target customers and we grab a good share of the pie.

Ans: Our mantra for success lies in understanding our consumers and adapting ourselves in accordance with the pace of time.

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ABOUT US

Membership form

Please contact: Ranjeeta KaulTel.: 01141731542/43/44Email: ranjeeta.kaul@franchiseindia.org