How Franchising Helped Prestige Limited to Bounce Back
Prestige franchisees are largely small entrepreneurs, who depend on this business for their survival.
When TTK Prestige was going through deep turmoil in late 90s and early 2000, it launched a number of initiatives, which helped it to bounce back upon the channel front, product front and retail.The company was losing its place in multi–brand outlet, that’s when it thought to have their own outlets. At that time, advertising and marketing wasn’t enough to promote the new products they launched.
Having its presence in the market was what it required. According to K G George, Senior Vice President, Retail at TTK - Prestige Limited, “It was like a 365 days advertisement for the company. With all this in mind, we launched our first store in 2003. At that time we were not in a financial position to invest into our own stores, because we had just emerged out of a crisis, then we decided to go in for franchise stores, as we wanted to multiply the stores fast and franchise model was the best option for us.”
Currently, the brand has 531 outlets spread across 290 towns. Out of these, only one outlet in Pune is company-owned. Today, 20 per cent of its franchisees have more than one store. “Our job is basically to drive the footfalls to the stone, to make sure that every franchisee makes money and rises so that we can also expand our network. So, we do everything possible to drive the footfalls to the store,” shares George.
Prestige as a brand also gets good deals for its franchisees, as banks offer better deals and credit limits to people opting for its franchise. Prestige franchisees are largely small entrepreneurs, who depend on this business for their survival. The investment in a franchise store ranges from 10 to 25 lakh with returns ranging from 25-30 per cent.
Talking more on the franchisee’s profile, George shares, “Several salesman from our stores, later opened their own stores and are earning extremely well. Many women from semi-urban locations, who do not have any experience in doing business in their life, are now earning very well, from the stores.”
In south India, the brand has its number best performing franchisee in Coimbatore. The store is owned by a woman, who is the wife of one of their distributors. Earlier a housewife, today, she runs a successful business with a turnover of over Rs 4.5 crore per year. Today, almost 15-20 per cent of Prestige’s franchisees are women.
Talking about further expansion, George says, “The retail initiative is going to be driven by only franchising. As, there are number of intangible benefits that a company can derive from these stores in terms of accelerated launch of products, controlling other channels, low cost of selling, free advertisement for the company, etc.”
The company is also looking at integrating the stores with e-commerce websites so that the delivery can be made through these stores.
(This article was first published in the January issue of Entrepreneur Magazine. To subscribe, click here)