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In 2007, when Puma entered India, FDI in retail wasn’t allowed. Rather than a choice, franchising was the only option left for Puma. Currently out of the 330 stores Puma has in India, only 50 are company owned, rest 270 are franchised.
Talking about the closures over the years, Sanjay Roy, Executive Director – Sales, Puma Sports India shares, “We have probably closed only about two to three franchised stores.” Sharing more on keeping the relationship intact, he says, “Even in franchising, people have to invest and take the risk. In the initial days, many franchisees took a lot of time to get on board but whosoever came on board expanded more or less with us for over 10 years. Though we don’t share our commercials and under-right their losses, but we do understand the problem as a retailer ourselves and we know that we will do everything possible to correct the situation.”
Initially, the brand attracted a lot of distributors and traders becoming franchisees. Most of its franchisees have now opened 5 to 10 stores each. The brand now typically looks at having partners who could add up to five stores. Since retail is a business of higher rentals eating your profits, Puma has its most profitable store in Mohali, Punjab.
Puma conducts meet ups and mega shows almost twice a year to meet with franchisees. They are shown the new product range and get an opportunity to share their concerns with the entire management. Initially, the franchisees also spend about three to four days with the team in Bangalore. Top performing franchisees also get to travel to international headquarters of Puma.
Operating a multi-unit franchise, like Puma, requires you to play multiple roles spearheading projection, merchandising, visual display, etc, which are critical elements required to run a franchise operation along with robust IT structure. Running its own stores too, Puma understands and interacts with consumers on a daily basis, which helps them share the franchisee’s problems quickly.
(This article was first published in the January issue of Entrepreneur Magazine. To subscribe, click here)