1. FRANCHISING & LICENSING LexCounsel, Law Offices
IN INDIA
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2. LexCounsel, Law Offices
Different Routes for entering the Indian market:
Wholly-owned subsidiary company; or
Joint venture company; or
Branch Office; or
Franchise Business model.
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3. GENERAL OVERVIEW OF FRANCHISING LexCounsel, Law Offices
IN INDIA
Contributing Factors for Franchising Wave in India:
Huge consumer base of over a billion people;
Booming economy with flourishing urban & middle class consumers;
Brand awareness and quality consciousness;
Abundance of human resources;
Entrepreneurial skills.
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4. LexCounsel, Law Offices
Fact Assessment:
Impressive growth of around 30-35% over the last 4-5 years;
An estimated annual turnover of US$ 4 billion;
there are close to over 70,000 franchisee in the Indian market;
Contributes approximately 9% of the GDP of the country;
It is the second fastest growing industry in India; and
It has been successful in approximately 35 different sectors.
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5. LexCounsel, Law Offices
What is Franchising:
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6. LexCounsel, Law Offices
The Franchisor licenses the right to use his business format for a limited period of time.
Franchisee does not gain any interest in the ownership of the format or the associated marks.
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- No difference between the outlets of the Franchisor and the Franchisee, as regards:
decor of the outlets;
selection of goods or services; and
staff uniforms.
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8. ADVANTAGES OF FRANCHISE TO FRANCHISOR LexCounsel, Law Offices
Gains Franchisee’s knowledge of the territory;
Access to local sales channel and marketing expertise;
Reduces investment;
Minimum government approvals;
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9. Freedom from recruitment of local workforce; and
Accelerated network growth and profitability.

10. ADVANTAGES OF FRANCHISE TO FRANCHISEE LexCounsel, Law Offices
Opportunity for the young entrepreneurs to associate with a known and credible brand;
Opportunity to develop the business on assured business model and become successful; and
Gains from the Franchisor the entire business concept with network of technical, managerial and training support.
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11. LexCounsel, Law Offices
MODELS OF FRANCHISING
There are three distinct models of franchising:
Product Distribution Franchising involving a co-operation for the distribution of goods, mostly in retail business;
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12. LexCounsel, Law Offices
Trade Name Franchising where the Franchisee uses the trademark/business name of the Franchisor in order to sell its own product or services;
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13. LexCounsel, Law Offices
Business Format Franchising a combination of the other two types of franchising using the Franchisor’s trademark/business name in order to distribute the Franchisor’s goods or services.
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14. LexCounsel, Law Offices
LEGAL FRAMEWORK
No consolidated franchise specific legislation. Important laws which affect the franchise arrangement in India are:
The Indian Contract Act, 1872;
The Competition Act, 2002;
The Trade Marks Act, 1999;
The Copyright Act, 1957;
The Consumer Protection Act, 1986;
Labour and Taxation Laws; and
The Foreign Exchange Management Act,
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15. SIGNIFICANT CONTRACTUAL AND LEGAL ISSUES LexCounsel, Law Offices
Enforcement of obligations and non- compete covenant;
Payment Terms & Taxes;
Duration, Renewal & Termination of the Franchise Agreements;
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16. LexCounsel, Law Offices
Post Termination Issues;
Governing Laws and Implementation of Laws;
Agency Issues; and
Consumer Protection & Anti-Competition.
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17. LICENSING & USE OF INTELLECTUAL PROPERTY RIGHTS
Important aspects of a Licensing Arrangement :
Registration;
Use/license and Scope of the License;
Misuse/unauthorized use of the Trade Mark; and
Protection.
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18. LexCounsel, Law Offices
ENTRIES OF BRANDS THROUGH FRANCHISE BUSINESS MODELS ASSISTED BY LEXCOUNSEL
Nike is one of the leading sportswear and equipment supplier based in the United States.
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Salvatore Ferragamo, is one of the world’s leading fashion brands in luxury goods. The group is active in the creation, production and distribution of shoes, leather goods, apparels, silk products, fashion accessories like eyewear and watches and fragrances for men and women.
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Fratelli Rossetti is one of the leading Italian companies in luxury footwear field.
Levi’s, is a worldwide known brand of apparels. Recently, it has also launched its footwear range in India.
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Tommy Hilfiger, is one of the leading multinational designer brand.
Lotto Sport Italia, is an Italian sports apparel manufacturer.
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Dockers, is a leading brand of business casual clothing for men and women.
H2O+, is one of the leading brands of skin care products.
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23. LexCounsel, Law Offices
Paul Smith, is a clothing brand owned by leading English designer Sir Paul Smith.
Florsheim, is one of the world’s leading shoe brand.
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24. LexCounsel, Law Offices
SEEMA JHINGAN & DIMPY MOHANTY
PARTNERS
LEXCOUNSEL, LAW OFFICES
C-10, GULMOHAR PARK
NEW DELHI
INDIA
TEL:
FAX:
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