Mumbai-based snack major Jumbo King has decided to re-model its business operations, whereby instead of appointing individual franchisees, it will go in for master franchisees.
Confirming this, Managing Director Dheeraj Gupta said, “We have seen that our franchisees who are operating multiple stores are far stronger and stable, and better able to weather ups and downs in the business environment than single-store operators. With this insight, the company has now decided to give out franchisees only to those who can invest in over five stores, or about Rs 50 lakh.”
It may be noted that in general, a franchise business requires a minimum investment of Rs 25 lakh to Rs 50 lakh. Since the Jumbo King model is low on investment, the thought is that the franchisee will be able to make multiple investments and reap better benefits.
Adds Gupta, “Unlike other food formats where he would invest all his money in one store and the risk of site selection would be very high, the same money spread across five locations gives him tremendous flexibility. Going forward, company-owned stores and master franchisees will be the strategy for Jumbo King.”
Besides, the company has also offered to buy back the stores within a stipulated period, whereby the franchisee’s investment gets protection at a certain depreciated rate. The role of the master franchisee will be that of a pure investor, while the company identifies the sites, puts up the store and manages it.
The brand is present in the states of Maharashtra and Gujarat, and is now looking at Mumbai, Hyderabad, Ahmedabad, Bengaluru, Nagpur, Pune and Delhi as focus areas.
– Zainab Morbiwala, Mumbai bureau