Effect of Demonetization on Franchising in India

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With the announcement of banning of Rs 1000 & Rs 500 from mid night of 8 November 2016, the government of India made a surprising and unexpected move. Motive of such an action was to unearth Black Money, reduce Terror attacks, vanish counterfeit currency and so on. Let us try to evaluate this decision from the business point of view especially franchise business which is still at nascent stage in India

As a matter of fact, it is evident so far that demonetization has put a severe impact on businesses across every industry. Under such circumstances when established players are finding it difficult to keep up the pace of their businesses, how far is it feasible for an individual to start a new business?

Logically speaking, one should be very cautious while putting his hard earned money into any new business at this stage. However, going forward the situation would certainly improve and we may see people investing more into new businesses as the government is planning to limit investments in Gold, Property etc. Also Franchising is considered to be a system driven business model and hence people would be attracted to this industry due to the nature of “Organized” model it follows under ideal conditions.

We may also expect lenient processes and lower interest rates in procuring business loans for setting up new businesses and reduction in property rates. So this could be a right stage to start exploring a suitable franchise business as the entire process may take around 3-6 months and by this time we will have clarity on most of the upcoming government policies.

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