India is an emerging retail hub — and those having a passion for retail, if thinking of investing in it can expect not just quick but huge returns on their investment. However, the best path to success passes through a supermarket franchise partnership. The retail industry in India, with the pace it is growing, has nurtured a favourable ground for retail players to grow in partnership with some most profitable franchises in India. Grocery 4U is a significant one among some of the most notable names among leading supermarket franchises in India.
India’s retail industry can be the best pick to ignite your entrepreneurial passion for starting a supermarket or a grocery store. The changing socio-economic structure of India’s business and buyers’ community triggered a growth projection of this sector. Industry experts believe that the retail market which was worth $0.7 trillion in 2019 will reach an estimated $1.1-1.3 trillion by 2025. Fueled by urbanization, income escalation, and an increase in nuclear families, this expansion brings you the opportunity to fulfill your dream of opening the best supermarket store in your city.
Planning a Supermarket Store, Start with Financial Considerations
Finance is the soul of every business. It must be the top priority among all your considerations when planning a supermarket store. A well-planned approach to financial fulfillment for your supermarket store will help you clearly define everything from how much money you put into the business to how much profit you make. A lack of clarity about the financial aspects will lead to business breakdown which might end in entrepreneurial failure. However, if you plan it out rightly, there is no stopping then.
To help you here with a real ballpark, we are sharing 3 important aspects of the supermarket business. To build a solid investment understanding for setting up your supermarket venture, the two aspects we are sharing must not be out of your sight. Here they are, have a look:
- Franchise Fee
The franchise fee is the initial financial consideration in starting a franchise-based supermarket store. You acquire the supermarket franchise rights from Grocery 4U. Not only this, you also get essential staff training along with our comprehensive support for national or regional marketing for store promotion. This also brings you access to our technology and software support which includes point-of-sale systems, inventory management software, and other technological requirements.
- Working Capital
Working capital is the second crucial aspect of financial planning for setting up your supermarket store. This includes the day-to-day operational costs, rent (in the case of a rented store facility), functional utilities, and employee salaries. From product costs to store maintenance, the working capital is an important financial holding for navigating unforeseen expenses in the course.
- Income and Profit
When you invest your hard-earned penny in a business, the real motivation part associated with the business investment is the earnings, i.e., the income and the profit you get out of investments. Without aiming to make a false impression of the supermarket industry or our positioning in the retail market as a supermarket franchise, we will show you the right earning path.
Grocery 4U Franchise Investment Across Multiple Business Models
With a sneak peek into the three key financial aspects of venturing into a supermarket business, you must have an idea of where your money will be put in. However, the real picture of the supermarket store setup is visible only when you decide on the franchise model. At Grocery 4U, we offer 3 distinct supermarket franchises which comprise Franchise Owned, Franchise Operated (FOFO), Franchise Owned, Company Operated, and Warehouse franchise models.
Every prospective franchise partner has complete freedom and flexibility in choosing the franchise model he prefers. Let’s look into the different financial factors associated with our franchise models. Let’s have a look:
1. Franchise Owned, Franchise Operated (FOFO) Model
Here are the key requirements:
- Area/Size: 500 sq.ft to 10,000 sq.ft
- Franchise Fee: Rs. 2,75,000 + GST
- Product Cost (Minimum Order): Rs. 1,500/- per sq.ft approx.
- Security Deposit: Rs. 5,00,000/- each (2 undated cheques)
- Interior Cost: Rs. 1,200/- per sq.ft approx.
- Software Fee: Rs. 55,000/- logins
Franchise Income Projection of FOFO Model:
- Approximate Rs. 2 to 5 Lac Per Month
- Income from appointing new franchises
- Total Income of Supermarket Store: Rs. 4,00,000/- P.M
The FOFO model offers a detailed calculation of income, including sales projections and additional income streams, making it a lucrative option for aspiring entrepreneurs.
Also Read : Grocery 4U’s Guide to Supermarket Location Planning
2. Franchise Owned Company Operated (FOCO) Model
Key requirements are as follows:
- Area/Size: 1,000 sq.ft to 10,000 sq.ft
- Franchise Fee: Rs. 2,75,000 + GST
- Franchise Investment Cost: Set up cost Rs. 4,200/- + GST
- Product Cost: Rs. 2,400/- per sq.ft.
- Agreement Time: 5 years
Company’s Work and Franchise Income:
- Company covers rent, electricity, staff salaries, operational expenses, marketing, and interior costs.
- Franchise earns a 10% commission on total monthly sales.
- Additional income for appointing new FOCO model franchises.
The FOCO model provides a comprehensive overview of the financial arrangement between the franchisee and the company, highlighting the shared responsibilities and potential income streams.
Also Read : Understanding Customer Psychology in Grocery Stores
3. Grocery 4U Warehouse Franchise Model
The financial fundamentals of our warehouse model are comprised of:
- Area/Size: 3,000 sq.ft to 5,000 sq.ft
- Franchise Fee: Rs. 4,50,000 + GST
- Interior Cost: Rs. 600/- per sq.ft + 18% GST
- Product Cost: Rs. 2,500/- per sq.ft.
- Total Investment: Rs. 3,208/- per sq.ft.
- Software Fee: Rs. 55,000/- per login (min required login -2)
- Agreement Time and Lock-in Time: 5 years / 3 years
Warehouse Franchise Income:
- Approximate Rs. 3 to 10 Lac Per Month
- The franchisee pays a royalty to the company for various services provided.
The Warehouse model highlights the financial aspects of investing in a distribution center, showcasing the potential income and the support provided by the company.
Final Thought
With a clear overview of the financial aspects, you will hardly have any other hurdle for setting up your franchise supermarket store in partnership with Grocery 4U. At Grocery 4U, we claim to be not just the best supermarket franchise in India but we are the fastest-growing as well. Within just a decade, we successfully expanded our franchisee network to 100 while building a loyal customer base across the country. To know more about what it takes to set up a supermarket or a grocery store in partnership with Grocery 4U, get in touch with us.
