New Delhi, Sep 24 () : Future Group is to launch KB’s Fair Price and Aadhar shops on franchise basis all over India. These will function as neighbourhood stores.
Hearing that Future group is going to give out franchisees, around 100 kirana store (local grocery) owners turned up to bid for the franchise. Owned by Kishore Biyani, the group already operates Big Bazaar and Food Bazaar outlets across the country. It is now entering the neighbourhood store concept that is a successful business module in Japan, Singapore and Mexico.
The brand 7Eleven which is a small neighbourhood shop, is popular across Singapore, Taiwan and Japan and a similar concept is called Oxxo in Mexico. All these shops are doing thriving business despite big retailers in the trade.
Future Group has modelled its KB Fair Price shop on this concept to increase the present 170 shops to 900 in two years. At present, the 170 shops are company-owned but now it will be given to franchisees who will have the ownership but need to part with some money as royalty.
The agreement between KB and franchise is for nine years. The money given for registration and working capital cannot be pulled out for three years. Now, those who were managers in the existing KB Fair Price shops have taken up franchisees. The reason they cite is that KB shops are selling more than neighbourhood grocery stores.
Retailers face problems in outsourcing goods from various suppliers and are often facing petty issues which pull down the profit margins. Future group will act as a wholesale supplier to these Fair Price shops.
For the rural areas, its small stores will be branded Aadhar and in association with the National Schedule Caste Finance Devolpment, the franchisees will be given to those belonging to these castes to operate in semi-urban and rural areas.
Market analysts say that Future Group’s reason for entering the local grocer shop concept is to showcase to those coming in through FDI route for joint venture of its extensive network.