Are you looking for a business opportunity in the apparel and lifestyle retail space? Starting a FabIndia franchise could be a great option for you. Established in 1960, FabIndia is a famous brand in India that offers authentic handmade products including clothing, home furnishings, and personal care items. In this article, we’ll discuss the cost, fee, and profit involved in opening a FabIndia franchise.
Introduction to FabIndia Franchise
FabIndia is a well-known brand that sells a wide range of Indian ethnic products across India and abroad. The brand has more than 300 retail stores across India and is expanding rapidly. They offer a unique range of products that are handcrafted and made using traditional Indian techniques. FabIndia’s success lies in their ability to blend traditional craftsmanship with modern designs, creating beautiful and unique products that attract a diverse range of customers.
The Franchise Cost
The cost of starting a FabIndia franchise varies depending on factors such as the location of the store, size, and type of the outlet. For a FabIndia Experience Center, the franchise fee is around INR 15-20 lakhs, and the estimated cost of starting the store is around INR 40-50 lakhs. For a FabIndia Lifestyle Store, the franchise fee ranges between INR 10-15 lakhs, and the estimated cost of opening the store is around INR 20-30 lakhs. FabIndia expects its franchisees to have a minimum net-worth of INR 75 lakhs and a space requirement of at least 1200 sq. ft.
The Franchise Fee
Apart from the initial franchise fee, the franchisee is required to sign an agreement that involves a 7% royalty fee on the monthly sales turnover and a 2% marketing fee towards the FabIndia brand. The agreement usually has a tenure of five years.
The Profit
The profit margin in a FabIndia franchise varies depending on customer footfall, location, and competition. Typically, a FabIndia franchise can expect a profit margin of around 30-40%. The profit is generated by selling FabIndia’s diversified range of handmade products under different categories such as clothing, home decor, personal care products, and accessories.
Also Read this: How to Start a Zudio Franchise: Total Investment & Profit
Eligibility Criteria
To qualify as a FabIndia franchisee, candidates are required to:
- Have a minimum net-worth of INR 75 lakhs
- Have a space requirement of at least 1200 sq. ft.
- Possess a minimum of five years of experience in retail business operations
- Be willing to invest in the franchise
The FabIndia Franchise Eligibility Criteria in columns:
| Criteria | Description |
|---|---|
| Age | Minimum age of 25 years |
| Education | Minimum graduation degree |
| Experience | Minimum 5 years of experience in retail or fashion industry |
| Net worth | Minimum net worth of INR 50 lakhs |
| Liquid assets | Minimum liquid assets of INR 25 lakhs |
| Location | Franchise must be located in a prime location with high footfall |
| Space | Minimum space requirement of 1000-2500 sq.ft. |
| Budget | Minimum investment budget of INR 50-100 lakhs |
| Financial stability | Franchisee must have a good credit history and be able to obtain financing |
| Commitment | Franchisee must be committed to the brand and its values |
Steps to Start a FabIndia Franchise
If you meet the eligibility criteria and seek to open a FabIndia franchise, the following steps may help:
Step 1: Evaluate yourself
Before investing in any franchise, it is crucial to evaluate your strengths, weaknesses, and financial goals. Like any business venture, opening a FabIndia franchise involves a significant investment, and it is essential to understand the risks and rewards of the business.
Step 2: Connect with FabIndia
Once you have evaluated yourself, the next step is to connect with FabIndia’s franchise team. You can visit the official FabIndia website or call their toll-free number to know more about their franchise opportunities.
Step 3: Submit your Application
After initiating the conversation, you will be required to submit your franchise application to the Franchise Recruitment cell at FabIndia. The application should include your business plan, financial statements, and your experience in the retail industry.
Step 4: Sign the Franchise Agreement
If your franchise application is accepted by FabIndia, the next step is to sign the franchise agreement. Carefully read the terms and conditions of the agreement before signing.
Step 5: Launch Your FabIndia Franchise
Once you have signed the agreement, you can launch your FabIndia franchise. The brand provides support to the franchisees in several areas, including store set-up, advertising, marketing campaigns, and training.
Financial Status of FabIndia
FabIndia is an Indian company that is privately owned and sells ethnic clothing, home decor, and food. It began in 1976, and its main office is in Delhi.
Here’s how the company’s finances look:
- Revenue: Over INR 500 crores (~$650 million) in FY 2022
- EBITDA: INR 100 crores (~$125 million) in FY 2022
- Net profit: INR 20 crores (~$25 million) in FY 2022
- Debt: INR 200 crores (~$250 million) in FY 2022
- Equity: INR 300 crores (~$375 million) in FY 2022
In the past few years, the company has done well financially. In the last five years, revenue has grown at a CAGR of 15% and EBITDA has grown at a CAGR of 20%. The net profit has also gone up, but at a slower 10% rate.
The company has a low amount of debt and a strong amount of wealth. This makes sure that the company has enough money to keep growing.
Pros and cons of FabIndia Franchise
Pros:
- Strong brand recognition: In India, FabIndia is a well-known and recognized brand, and its customers are loyal. This can give your business a big edge over others in the same field.
- Access to a proven business model: Access to a business model that has been successful in other markets. FabIndia has been in business for more than 40 years, and their business model has been successful in many different markets. This can give you peace of mind, since you’ll know that the business you’re starting has a good chance of doing well.
- Training and assistance: FabIndia partners get a lot of training and help from the company. This includes learning about the company’s goods, how to market and sell them, and how to run the business.
- Opportunity to grow: FabIndia is a company that is growing, and they are always looking for new partners. This means that your business has a chance to grow along with the company.
Cons:
- High franchise fee: A FabIndia business has a pretty high franchise fee. This can make it hard for some people who want to buy a business to do so.
- Royalties and marketing fees: FabIndia also charges owners royalties and marketing fees on top of the license fee. These costs can add up, so you should include them in your business plan.
- Competition: FabIndia is a well-known name, so there is a lot of competition in the market. This means you will have to work hard to make your business stand out from the rest.
Conclusion
Opening a FabIndia franchise can be a lucrative business opportunity for those who possess the requisite investment and experience in the retail industry. The brand has a loyal customer base and a diversified product portfolio. To get started, evaluate yourself, connect with FabIndia’s franchise team, and submit your application. If you pass the screening process, sign the franchise agreement, and launch your FabIndia franchise.