Tier 2 Cities: The Next Big Franchise Opportunity

Franchises in India are no longer confined to the biggest metros of the country. Franchise opportunities in India have become more realistic and relevant owing to the need for expansion of brand ideas into Tier 2 cities and regions, making them a more relevant and scalable business format.

In addition to the emergence of the changing consumption landscape in urban centers, consumers have grown an appeal towards an experience that brings about the combination of food, entertainment and an ambience. This has made way for franchisors to expand their ideas into other regions beyond the metros in India.

One such format that has become a franchise opportunity for expansion in Tier 1 and Tier 2 cities is Themis Barbecue House Franchise. It offers an entertainment and dining format where revenue generation comes from live barbecue, buffet dining, beverages and entertainment. The investment involved in the idea is expected to be around ₹3 crore and the area required is 5,000 sq. ft.

Investment required also makes a big difference when entering new markets. For instance, Brands and Branches lists Caha Franchise with the investment being around ₹1.25 to 1.5 crore and space being 1,500-2,000 sq. ft., which is considered appropriate for markets in a Tier 2 city.

Hence, for franchisees, the opportunity not only lies in expanding into Tier 2 cities. It also lies in identifying new business concepts which, with its investment level, space requirements, customer proposition and operational model, would help them thrive even in smaller cities.

As franchise business formats are expanding through various kinds of cities, the inclusion of Tier 2 cities in the growth strategy has become imperative for the whole franchise industry.