How Amul grants franchise to retailers with no royalty, revenue share

If you are planning to kickstart your own business or invest in one, Amul has an answer for you. You can, in fact, quite easily take up an Amul franchisee. According to the Amul website, the franchisee owner does not have to pay any royalty or share any revenue with the company. The interested person would, however, have to invest something in between Rs 1.5 lakh to Rs 6 lakh for setting up of the shop. As estimated by the company, the owner can make from Rs 5 lakh to Rs 10 lakh per month.

Types of franchisee

One could go for Amul Preferred Outlet, Amul Railway Parlour or an Amul Kiosk. The shop will have to be 100-150 sq ft in area. For the abovementioned types of franchisee, the estimated investment required is around Rs 2 lakh. Out of that, Rs 25,000 is non-refundable brand security. Equipments will cost around Rs 70,000.

As the owner earns in commission on MRPs of Amul products, an owner of these formats would command 2.5% on pouch milk, 10% on milk products and 20% on ice cream.

The other type of franchisee that one could opt for is Amul Ice Cream Scooping Parlour that will need to be 300 sq ft in area. Investment in this type of format could go upto Rs 6 lakh approximately. In this type, the non-refundable brand security is Rs 50,000. The equipments here amount to Rs 1,50,000. All visicoolers and freezers must be Amul branded, as mentioned on the website.

As per commission, owners will get 50% on recipe-based ice cream scoops, sundaes, floats, shakes, pizzas, sandwiches, garlic bread and hot chocolate drink. Pre-packed ice creams would fetch the owner 20%, while other products will be sold with margins of 10%.

Operation

Amul wholesale dealers will supply stocks at the franchisee.  According to the website, the company also provides additional retail margins, exclusive consumer offers, store inauguration supports, equipment purchase supports and free brand signage. All branded equipments will be offered a subsidy.

Recurring expenses such as employee cost, electricity fee, shop rental would be cashed out by the franchisee from its gross retail margin.