“We will have franchisees in every format, except hypermarket and Reliance Fresh.”
“We would capitalise on the traditional retailers’ capabilities.”“The difficulty in locating land, negotiating a good deal and then the time taken to conclude a deal are the most significant challenges for our business.”
– Bijou Kurien, CEO, Reliance Retail Lifestyle.
In a major change of its retail roll out strategy, Reliance Retail, the retail arm of the Mukesh Ambani group, which so far has adopted ‘go it alone’ model, according to an Economic Times report, is now seeking to appoint franchisees for its various retail chains, excluding Reliance Mart (hypermarket) and Reliance Fresh (food and grocery supermarket) formats.
Reliance currently operates ten formats. These formats beside hypermarket and food & grocery include apparel, footwear, wellness, jewellery, electronics, and books & leisure.
The new model beside allowing rapid expansion of its operations will allow Reliance to leverage on business skills of small traders, who otherwise are up in arms against entry of big corporates in retail. This will also help the group in cope with skyrocketing real estate prices and delays involved in acquiring the same.
Apart from bringing in owners’ perspective, franchisees would also be able to run the business in a more cost efficient manner.
The new policy will have a significant impact can be judged from the fact that franchisees could eventually own as many as half of the total number of Reliance stores.
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1 response so far ↓
Niraj Jha // Mar 2, 2008 at 12:31 am
No doubt, Franchisee route could be the fastest route for aggressive expansion. However, the company may loose track in order to gain more speed.
I mean to say, expansion is good but the company should always ensure that customer satisfaction never gets adversely affected.
Hence, it should select its franchisees very carefully.
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