Why Small Businesses Need a Pharma Franchise Company

With the pharma industry on an upward swing, many small and medium industries have also registered impressive growth. In fact, one of the outstanding features of its growth has been the prominent role played by the SME sector. As India features among the leading players in world trade in terms of volume, it is the generic drugs produced by this sector that is primarily responsible for this position.

But this is not an easy feat for a small or medium sized company to achieve. An important partner in this growth has been pharma franchise companies. Hiring franchises has been a win-win situation for the pharmaceutical sector. The franchise has the support of the parent company, its brand name and product. The benefits for the parent company are also considerable.

Localised knowledge: Franchises are selected from local players. These are usually firms that have some kind of local presence with a unit in place or a task force. This localised knowledge can be critical for the parent company that is trying to penetrate into the local market. They can benefit from the knowledge of important local factors like consumer preferences, demographics and buying power.

These factors can be critical when deciding on other important parameters like inventory. For instance, a local franchise can tell you if sales of product X are typically high in their area. You can stock your inventory and even decide on manufacturing volume accordingly.

Exploring new markets: As a business does well, it starts looking outwards for new markets and consumers. Unfortunately, this is not so easy for a small firm. Expansion requires considerable stretching of resources, which a small firm is often not able to afford. Although they can stretch their manufacturing volume, other infrastructure support – such as premises, salespeople etc – are not so easy to procure. A franchise is the easiest way to enter a new market. The parent company can piggyback on its franchise.

Distribution network: One of the weakness of small companies is their inadequate distribution network. Unlike big companies, keeping local offices, sales staff and a nationwide distribution network is simply too untenable for a small business. A pharma franchise company is the quicker solution to this problem. With a local franchise you can benefit from a local business with an established distribution network. This can be achieved with barely any investment at all!

Funding: Another drawback of smaller companies is their lack of funding options. Small and medium companies operate with a small operating capital, making any source of legalised funding welcome. Franchises are often seen as the easiest way to achieve this. A franchise uses the parent company’s brand and goods in return for a license fee – a source of acquiring funds.

Invested in growth: With franchises you have a partner who is invested in our growth. After all, your goods, brand name and functioning will determine the success of their own venture. Consequently, franchises can be akin to your local partners who have invested in your growth in not just money, but also through hard work, marketing and a dedication to a joint success.

Low risk: Franchises are seen as one of the lowest risk options for small businesses. Expanding through your own units may give you better quality control and a larger share in profits. But on the other hand it can also stretch your resources thin and expose you dangerously to any collapse. In fact, many small business meet their doom because of unwieldy expansion.

A franchise, on the other hand, lowers your risks considerably. The money invested is considerably smaller. The inside knowledge of the local market more than compensates for other drawbacks. While your share in profits may not be full, you will also escape from a disastrous loss. You are also saved from compensations to employees and other partners in case of loss.

Bigger brand presence: A franchise carries your brand forward to newer markets and users. With its prop, a small company can have a nationwide brand presence. The franchise can also bring local flavour to your brand by using their own local knowledge for greater consumer engagement. In short, a franchise can be a handy partner in brand management.


As small and medium scale industries record impressive growth in the pharma sector, they are in dire need of suitable partners to foster this growth. Pharma franchise companies can play a vital function in this role.

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