The Indian fashion retail industry has been on an upward trend, especially in the value-fashion segment (fashionable but affordable). Zudio is a subsidiary of Trent Limited (Tata Group) that is undergoing rapid growth, providing men, women, and children with fashionable apparel at competitive prices. It seems that the idea to start a Zudio store would be of interest to the business people, but how expensive is it?
This blog is about the cost of the Zudio franchise, capital to be raised, qualifications, the application process and what should be remembered before investment.
What is Zudio and why is it Attractive?
Zudio attracts consumers with low income and with a sense of fashion. The success of the brand in its rapid expansion in the cities of tier-1 and tier-2 in India, as well as smaller ones, is indicative of its popularity. It is due to this that several businesspeople are looking to take a franchise in order to enjoy the brand growth and consumer confidence.
Estimated Cost of Zudio Franchise
No complete, official breakdown of the public is available in an easily accessible format from Trent Limited; hence, the available data is based on different franchise listing websites and reports. The cost varies depending on location, store size, and city level, among other factors.
- According to some sources, there will be lower investment in smaller store formats, Rs. 50 lakh to Rs. 1 crore (~INR 0.5 cr to 1 cr).
- According to other sources, the amount is significantly higher, ranging from Rs. 1 to 3 crore. Businesses For Sale
- As an illustration, one of the listings is Rs. 2 crore to Rs. 5 crore for a full-scale store that needs vast space and a high number of visitors to start a franchise in India.
The cost typically includes:
- Franchise/brand fee: the amount was reported to be between Rs. 10-15 lakh in a few instances.
- Installation/interior and fitting: tens of lakhs depending on the size of the store.
- Beginning inventory: This is a huge inventory, again subject to the size of the store.
- Security deposit/lease advance: This has been said a hundred times as an investment.
Eligibility & Requirements
To obtain a Zudio franchise, one typically needs to meet specific requirements.
- Financial Capacity: It must have sufficient investment capability to cover the initial costs (initial setup, inventory, and lease) and also be in a position to sustain itself until breakeven.
- Store Location & Size: The proposed store should be situated in a high-traffic area, such as a mall or high-street retail location. The size of the store has been indicated as 3,000-8,000 sq ft, depending on the market.
- Business Experience and Devotion: The preferred qualifications vary, but it would be required that desired candidates possess previous retail or business experience, and would have to adhere to the Zudio brand and business principles.
- Legal/ Infrastructure Compliance: It would be required to conform to the store design and layout requirements of Zudio with valid registration of business entity, GST, trade licence, lease/rent agreements, and property.
How To Apply for a Zudio Franchise?
It is basically done in the following manner:
Step 1: Initial Enquiry
Go to the official Zudio website/Trent (or franchise portal) and complete an enquiry form, including business profile, proposed location, financial capacity and store information.
Step 2: Application & Screening
Zudio/Trent will look through your application, your financials, site viability and business experience and commitment.
Step 3: Location Selection and Contract
On approval, you would wrap up the store location, lease/space bargain, sign the franchise or store development agreement, pay the franchise/brand fee and deposit where necessary.
Step 4: Store Setup
Once approved, you will do interior fit-out, fixtures, inventory purchasing, staffing, training, and matching with the store design/branding requirements of Zudio.
Step 5: Launch & Operations
The store is opened when everything is ready, with the help of marketing/promotions of the brand, and you start operating under the franchise/partner model.
Potential ROI and Profitability
- Although location, size, operational efficiency, and local competition are significant factors in profitability, there are approximate indications based on certain data in franchise listings.
- Some reports give gross margins at 16-20% levels.
- The optimal locations are sometimes quoted as having a payback period (ROI) of about 2 -3 years.
- Higher places can generate monthly sales in the tens of lakhs, but the expenses and risks are also increased.
The most important point is to do thorough market research, consideration of rental/ leasing cost, staff cost, inventory turnover and marketing cost to model a realistic profit.
Key Considerations Before the Investment
- Determine whether there are franchise/partner stores in your city/region that are currently run by Zudio or not (some sources claim that they use the model where the company owns them).
- Be conversant with all costs: rent, lease advance, interior, inventory, staffing, marketing, and operational costs.
- Survey site: foot traffic, demographics, competition, and access.
- Ensure you are familiar with the operational rules, renewal process, and royalty/fee model of the brand.
- Get expert help (legal and financial) and then do not invest a large amount of capital.
- Include working capital requirements: until you are sure that operations are stable, you will require sufficient funds.
Conclusion
The franchise/store partner proposal with Zaudio can be an effective entry into the high-growth value fashion retail sector, particularly with a strong brand. It is, however, a very expensive venture (approximately Rs. 50 lakh to Rs. 3 crore, considering my size and location) and success highly relies on location, execution, and cost management.
It is also essential to keep in mind that before taking the next step, it is always advisable to obtain the latest and official data about Zudio/Trent Limited, read all relevant papers, and consider your business plan.
