Hospitals take to franchising In India For Their Expansions

Considering the huge investment needed for establishing the necessary healthcare infrastructure in the country,franchising is emerging as a viable option for hospitals to expand to newer geographies.

According to estimates, the healthcare industry in India is short of one million beds and this requires a capital investment of $30 to $40 billion. This is where franchising comes as a model for healthcare franchise to attract investments from non-medical investors.

Apollo Hospitals is one among the pioneers to have sought franchisee model for its clinics. According to Ratan Jalan, former CEO of Apollo Health and Lifestyle and in-charge of the Apollo Clinics, ‘responsible franchising’ is a successful model for developing healthcare infrastructure.

“Careful choice of franchisee and increased involvement of the franchisor, training, technologies and people selection is needed in healthcare more than any other business. Less than 10 per cent of Apollo’s franchisees have any medical background. But they have a passion for healthcare, quality and focus, besides financial resources. Substantial involvement from the part of franchisor, at least in the initial stages is crucial,” he said.

According to Gaurav Marya, president of Franchise India, the franchisee brings in capital, local know-how and entrepreneurial enthusiasm to the business. “Currently, only five per cent of the hospitals in the private sector are franchisee-operated. But the potential is huge as healthcare is a highly capital-intensive business,” he said.

V Vijayakumar, MD of V V Dentistree sees franchising as an option to replicate standardized protocols and practices in smaller towns. The dental chain with six centres in Chennai is looking at having a network of franchisee-operated clinics after it builds up the brand in all the four metros.

However, Dr Amar Agarwal, CMD of Dr Agarwal’s Eye Hospital finds that transferring the vision and ensuring the same-level of quality are major challenges in a franchising model.