Thursday, April 11, 2024
HomeApparel FranchiseHow can you become a Zudio Franchise? - Apply, Cost, & Profit

How can you become a Zudio Franchise? – Apply, Cost, & Profit

The demand for an apparel franchise that primarily deals in the affordable and premium segments is insane. No matter where you go, you’ll always find several fancy clothing stores, either family-owned or franchise stores, garnering a huge crowd at their stores.

While considering its potential, you may opt for owning your own clothing store in your area by procuring materials from the local market or the nearest apparel hub state. But believe me, you have to drive nuts to generate those impressive sales.

Making money in the apparel industry isn’t a big thing; all you need to do is partner with any of the popular clothing and fashion franchises (like Zudio Franchise) and stick with them with full passion.

You may find numerous apparel franchises booming in India, but the chances of partnering with them are as slim as Pakistan beating India in the Cricket World Cup.

Therefore, to elaborate further and make your life hassle-free, there couldn’t be any better chain except the Zudio. Here are a few things that you can get your answers to after the completion of this article:

  1. A complete overview of Zudio
  2. How much would you necessarily invest to become their franchisee?
  3. What is the profit margin and ROI from the ZUDIO?
  4. quick alternatives, requirements, and our final call on it.
Zudio franchise outlet
  • Brand: Zudio
  • Founded: 2016
  • Franchise model: FOCO
  • Space Required: 6000–8000 sq. ft.
  • Franchise fee: ₹10 lakh
  • Security Deposit (6-month rental): ₹29 lakh
  • Stamp Duty and Registration: ₹20 lakh
  • Consultancy/Brokerage : ₹ 2 lakh
  • Total Investment: ₹ 2–3 crores

Quick Background on Zudio Franchise

To trace back its fundamental brand image among Indian consumers and the background of the brand, you’ll need to travel back to 2016, when Zudio’s first outlet was inaugurated in Bangalore, India.

Zudio is one of the subsidiary retail networks of the Trent Group, which is also fully owned and controlled by the TATA Group. With its single inaugural store in India, Zudio has now become a gigantic fashion retail chain with more than 350 outlets across 119 cities.

The franchise is known for offering a diverse range of trendy, fashionable, and premium apparel products, all at affordable pricing.

The entire product portfolio at Zudio stores is primarily targeted at youth, which eventually brings in immense customer traffic at any fashion or retail store.

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How did Zudio grow so rapidly in just 7 years?

TATA Group is no new name for any Indian, and with their legacy of operating multiple businesses across the country and international locations, there is certainly no brand standing next to them (at least for the start-ups), and obviously, Reliance and a few international brands are exceptions to this.

  1. Entry, quality, and untapped market:
    • When Zudio marked its presence among local customers, the overall apparel industry was unorganized, and there were very few brands offering quality products at affordable prices.
  2. Understanding the Indian Market:
    • The Trent Group was quick to acquire the affordable market segments, and TATA’s expertise and years of research have enabled them to explore the market and grab the potential customer base.
  3. The franchise model itself:
    • Yes, indeed, the business model of Zudio itself has aided them to grow at such a rapid pace.
      • Zudio primarily works on the FICO model (which we’ll discuss in detail in the upcoming topic).

Fundamentals of Zudio

Sr. No.TypePublic
1Trade NameBrand Name: Zudio
Traded as Trent ( NSE and BSE)
parent company
2IndustryApparel and Fashion
4Founders Or Parent CompanyParent Brand: Trent Group
5Corporate HeadquartersMumbai, MH, India
6Number of locations350 outlets
7Area servedPAN India
8ModelFICO and COCO
9Services offeringApparel and fashion range for Men,
women, and children
10Revenue₹114 Crore in Q1 FY22

How is the Zudio franchise positioned in the apparel industry?

Being currently owned and operated under the name of Pioneer Brand (TATA), Zudio has certainly all the characteristics to feature in the Top 5 retail apparel and fashion retail chains in India.

As mentioned earlier about the immense growth potential of India’s apparel industry, the India Brand Equity Foundation‘s research report states that textiles and apparel exports from India, which were valued at US$37 billion, are expected to reach US$190 billion by FY26.

Now, that’s a staggering CAGR growth of 10% during the financial year 2020–2025.

Apparel Industry market size

Zudio has been continuously expanding its market presence across the country, and its latest trendy apparel range offerings, growing brand awareness, competitive pricing, and strategic outlet placement will definitely fuel the overall growth rate for the franchise.

How much does a Zudio franchise cost?

Zudio franchise cost

Zudio has been quite specific in selecting a prominent location in any part of the country, and indeed, the strategic placement of their outlets has also led them to draw customer’s across the city, ultimately helping them to build a regular revenue stream.

It is also important to mention that every Zudio outlet is nearly spread out over 4000 square feet or more, and it demands a significant investment in setting up their store, which includes fees such as franchise fees, inventory costs, the outlet’s renovations, and rent (obviously, if not owned).

As stated in Trent’s latest annual report, the Zudio franchise cost for a store size of at least 6000–8000 square feet may range between ₹3 crore and ₹4 crore.

However, it isn’t necessary to have a store size of 6,000 square feet; one can definitely go ahead and apply for Zudio’s franchises with a retail space of 4000 square feet, which would ultimately reduce the initial investment ask to ₹2 crore to ₹3 crore.

A few more extensive details on it:

EssentialsCapital required and other details
Key product offeringsFashion and Apparel for Men, Women, and Kids
Space requiredMin. 3000–6000 sq. ft.
Franchise ModelFOCO (franchise-owned company operated)
Year and City of Establishment2016 in Bengaluru (India)
Number of franchise outlet and CityOver 352 outlets in 119 cities
Capex Required₹3 crore – ₹4 crore
Revenue sharing~ 16%
Franchisee Fee10 lakh
Return on Investment30-36 months
Return on Capital Employed60% at Store level
Internal rate of return12-15%
License Period7 Years

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How much is the Zudio franchise profit margin?

The profitability section for the Zudio outlet has been divided into two segments. While we provide the necessary guidelines on its profit margin in this segment, you shouldn’t miss the ultimate answer: Is Zudio profitable?

Unlike other franchise-owned and operated models (FOFO), Zudio embraces the FOCO model, where the franchise owns the outlet but the Zudio team operates the overall operation of the outlet.

The reason for Zudio following the FOCO model is quite obvious: the amount of investment, scale, and expertise required to hassle-freely operate its outlet.

For every approved Zudio franchise owner, the chain provides a fixed revenue share/profit margin of around ~16% and 12–15% of the internal rate of return on the lump sum invested.

While the fixed margin of 16% may seem quite low for many of its aspiring candidates, there is a catch. Let’s catch that out in the upcoming section.

Is Zudio franchise profitable?

Well, none can have a perfect answer for it, as the net profitability of any apparel store is widely dependent on the brand image, the quality and pricing of the products, and the inventory turnaround time.

However, when someone considers looking at its financial summary, there could be a few major takeaways:

  1. In its latest financial report for FY23, while Zudio’s parent brand, Trent, posted an 83% jump in revenue compared to the previous year, Zudio registered an impressive sales growth of approximately 219%.
  2. Even some of the findings and in-depth reports from another popular brokerage firm, 5 Paisa, suggest that while one may assume Zudio is a fresh brand of TATA, its over 40% contribution to total revenue shouldn’t be overlooked.

To conclude, Zudio is one of the important retail segments of Trent Group (a TATA subsidiary), and certainly over a period, they haven’t only expanded their presence but also provided better profit returns to their franchisees or investors.

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Is the Zudio franchise worth the investment?

To shed light on its worthiness, we need to analyze the investment and its ROI. So, let’s delve into it:

Margin sharing on ZUDIO FOCO Model

Product MRP100%
Total Gross Margin38%
Franchisee Margin (FOCO)16%
Franchisor Margin22%

Per-store metrics for Zudio franchise

Key RequirementsDetails
Size (sq. ft.)6000–8000 sq. ft.
Investment (INR/sq ft.)₹2000/sq. ft.
Size (in sq. ft. for calculation)6000 sq. ft.
Rent/month/sqft (INR)₹80 per month per square foot
Capex₹1.2 Crores
Franchisee Fee₹10 lakh
Security Deposit (6-month rental)₹29 lakh
Stamp Duty and Registration₹20 lakh
Consultancy/Brokerage₹2 lakh
Total Investment (per store)₹3 crore to 4 crore per store

The above-tabled data provides a clear insight into Zudio’s initial capital requirement and estimated profit margin.

However, a selected franchisee is expected to invest at least ₹2 crore to ₹4 crore to setup its outlet, but they can also enjoy a fixed revenue share of 16%, which is certainly not guaranteed in any business.

Below are some major reasons to prove Zudio’s worthiness. However, it is always advised to perform a detailed brand and market analysis.

  1. Considering the midpoint investment of at least ₹3 crore and the quoted profit margin of ~16%, an approved outlet owner can eventually anticipate recouping their initial investment in at least 5-7 years.
  2. Additionally, if the verified financial data is taken into consideration, a Zudio partner can ultimately expect the recovery of their investment in 30-36 months, which eventually implies a yearly income of ₹1 crore. Isn’t it an impressive return?

You can check out the sources for it.

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What does it require to become a Zudio franchisee?

As stated earlier in the post, Zudio is quite choosy in selecting the franchise partner and its outlet locations. One has to meet the following demands to become one of their partners:

  1. The partner should be financially sound and capable enough to spend at least ₹2 crore to ₹3 crore (however, the capital may vary depending on the available carpet area and inventory).
  2. However, the store size should be at least 4000 square feet, but it is also important to select a proper retail space in a high-footfall area with at least a store frontage of 40 feet.
  3. Though the company manages the entire outlet operations on its own, it is also advisable for the franchisee to have a few years of extensive experience in handling renowned apparel stores.
  4. Additionally, please check out the responsibilities of its franchisor and franchisee.

What are the responsibilities of the Zudio franchisee and the franchisor?

The responsibilities of the franchisee and franchisor are crisp and clear. Let’s delve into them one by one for more detailed information:

  1. Franchisee:
    • Basically, a franchisee refers to someone who owns and invests in the outlet. In this case, it will be you.
      • Your primary responsibility will be covering the rent and electricity costs.
  2. Franchisor (Zudio Team):
    • In this case, Zudio will be the franchisor (basically, who offers the franchise). It takes care of expenses like an employee salary, inventory management (transportation, discount, shrinkage, etc.), housekeeping, security, and all day-to-day expenditures.

What are the alternatives to the Zudio franchise?

Undoubtedly, partnering with a brand like Zudio would benefit its outlet owner. However, considering its extensive market presence, in-depth research into localities, and the tremendous demand for its franchises, it can be challenging for the chain to respond to every query instantly.

At FranchiseGoal, we strongly advise interested candidates to follow the legitimate process outlined on our website and to avoid paying any fees to anyone promising to provide you with Zudio’s franchise.

While you do the initial research on apparel franchises, you may consider a few viable options:

PUMA Franchise

Yes, we understand that Zudio and PUMA offer different product ranges, and their pricing varies drastically. However, when considering Zudio’s outlet investment, one should not overlook including PUMA in their list.

One of the most popular international sportswear brands, PUMA, was established in 1948 by German entrepreneur Rudolf Dassler. With over 1000 exclusive showrooms and nearly 1000 MBO (multi-brand outlets), PUMA is certainly recognized as India’s No. 1 sportswear brand.

Unlike Zudio, you may not require a substantial initial investment. Entrepreneurs looking to venture into the apparel and fashion industry can take up franchises with an initial investment of merely ₹1 crore and can anticipate a healthy profit margin of over 20%.

Read more: Start a PUMA Franchise in India – Cost, Fee, & Profit

Max Franchise

Max Fashion is undeniably a leading apparel and fashion brand that competes with brands like Zudio, Yousta, and others. The chain entered the Indian market in 2006, and since then, it has expanded its operations across several cities in India.

According to the official report, Max Fashion has grown into a brand that operates over 500+ outlets in 20 countries and has exhibited a growth rate of 38% per annum.

To become an approved franchisee, you may need to have a similar investment range as Zudio. According to IndiaRetailing, one should be prepared to invest at least ₹2.5 crore to open a Max Store franchise.

Read more: How to Get Max Fashion Franchise? – Cost, Fee, & Profit

Tabular comparison

Tabular comparison of Zudio, Max, and PUMA

How to Get a Zudio franchise?

We hope by this time you will have in-depth knowledge about Zudio and its business model. Though you may have received our guidance for its cost and profit and are ready to take this partnership to the next level, here are a few things that need your consideration:

  1. There aren’t official contact details to get in touch with Zudio’s officials. If you find one, then consider verifying its authenticity.
  2. However, the official website contains the franchise form, but filling it out can’t guarantee whether you’ll be selected as an approved candidate.

Follow the given steps to become their partner:

  1. Visit Zudio’s official website and navigate to the franchise window.
    • Fill in the personal information, including name, email, phone number, city, state, and others.
Apply for ZudioGet Started

The Editor’s Thought

Since our first coverage on Zudio, we have experienced a significant surge for its franchises, with almost over 200 queries.

Undoubtedly, partnering with Zudio will demand substantial capital, and the entrepreneurs should be aware of their business inside and out, along with its key risks.

While the franchise has laid out its future expansion plans to open more outlets in Tier 2 and Tier 3 cities, the recent entry of Yousta can’t be overlooked.

But the only good news is that Yousta doesn’t sell its franchises; it is owned and operated by Reliance Retail (so, yes, the competition isn’t over yet).

If you have enough capital and are passionate about the apparel and retail industry, then you shouldn’t wait to partner with the brand before someone else applies for your location.

Please let me know your thoughts on this article and share it with your friends, relatives, and colleagues who are looking for Zudio.

Good Luck!! Happy Franchising!!

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  1. How much capital will one require to become a Zudio franchise?

    It varies widely depending on the available carpet area. However, for 6,000 square feet, Zudio expects its franchisee to invest at least ₹3 crore to ₹4 crore.

  2. What is the ideal location for the Zudio outlet?

    The ideal outlet size should be a minimum of 4000 square feet with a store frontage of 40 feet and plenty of parking space. Additionally, the chosen location should be near its competitors and high-street areas.

  3. Does Zudio take property on rent?

    According to official information and our findings, Zudio only partners with potential candidates who share a similar vision and are capable of paying off their initial investment, rent, and electricity bills. Unfortunately, there is no such option available for renting out the premises to Zudio.

  4. Why has Zudio not replied to your franchise inquiry?

    There could be some scenarios:
    1. Invalid or incomplete franchise form
    2. The applied location is already occupied
    3. Someone else may have already requested it from the same area prior to your application.
    4. The company doesn’t estimate the potential growth for the proposed location, and they may provide some alternatives to it.

  5. Is there any Zudio franchise contact number?

    Absolutely No, there isn’t any official contact number. Incase you find one, do consider verifying its authenticity before making any payment.

FranchiseGoal India
FranchiseGoal India
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