By Avanish Tiwari, Entrepreneur
Healthcare in India has always suffered due to the lack of adequate hospitals and testing centers in remote areas.
Three decades ago, with the aim of increasing the network in small towns to correct that, diagnostics chains in India decided to adopt the franchise model.
Back in 1981, the 60-year-old diagnostics chain, Dr Lal Pathlabs, began the diagnostics franchise model in India. It now boasts of more than 135 labs across the country. ?In the healthcare and diagnostics industry, it is we who brought in the trend of franchising. Like any other franchise model, ours is also based on a hub and spoke model,? says Dr. Arvind Lal, Chairman and Managing Director, Dr Lal Pathlabs.
In the hub and spoke model, there is one main laboratory at the central location (hub) around which small collection points (spokes) are located. At the end of the day, these collection points take all the testing samples to the main laboratory, where the actual testing is done.
Sanjeev Vashishta, Chief Executive Officer of SRL Diagnostics, says the reason they took the franchise path was when they realized that it was difficult for people to travel long distances for their diagnostics needs. SRL Diagnostics, which is the diagnostics arm of Fortis Hospitals, started operations in 1996, but did not adopt the franchise model until 2003. ?Right from the beginning we knew that we had to reach out to people, instead of expecting them to come to us. In 2003, we thought of having a franchise model which would reinforce our existing network in the remote areas,? Vashishta says.
The franchise model has also helped SRL Diagnostics get local support. ?As we are always moving ahead aggressively and want to have a pan-India presence, we realized that franchising is the way to go,? he adds.
The franchise model has also helped SRL Diagnostics get local support. Getty Images
All-India reach
The firm, Vashishta says, is now present in nearly every nook and corner of India. Speaking on the growth trajectory, he says that till 2006, they had only about 20 laboratories. Post 2006, the company spread much faster and now has 242 laboratories and more than 1,300 collection centers across India. ?We have labs in far-flung places like Imphal now,? he says.
The unique quality of the franchise model is that it can make the company?s presence felt in more places. Birla Kerala Vaidyashala (BKV), a part of Birla Wellness Private Ltd., which offers ayurveda treatment, was able to reach remote areas in the country with the help of their franchisees.
?The model allowed us to expand beyond Mumbai to Bengaluru, Chennai, Puducherry, Kerala, and smaller towns of Maharashtra like Shirdi, Wada, etc. It has also helped us increase our presence in Mumbai and Thane. Our revenues almost doubled in a very short period of 18 months,? informs Tanjai Kapoor, Vice President, Marketing and Sales, BKV.
The franchise journey, which BKV started 10 years ago, did not meet with success initially. The model started showing results only from 2009 after the management brought in a few strategic changes.
?It is only in the last three years that the numbers are up as we have minimized the investment from the company?s side and have been choosy in terms of access to good retail locations. We also started targeting niche segment such as clubs, residential societies and hotels,? says Kapoor. Over 30 percent of the overall revenues of the Kerala-based BKV comes from South India and they are also looking to expand in Andhra Pradesh and Karnataka.
Source: http://www.firstpost.com/business/why-franchising-is-the-way-ahead-for-diagnostics-655110.html
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