Growth time for Healthcare Franchise Business in India - The India Saga



Growth time for Healthcare Franchise Business in India

Shalby Hospitals to set up 100 dedicated franchise orthopedic centres across India Franchise model of business has become an integral…

Growth time for Healthcare Franchise Business in India

Shalby Hospitals to set up 100 dedicated franchise orthopedic centres across India

Franchise model of business has become an integral part of every major economy in the world.  Globally, one out of seven businesses is a franchise, and on an average 300 companies start franchising every year. International brands like McDonalds, Pizza Hut, Subway and KFC have penetrated across the world through franchise model. Close home, Indian brands such as Tanishq, Titan, Patanjali, Lenskart and many others have thrived through franchise model. Franchise model is generally mutually beneficial to the franchiser and the franchisee.

Compared to other sectors, franchise model in healthcare industry in India is still limited. There are just a handful of big players who operate through franchises in Primary Care Clinics, Diagnostics & Daycare Surgery Hospitals. However, experts believe that the situation is likely to change rapidly. Healthcare is one of the fastest growing segments in India presently. According to a report by Assocham and research firm RNCOS India’s healthcare sector was worth about 160 billion US dollars in 2017 and it is expected to reach USD 372 billion by 2022.  This presents a unique opportunity for franchise business, especially in the single specialty small hospitals sector. One of the specialties that is expected to grow exponentially through franchise model is orthopedics. It offers attractive investment opportunities for people looking for a franchise business in the recession-proof healthcare sector. Shalby Hospitals, one of the most reputed multispecialty hospital chains that has carved a niche in orthopedics with a market share of 15% of joint replacement surgeries among private players in India has recently announced plans to diversify through franchise model with SOCE (Shalby Orthopedic Centre of Excellence). We spoke to Mr. Sunil Mehta, Senior VP, Shalby Hospitals to know about this more.

Why is Shalby venturing through franchise model? What are your plans?

Shalby is one of the biggest players in orthopedics in the country. We perform 10,000 knee replacement surgeries in a year, which is almost 15% of the surgeries done by private hospitals in India, besides a large number of other orthopedic procedures. However, almost all our hospitals are located in big cities. People come to Shalby for joint replacement as well as other complex orthopedic procedures from metro as well as non-metro cities. Thus, it is natural for us to set up specialized orthopedic hospitals in these centres. As we are planning 100 such hospitals in next five years we have adopted franchise model. This will enable us to roll out a number of small orthopedic hospitals in multiple locations simultaneously. It is a win win situation for the franchise as well as the patients. The franchise will get a ready market of patients driven by the trust our brand has won, and patients will be able to avail quality orthopedic care near their home. The franchisee will be investing in a ready-to-run business with 27 years of legacy and a track record of patient trust and uncompromising quality commitment.

What is SOCE?

SOCE, which is acronym for Shalby Orthopedic Centre of Excellence, is a dedicated, state-of-the-art, full service, walk-in orthopedic centres for quality treatment of all orthopedic diseases and sports injuries under one roof. We aim to set up these centres all across India, including in metro as well as non-metro cities. Leveraging on the brand name that Shalby has earned in orthopedics through years, this will be IndiaÂs first chain of dedicated orthopedic centres. SOCE will offer services for simple as well as complex orthopedic procedures including knee and hip joint replacement surgeries. In short, SOCE will be your one-stop destination for all orthopedic needs.

What are two models of your franchise business?

We have devised two models for SOCE franchise, and the franchise may opt for either of the two after a detailed discussion with us. These are:

  1. Franchisee Owned Franchise Operated: The franchisee will be responsible for establishing the franchise as per Shalby defined criteria and franchisee shall run the operations according to Shalby protocols.
  • Franchisee Owned Shalby Operated: The franchisee will be responsible for establishing the franchise as per Shalby defined criteria and Shalby will run and manage the centre on a revenue sharing model.

Who can be a franchisee of SOCE?

SOCE is an excellent opportunity for

  • Doctors seeking entrepreneurial opportunities
  • New age orthopedic surgeons aiming for growth by offering all the orthopedic services that a large multispecialty hospital does through a dedicated orthopedic centre
  • Businessmen looking for opportunity in the fast-growing and recession-proof healthcare sector
  • Nursing home and Hospital owners
  • Real estate developers and investors with knowledge of or interest in healthcare business

What is the kind of investment the franchisee will need to make?

SOCEs will be small 25 to 40 bedded  specialty orthopedic hospitals. Whilst the cost for setting up a large 100 bedded hospital is about 1 crore per bed excluding land and development cost, the cost for setting up a smaller orthopedic hospital  is about 25 lakh per bed excluding the land and building cost. Thus, compared to multispecialty, this will be much more economical model from initial investment point of view as well as ROI.

Why do you think this is a good business opportunity?

We all know that with growing economy and higher per capita income, healthcare is one of the fastest growing sectors today. People might cut expenses on various other things but not on their health, thus it is a recession-proof industry. As I said before, people travel to our hospitals from all across the country for joint replacement and other complex orthopedic issues. At our flagship hospital in Ahmedabad we get people from distant states like West Bengal, Assam, Chhatisgarh, Jharkhand as well as from nearer states like Rajasthan, Maharashtra etc. Thus, a market is already there for quality orthopedic services in almost all states which an SOCE franchise will be able to tap. 

How will Shalby support the SOCE franchisee?

We are looking at SOCE franchise not just as an investor but as a business partner through franchise model. Shalby will guide the franchise through the whole process of setting up the hospital, purchasing equipment, recruiting key doctors and senior management staff etc. Besides, Shalby team will assist the franchise in day to day operations as well as offer constant guidance and support.

For more information on SOCE and for franchise enquiry contact:

Mr. Susanta Tripathy

DGM – Franchise Business, Shalby Hospitals