Kreller | Franchise Due Diligence Case Study: Assessing Risks in India’s Market

Kreller was hired to conduct routine background investigations into a potential master franchise in New Delhi. No red flags were found in media, court records, or local police queries, registration was verified, and licensing agreements with other franchise companies existed. 

The Investigation

Kreller found that the applicant was financially sound and had a solid reputation in the local community. However, our research discovered that the franchise also had a relationship with a concept similar to our client's, which they did not disclose during the interview.

The Result

After reporting Kreller’s findings to the prospect, they told our client they also represented at least two additional concepts that would prevent them from engaging with our client.

The Conclusion

Following the franchise due diligence, further discussions were discontinued due to a conflict of interest.

Summary

India can present several challenges from a due diligence perspective: weak corporate governance, increased security concerns, and specific search requirements to access/verify data. However, it’s an extremely attractive market if approached correctly. By proactively researching a potential engagement, you can develop a meaningful relationship with a qualified partner in an explosive growth market.