Hyderabad-based pharmacy retail chain MedPlus, which entered the Gujarat market with eleven stores on Tuesday, plans to take the franchise route to expand its outlets to touch 10,000 by FY19. The company had been following a company-owned-company-operated (CO-CO) format so far and operates 1,230 stores across twelve states in the country at the moment.
Madhukar Gangadi, Founder & CEO, MedPlus Group said, "As we enter the Gujarat market, it also marks a shift in our strategy to take the franchise route for faster expansion. In eight years we have opened around 1,230 outlets, and now plan to take that count to 10,000 over the next few years." Gangadi added that the overall investment outlined for the expansion would be around Rs 3,000 crore. This would come from the franchisees and the company has tied up with various banks to provide working capital loan to the franchisee owners if they require.
He added that so far the company has invested close to Rs 300 crore as a mix of debt and equity and employs around 9,000 people.
The average sales per outlet is Rs 1.2 crore per store per year. As of now less than five per cent stores operate on a franchise model. "We have established our brand over these years and now it takes a store to break even in around three months. Hence, going forward, for expansion in North India we would take the franchise route," Gangadi said.
MedPlus plans to take the outlet count in Gujarat to 500 over the next couple of years, and by this year-end the number would touch 200 outlets across the state. Gangadi adds, “Given the fact that, Gujarat is the global pharmaceutical huband a vibrant consumer market for healthcare services, we expect it to be one of our most dynamic target markets.”
Headquartered in Hyderabad, the brand serves more than 200,000 customers daily and enjoys a 30% market share in organized retail Pharma industry. The company also owns MedPlus Pathlabs (a chain of quality diagnostic centres), RiteCure (a distributor of medical and surgical supplies), and medplusmart.com (an online medical store).