Pepperfry eyes smaller, franchise stores for omni-channel expansion

Furniture marketplace Pepperfry is looking to ramp up its omni-channel presence with small neighbourhood stores, through a new franchise program.

The 300-400 sq ft stores would be in line with Pepperfry’s offline store network, which is to guide buyers before making a big purchase online. None of its stores actually sell any merchandise, with the company following an offline to online model.

With the Pepperfry Accelerator Program, the company aims to set up over 200 studios or stores in a year’s time. The franchise-owned and franchise-operated (FOFO) Studios will be launched in neighbourhood markets, with more than 5000 residential apartments, in metros and beyond. Pepperfry currently has 32 franchise stores, typically 1200-1500 sq ft each, in 25 cities and 41 company-owned, larger stores that are at least 3000-4000 sq ft in size.

It had launched its earlier franchise scheme Pepperfry Venture Program last year and has added 20 new stores since then.

“We have realized that the size of investments makes a different for franchise owners and have lowered the capex needed from ₹40 lakh in the existing program to ₹15 lakh. This is a low investment, high return program and gives a good opportunity for first-time entrepreneurs both in large and smaller cities,” said Ashish Shah, co-founder and chief operating officer, Pepperfry said in an interview.

The FOFO Studios launched through the Accelerator Program will be based on 100% price parity and does not require the partner to hold product inventory, making it a mutually beneficial business association, the company said.

Pepperfry also offers a revenue structure wherein the franchise owners can benefit by earning a commission of 15% on each online transaction made via the franchise studio.

“Omnichannel has always been an integral part of our growth strategy and our existing franchise program has helped us expand our offline footprint by creating several touch points across major metros and Tier 2 cities. Taking cognizance of the shift from offline to online among consumers during the covid-19 era, we aim to further our network across markets, with this new program, and add many more partners in our growth story by providing them with a strong base to build a profitable business,” added Shah.

Even when regular stores are shut during the covid-led lockdowns, Pepperfry’s franchise stores function through video calls, customer support and consultation.