Khadi India Franchise

Khadi India Franchise

Khadi India Franchise

Khadi and Village Industries Commission (KVIC) under the Ministry of MSME, Government of India through Khadi and Village Industry’s program is looking for a franchise to stock and sell Khadi and Village Industries products. The franchise comes in the name and style of “Khadi India Outlets”.  In this article, we will look at the procedure for setting up a Khandi India franchise in detail.

Know more about the Khadi and Village Industries Commission

Khadi India – An Outline

Khadi is a handspun, handwoven and skin friendly fabric. The KVIC is a statutory body launched by an Act of Parliament. The KVIC is charged with the promotion, planning, organization, and implementation of programs for the development of the khadi and other village industries in the rural areas. 

Eligible Franchisee

Following persons are eligible to apply for Khadi India Outlets:

Franchisee Profile

  • The entrepreneur should be Income Tax payee for the last three years and must be financially sound.
  • The preference will be provided to those having their own air-conditioned showroom or rented showroom. 
  • The applicant is having experience in marketing of apparels, ready-made garments or dress material most preferable.

Note: Having showroom of a minimum size of 1000 square feet at a prominent place will be an added advantage.

Agreement and Term Details

For officially nominate the applicant as a Franchisee for Khadi India Outlets, a contract agreement will be signed by  Khadi and Village Industries Commission. After receiving this agreement order, the new entrepreneur can commence selling the Khadi and Village Industries Products. This agreement will be for a valid for five years.

Applicable Fee

Franchise application with a non-refundable tender fee of Rs.5900 ( Rs.5,000 fee + Rs.900- GST) should be submitted to Directorate of Marketing, KVIC, Mumbai. The Tender or application Fees can be paid in the form of cheque or DD, or the applicant can make payment via net banking.

  • The cheque/DD should be in the name of Director ( Marketing),  KVIC, payable at Mumbai.
  • For Online Banking – In case you are making the payment through NEFT  use the following  details:
    • Make payment in favour of ” DIRECTORATE OF MARKETING, KVIC.” 
    • Account number: SB A/C no.10176548655 
    • Bank Details: State Bank of India, Vile Parle (West), Mumbai 400056 
    • Other Details: CIF Number: 80138251736
    • IFSC Code SBIN0000515
    • MICR Code 400002083

Prescribed Authority

The Director (Marketing) of Khadi and Village Industries Commission (KVIC) will be the coordinator and nodal and administrative authority.

Security Deposit Details

The Khadi India Outlet franchisee within seven days of signing the agreement will have to furnish a security deposit of Rs.10 lakh with the franchisor. 

  • The Security Deposit is towards the security of stocks to be provided by the Franchisor and stocks of such products will be provided to the Franchisee to the extent of 80% of the Security Deposit only.
  • The security of stocks will be secured by way of Security Deposit at all times during the Validity period by the Franchisee, i.e. stocks will be issued only against security Deposit.
  • This Security Deposit will be refunded by the Franchisor to Franchisee without any interest on the expiry of the Validity period. 

Note: In case the Franchisee decides to terminate the agreement before the expiry of the Validity Period, he/she shall ensure that the inventory and other statutory provision related to the consignment of the Franchisor are settled.

Royalty

The Franchisor will decide the MRP as per policy guidelines of Directorate of Marketing.

Sales Target Details

The sales target will vary according to the Geographical area or locality and will be decided by the franchisor however the minimum average sales target of Rs.15 crore per annum has to achieved by the Franchisee for which there will be a moratorium period of 12 months from the day of operation.

Agency Commission

The Khadi India Outlet Franchisee may be entitled to trade commission on the products/any particular product as decided by the Khadi and Village Industries Commission. The franchisee will not be entitled to any rebate on Khadi products.

Transport

The franchisee will have to arrange their own transport to carry the goods from Franchisor to the Khadi India Outlet showroom.

Insurance Details

The franchisee will preferably ensure all furniture and civil works at its own cost and expenses. 

Placement of Order

  • The franchisee will have to furnish his indent to the KVIC franchisor for the products in advance to enable the franchisor to procure the products as per the demand.
  • If the Franchisee seeks credit facilities against the indents, then the value of the indent has to be liquidated by the Franchisee within a period of 30 days, railing which the Franchisor will have the right to recover the amount from the Security Deposit.

Conditions for Khandi India Outlet

Khadi India Logo

KVI Franchise counters or Khandi India Outlet will have the uniform design and pattern of signage approved by KVIC, and the outlet will have to display the Khadi India logo outside and inside the showroom.

Note: The Franchisee will have to carry out this work and maintain the same at their own cost

Khadi India Outlet
Khadi India Outlet

Price of the products

As per the market condition, the franchisor and franchisee will decide the price of the products. Accordingly, the franchise will have to store the products in the showroom.

Procurement plan

  • The Khandi India Outlet franchisees are requested to provide the procurement plan every month in the preceding month, quarterly basis in last month of the previous quarter and annual basis in January of the previous financial year to the Franchisor.
  • The franchisor will fix sale targets, monthly, quarterly, and annually through mutual discussion with the franchise.

Staff Appointment

The Franchisee needs to appoint the duly trained staff to sell the products in Khadi India Outlet at their own cost. The Franchisee will bear and pay all expenses for maintaining the Khadi India Outlet showroom for selling off the products.

Request for Replacement of Stocks

  • The Khadi India Outlet franchisee can request of slow-moving stocks with other products; such request have to be sent within two months from the date of purchase of the products.
  • The exchange or replacement should not exceed 10% of the value of the total annual turnover of the approved showroom.

Pay Taxes on Time

  • The franchisee will be solely responsible for complying with the provision of various laws including laws relating to Shops and Establishment Tax, Sales Tax, Commercial tax and all other applicable taxes.
  • The franchisee will also be responsible for ensuring timely filing of necessary returns and payment of taxes on sales.

In case, if you require any assistance for Tax Filing, get in touch with IndiaFilings.com.

Other Conditions

  • The franchisee has to sell the products at the prescribed rate provided by the franchisor. Any discount offered by franchisor to franchisee has to be invariably implemented passed on to customers by a franchisee.
  • The franchisee has to maintain the proper account in respect to inventory, payments, sale, etc. and need to provide when required by the franchisor.
  • The franchisee will not be entitled to claim any rebate on the sale of Khadi Products.
  • The franchisee has to keep the Khadi retail outlet open on all days except on the Government holidays notified in the official Gazette.

Enrolment Details

If an entrepreneur wishes to Join Hands to Excel in Khadi Business and cash upon the vast opportunities of the ever-growing natural fibres business, send an application form to Director (Marketing), Khadi and Village Industries Commission.

The application is to be sent to the Director ( Marketing), Khadi & V.I.Commission, 3, Irla Road, Vile Parle ( West), Mumbai-400056.

The application form for the Khadi India Outlet is enclosed here:

MKT_Franchise (1)-2-3_compressed (1)

Once your application for the franchise is selected, you will be called for a Discussion about the business plan with a KVIC. After the discussion, you will be provided with a contract agreement document. If there are no significant issues, it is easily possible to commence operations within a time frame the date of the agreement.

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Post by Renu Suresh

Renu is experience content writer specialised in compliances and company rules.