Office 1 gets a master franchisee

Indo Rama will pay the US major a lumpsum and a percentage royalty based on sales.

NEW DELHI: Even as US-based office-product retailers like Staples, Office Depot and Office Max are awaiting a clear-cut policy on foreign direct investment (FDI) in India before setting shop here, Office 1 Superstore International has taken the plunge. Office 1 Superstore, which claims to be a dominant office-products’ player in most of the markets it operates in, has used the master franchisee route for entering the burgeoning Indian market.

It has appointed Indo Rama Retail Holding, the retail arm of the Indo Rama group, the master franchisee for India and other SAARC nations. And the arrangement works like this: while Indo Rama will pay the US major a lumpsum and a percentage royalty based on sales, Office 1 will provide technical expertise. In the process, Indo Rama will invest up to Rs 30 crore in establishing company-owned and franchisee Office 1 Superstores across the country over the next two years.

Indo Rama Retail is talking to other interested retailers wanting to enter the Indian market. Indo Rama Retail Holding is a company promoted by the Lohia family. It has been scouting for retail opportunities for more than three years now.

In 2003, it decided to enter the food retailing segment but this plan was abandoned due to “infrastructural and other issues”, according to executive director Vishal Lohia. Maybe Indo Rama Retail Holding may be second time lucky.  Meanwhile, first two Office 1 Superstores have already come up in Delhi.