What is the cost of Belarusian companies` franchise?
To get a Belarusian franchise is more preferable than a foreign one.
Olga Leonteva, Chairman of The Association of franchisors and franchisees «Belfranchising» says the names of Belarusian companies, that sell franchises on the domestic market and about the cost of entering business on senior care franchise or any other kind.
Business on franchise allows to reduce risks. International and Belarusian practice shows that only 2 from 10 start-ups are closed for the first five years.
If to compare with the foreign ones, Belarussian franchises are not so expansive. During the crisis it could be the advantage for working with them.
Who buys franchises.
There are two types of buyers. They have their own goals.
One of them wants to do business on the basis of a well-known brand, that is spread by franchise. This variant is assumed to have severe conditions from the company-owner`s side:
1. High entry price for the brand use. McDonald’s, for example, asks $300,000 as a prepay.
2. Sometimes a franchise` s owner requires to work in a placement with a definite geographical location and a determined square.
3. The working experience of the buyer in the required business segment is 2-3 years.
The second type of buyers gets franchise to obtain experience and knowledge in doing this business.
The difference of Belarusian franchises from the foreign ones.
According to the «Belfranchising» data more than 30 Belarussian companies propose to purchase their franchise. To work with them on the domestic market could be more preferable than with the foreign franchise owners because:
• brand is well-known in the country(-ies), where the franchise`s seller is going to work
• franchise`s seller and buyer are working on the same legislative, marketable, social and cultural conditions.
• as a rule, franchise`s buyer has an opportunity to save on account of the resources of a chain – a brand`s owner puts money to marketing and looks for providers.
• to sign a contract with a Belarussian franchisor is more simple due to its close geographical location.
• sometimes personnel training is conducted be means of the franchisor-selling company
Not all Russian, European and American brands are famous in Belarus. So their name is not a guarantee for getting a success.
The cost of the Belarusian franchise.
If an entrepreneur isn`t interested in purchasing a well-known brand like «Baskin Robbins», for example, he wants to start ice-cream business, in my view, Belarussian franchises are more preferable. They have lower entry price.
The main indicator of the franchise`s effectiveness is a return of investment.
When choosing a business partner a conscientious owner gives a detailed economic model counting required investment and probable yield. This data is based on sales` statistics of his own enterprises.
Very often buyers are looking variants without additional payments – royalties. But just royalty gives interest to a brand`s owner in a future partner`s success.
It goes without saying, it is very important to count all the volume of investment, when starting a business. Among the most capacious segments we could call retail networks and feeding.
Popular Belarussian franchises.
|Franchise||Field||Lump-sum payment||Royalty||Payback period|
|Pizza Smile||Restaurant||$15,000||4,5% of the month sales` volume||From 1,5 year|
|GoodBurger||Fast food||No||3,5% of the month sales` volume||One year|
|Vero Gusto||Coffee Shop||$3,000||No||From one year|
|Oranjet||Tourist agency||$3,500||$250-270, depending on the working year||No data|
|Kazhan||Leather products||No||No||2-5 months|
According to «Belfranchising» data
Local franchises are becoming more and more popular in Belarus business. It is confirmed by statistics:
• 6 contracts on domestic franchises` purchasing were concluded in 2013( 5 of them were sold to the residents)
• 30 sales took place in 2014.
Photo from pakataskin.by, is provided by «Belfranchisng», text from probusiness.by
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