The second day of the World Franchise Forum business programme ended with a large-scale ‘Development of Franchising in Russia. Faces of Franchising’ panel session, which brought together some of the largest players in the Russian market. Discussion participants identified difficulties facing franchising in Russia and ways to resolve the difficulties.
President and CEO of Rosinter Restaurants Holding Sergey Zaytsev brought up two key problems common to franchising or indeed most any other type of business: financial and human resources. He noted that while the critical first problem is especially evident during a crisis, but if the business follows a proven model for development, risks are significantly reduced and banks are prepared to meet you half way. “We have created a programme together with Uralsib and plan to finance restaurant openings for our franchisees. If we approve the entrepreneur and conclude a contract, the bank can make their decision about the loan before the legal entity has been established,” Sergey Zaytsev said. The second problem stems from a lack of people with the right skills who can and want to learn. To deal with this, Rosinter Restaurants Holding has transformed its training centre into a corporate university and obtained a license for it. Now people can join the company only through the university.
Chairman of the Board of Directors of INVITRO Alexander Ostrovsky also noted the problems of a lack of education and “excessive expectations”. Moreover, the development of franchising has brought with it a rise in the number of fraudsters and pseudo-franchises, making independent evaluation and expertise so necessary for the market.
In addition to the above mentioned problems Vice President of the Russian Franchising Association Yuri Mikhaylichenko noted the fact that Russian companies seem disinterested in entering the international market. “Foreign markets bring a company exponential growth, foreign exchange earnings and investment in our economy. We need companies to be motivated to expand,” Yuri Mikhailovich said. He also called out the poor use of digital technologies, which have the power to optimizing costs and increase profit.
General Director of the Franchising Academy Mikhail Faynberg said that the industry lacked information content and that we didn’t know what was happening in the regions, what franchises there were, and how they were developing, as well as that the mainstream economy needed more production franchises.
Vice President of Subway Russia Gennady Kochetkov talked about a clause in the preamble of the contract between the company and franchisee. In simple terms, it states that the entrepreneur must temper expectations, roll up his or her sleeves, and get down to work. This clause, according to Gennady Kochetkov, helps protect the company from accusations and sets responsibility for the end result squarely on the efforts of the franchisee.
The World Franchise Forum and Moscow Franchise Expo 2018 is being held under the auspices of Moscow Entrepreneurship Week. The event is being organized by the Russian Franchising Association with the support of the Roscongress Foundation, the Moscow Government, the Ministry of Industry and Trade of the Russian Federation, the Ministry of Economic Development of the Russian Federation, and the Chamber of Commerce and Industry of the Russian Federation.