Franchising in Europe

Franchise Power Profile: PAPA MURPHY’S

admin — Mon, 23 Nov 2009 15:33:12 +0000

Franchisees of Papa Murphy’s Take ‘N’ Bake Pizza can certainly be counted among the brand’s fans. The franchisor was recently rewarded with extremely high satisfaction ratings in a survey conducted by Franchise Business Review. The national franchise market research firm recently announced that Papa Murphy’s scored as one of the top food franchises for 2009 based on overall franchise owner satisfaction. Papa Murphy’s is one of only 11 food companies out of nearly 100 major brands that can make this claim.

“Franchisee satisfaction and performance is one of the most critical pieces of information for any prospective franchise investor to consider,” states Eric Stites, President of Franchise Business Review. “We have surveyed thousands of franchisees from the food industry and the Papa Murphy’s franchise system has some of the highest owner satisfaction in their segment.”

The survey asked franchise owners 20 questions related to their franchise ownership experience, from franchisee training and support to system quality issues, franchisor relationship, financial opportunity and overall satisfaction. In all five categories, Papa Murphy’s outscored the average of all other food industry participants.

“No consumer-voted award or business-press honor measures up to a franchise owner giving you high marks,” said John Barr, chairman and CEO of Papa Murphy’s. “The path to our success depends on the satisfaction of our franchisees. This achievement reflects the overall organization’s continuing efforts to better serve our customers, our franchisees, in order to insure their success.”

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Three Strong Advantages of the Franchising Model

admin — Tue, 17 Nov 2009 15:51:35 +0000

Have you been pondering whether franchising is a good fit for you? If you’re similar to most entrepreneurs, you’re not quite sure if your involvement with a franchise is worth the cost. While answering the question of whether or not you choose a franchise over developing and building your own concept is your decision, it’s definitely imperative for you to fully weigh the pros and cons before you decide which way is best for you.

It is true that there are fees associated with the initial startup of a franchise, but that fact by itself shouldn’t dissuade you from deciding to venture this direction. After all, there are expenses related to the startup of any type of business. You need to ask yourself what you are getting in terms of business support and marketing advantages when you choose to buy in to a franchise.

Three ‘Pros’ for Franchising

1. You Gain a Healthy Head Start with Brand Name Recognition
If you choose to start your business from the bare ground, you’re at a disadvantage in terms of name recognition from the beginning because no one will ever have heard of your brand before. While you can surely raise awareness for your company’s namesake, it takes time, energy, and money. When you open a new locale of a known franchise, you’re already ahead in the race when it comes to name recognition. A major bonus associated with franchise ownership is the simple fact that prospective and existing customers are already likely to know about your brand names and company before you even open up for business.

2. Solid Support Channels from Corporate
Being an entrepreneur can turn out rather lonely. When you’re launching a small business by yourself– or even with a few partners – you end up on your own when it comes to deciding what to do first, next, and so on. In franchising however, although you’re an independent small business owner, you have teams of people in place at the corporate offices with a duty to assist you, as well as other franchise owners in other markets. They have experience with the same issues you’re facing and can offer ideas, help, and advice. So, even though you have the autonomy of entrepreneurship, when you own a franchise you aren’t really all by yourself.

3. Smart Preparations Can Lead to Quick Success
There are a handful of ways through which opening a franchise can build a platform for success in your favor. First, the business has already experienced success elsewhere, or it wouldn’t be a franchise at this point. You already know that the concept is viable when you choose to open a franchise, because it’s already operating in another locale. The system works; it’ll be your choice whether or not it’s a workable business for your market and to make it succeed. Further, overall, franchise start-ups have a much higher success rate than other small businesses. Trust what works, what has always worked and those whose success depends on yours.

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Back to Basics: How to Buy A Franchise

admin — Tue, 10 Nov 2009 22:27:18 +0000

1. Examine their infrastructure
Whether it’s fitness or fast food, the key to any successful franchise organization is having the proper infrastructure in place to support its franchisees. No matter how hot the concept may be, investing in a franchise that isn’t set up to provide franchisees with the support for long-term success is the wrong way to go.

With Snap Fitness, for example, growth was realized in a short amount time. They recognized that they needed to expand their infrastructure in order to support the new franchisees, while still providing the same level attention for existing owners. Today, they’ve grown the corporate staff to include a complete in-house marketing department with a dedicated creative design team to create unique, year-round marketing campaigns; a team of franchise account representatives assigned to designated franchise owners to provide operational and sales support; on-site regional personal training and sales training courses and much more.

This is crucial when selecting the right franchise for you, as there are plenty of companies that can sell a concept. But a truly successful company won’t just sell a concept; they’ll sell a sustainable, long-term business model.

2. Identifying trends vs. fads
These days, it seems that everyone is always looking for the next “big idea” to take their business to the next level. As an entrepreneur and potential franchise owner, I encourage you to keep an eye on what’s happening in the market place and to explore opportunities that you feel excited and passionate about investing your time and money in to.

However, I urge you to do your due diligence and evaluate the concept before getting too deeply involved. Ask for statistics regarding market growth over the past several years, not just for that specific business but for their industry as a whole.

The hospitality franchise, whether it be hotel or restaurant, is a concept that has grown by leaps and bounds over the past several years, attracting a plethora of new players in the market.

Look for concepts that demonstrate positive growth trends, as opposed to being sold on the “flavor of the month.”

3. Find a concept that motivates you
Above all else, the key to being a successful small business owner is to have a passion for your business and to be motivated to get up and go to work in the morning.

The first rule of building a successful business reads like this: If you don’t believe in your product, neither will your customer.

Think about it like this; if you have a passion for health and wellness, why would you want to open a fast food franchise? Your business is a reflection on you, so make sure that you selling a product or a service that you truly believe in.

At the end of the day, franchising is a great way to achieve freedom, fulfillment and flexibility. Just remember to do your homework first!

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The State of the Current Domestic Franchising Market

admin — Thu, 05 Nov 2009 18:41:51 +0000

Grow Your
Franchise Abroad Without Debt & Why You Should Act Now

SBA Report:
October 30, 2009

The recession has hit franchise owners particularly hard, with the Small
Business Administration (SBA) reporting record loan default rates for 2008-2009.
According to the SBA, individuals who took on SBA loans to finance a franchise
had a 43% higher failure rate than in 2007.

In total, those franchise losses cost the SBA $93.3 million last year -
nearly 170% higher than the year before.

Since 2004, franchise loan defaults have increased by nearly 10% (from 3.1% to
13.4%), highlighting that franchise owners have had an increasingly difficult
time making a successful go of their new ventures.

As international franchising consultants, we at IFG approach this issue with a
“Learn from the mistakes of others” point of view. While it is undoubtedly
disturbing to see these statistics; and while it may seem that these numbers
indicate franchising to be a risky endeavor, it is imperative to remember a few
key factors:

These franchises represent a minority in the worldwide market
These concepts created debt at the outset, starting out in the red
We can learn a valuable lesson from their failures without risk to ourselves
Franchising as a business model is superbly secure and expansion-friendly

Our focus is solely international in scope, meaning franchise expansions in
which we are involved do not rely on any sort of lending, credit or debt.
It is simply not a viable or economical practice for the international
franchising markets we serve.

Because international franchise expansion abroad does not involve debt or
outside lending practices, we enjoy the peace of mind that some of the
following list of franchises might not.

These brands had the highest SBA loan failure rates in the United States in
2008.

1. Noble Roman's Pizza

Billing itself as "The Better Pizza People," this Indianapolis-based
franchiser has had a tough time selling that proposition to customers. While
the company reported a 30% net income increase in Q1 of 2009, Q2 total
revenues were down
more than $500,000 from the comparable period in 2008. Maybe that's why 53%
of all owners with SBA loans defaulted in 2008.

2. PJ's Coffee and Tea Café

PJ's Coffee and Tea Café started out as a small business in New Orleans 30
years ago and only recently began selling franchise rights across the south,
southeast and southwest. It might want to stick to Cajun country - 50% of
the franchisees failed on their SBA loans last year.

3.
Super Suppers

At the height of the market, working families expanded their spending to
include luxuries such as cleaning services, lawn services and even
assemble-your-own dinner services.

Super Suppers jumped on the concept and its franchise growth was exponential
between 2005 (40)to 2006 (152), and 2007 (206). However, the growth stalled
with no new franchise owners coming on board in 2008, and existing owners
with SBA loans began failing at a quick pace - 42%, to be exact, in 2008.

4. Figaro's Italian Pizza

Figaro's has been in business for 28 years, but most of its franchise owners
aren't likely to reach that same anniversary. One-third defaulted on their
loans, unable to grab enough of the industry's $32 billion in annual revenues.

5. New York NY Fresh Deli

Perhaps it was the low single-site franchise fee ($17,500) that attracted new
business owners, but it was low revenues that led to closed doors. Thirty-one
per cent defaulted on SBA loans in '08

6. Amazon Cafe

This franchiser offers smoothies, wraps, salads, soups, juices and more, but
apparently not enough more to keep all operators in business. Thirty per cent
failed in 2008, and more than 52% have defaulted on their SBA loans since 2000.

7. Simple Simon's Pizza

Simple Simon's grew from one store in Tulsa to a network of 220 restaurants
nationwide since 1982. However, nearly 30% of store owners who took on an SBA
loan to finance the start-up have defaulted. Perhaps selling pizza isn't quite
so simple after all.

8. Snip-Its

The Snip-Its children's hair salons ranked 30th on the Franchise Times' 2007
list of 55 fastest growing franchises, but two years later that growth has
stalled. Thirty per cent of store owners with SBA financing failed to repay
their loans in 2008.

9. U Build It

Seeking to grab a share of the market that made Lowe's and Home Depot household
names the U Build It franchise offers owners an opportunity to serve as
"construction consultants" for DIYers interested in building or renovating their
own homes. But when the housing market collapsed, it shouldn't come as a shock
that 27% of their franchisees reneged on their SBA loans.

10. Bellacino's Pizza

If you're a Facebook user, you can become a Bellacino's Pizza "fan."
Unfortunately 26% of Bellacino's owners that took on SBA financing couldn't get
enough regular fans to stay current on their debt payments. That number closes
in on 30% dating back to 2000.

11. Blockbuster Video

While Blockbuster was able to fend off brick and mortar competitors, it has
struggled to maintain market share since Netflix and Redbox changed the rules of
the game. In 2008, one in four store owners with SBA loans failed to repay their
debt; that number jumps to a sobering 38% since 2000.

12. Pizza Factory

If this list proves anything, it should be that entrepreneurs might do well to
avoid pizza franchises. Twenty-four per cent of Pizza Factory owners took a pass
on repaying their SBA loans in 2008, and that number jumps to 43% if you look
back to 2000.

13. Pro Golf

With a rising unemployment rate, workers aren't knocking off early to hit
the links.

Perhaps that's what led to 24% of Pro Golf franchise owners defaulting on
their SBA loans. But the fact that 64% of all owners have failed to repay
their loans since 2000 makes you think that perhaps the business model is
the real news, not the recession.

14. Conoco Service Station

While ConocoPhillips Company is a Fortune 500 company, its service center
franchise owners (more than 3,100 operate under the Conoco, Phillips 66 and
Union 76 brands) are struggling. More than one in five (22%) have defaulted on
their SBA financing commitment.

15. Keva Juice

Keva's product isn't a "blendsation" everywhere. Twenty-two percent of these
smoothie store owners didn't raise enough revenue to repay their SBA loans last
year; more than one in four (26%) have defaulted on their loans since 2000.

There you have it. So what is the moral
of this story? Most foreign master franchisees do not use debt AT ALL. Glean a
lesson from the experiences of other entrepreneurs and pursue expansion avenues
abroad while the domestic U.S. market recovers.

Good business practices have good
reasons behind them. Likewise for the bad ones.

To learn more about franchising
internationally and avoiding the costly repercussions of debt,
click here.

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Italian Investor ‘Beefs Up’ the Food Industry in Russia

admin — Thu, 22 Oct 2009 19:05:43 +0000

Feature Story:
Cremonini Group Eyes Big Profits While Boosting Russian Franchise Market

How One Italian Investor is
'Beefing Up' The Russian Food Franchise Industry

<< Luigi Cremonini

The Big Mac that
you pick up at a local McDonald’s restaurant might soon contain meat from an
Orenburg cow processed by an Italian plant in the Moscow region.

It’s all part of Italian businessman Luigi Cremonini’s strategy
to tap into Russia’s “huge potential” by making “huge investments.”

Italy’s Cremonini Group will open a new meat-processing plant in
the Moscow region to produce hamburgers for McDonald’s by year-end as it moves
to build a full production chain in Russia, Cremonini told The Moscow Times.

The founder of the Italian giant, one of the largest food
companies in Europe, is not at all dismayed that the plant will cost twice as
much as expected or that Russia’s cattle population is steadily declining.

“We strongly believe in the prospects of doing business in
Russia, and this is why we decided to make a strong direct investment, 100
million euros [$148 million], to build the meat-processing plant in Odintsovo,”
he said in an interview Wednesday.

“We are already a supplier of beef for McDonald’s restaurants
across Europe and will now make hamburgers for the Russian branch of the
international fast-food chain,” he said.

The Odintsovo plant, which will occupy 25,000 square meters,
will initially produce 25,000 tons of meat products per year and increase in
capacity to 50,000 tons in a few years, he said. Work on the plant started in
2007.

The plant will be operated by Cremonini’s local subsidiary,
Marrusia.

McDonald’s,
which is rapidly expanding worldwide and plans to open 30 new restaurants in
Russia this year, has processed its own food needs but said it needed Cremonini
to keep up with growing demand.

“Due to an extensive McDonald’s expansion in Russia, the
decision was made to outsource the production facilities of ZAO
Moscow-McDonald’s Food Processing Complex,” McDonald’s said in an e-mailed
statement Thursday.

“Marrusia … will ensure production, storage and delivery of meat
products for McDonald’s restaurants,” it said. “Supplies are planned to begin
with the opening of the partner’s facility.”

The plant will provide 10,000 tons of meat to McDonald’s next
year.

Cremonini said he saw the plant as a strategic investment and
was cautious in predicting when it might break even.

“In normal conditions, you would expect to justify your expenses
for a project like this in 10 years, but Russia is a country where it is kind of
difficult to make this kind of precise calculation,” he said.

Cremonini stressed, however, that only major investments work in
Russia and said his company has invested more here than in any other country
outside Italy.

“This is a country with great perspectives, so the logic behind
this is simple: huge potential, huge investments,” he said. “At the beginning,
we of course made a business plan outlining a lot of unpredictable factors, so
we are quite aware of what we got ourselves into.”

Cremonini Group was founded by Cremonini in 1963 and entered the
Soviet market in 1985, supplying meat to the state-owned trade concern
Prodintorg. The company started to target Russian consumers in the late 1980s
and set up Marrusia in 1998. In 2008, the company reported turnover of 133
million euros in Russia, up 5 percent from the previous year. The group’s total
consolidated revenues were 2.2 billion euros, an increase of 6.6 percent.

The new Odintsovo plant will become the final stage of a
full-cycle production chain that the company intends to build over the next few
years, starting with several small slaughterhouses in the Orenburg region.

“Our strong conviction is that if you want to succeed in this
country, you have to produce and to process here. You cannot consider Russia
just as an export market,” Cremonini said.

The businessman would not disclose exact investment figures for
the Orenburg region, saying only that the amount would not be as big as in
Odintsovo.

“Judging by the experience of our Odintsovo project, we prefer
not to disclose figures,” he said. “Initially we planned to invest 45 million to
50 million euros in the Odintsovo project, but the final cost doubled.”

The major challenge during the construction of the plant in
Odintsovo was meeting all official rules and regulations, he said.

“It was an incredible adventure to both meet the timing of the
construction and respect all the formalities,” he said. “In Europe, we sometimes
think that we have the highest construction, hygienic and other standards, but
this is not true. In Russia you have to multiply everything by two.”

The reason the company plans to build several small
slaughterhouses instead of one big enterprise is the relatively low density of
the cattle population in Russia.

“In Italy, we have two big slaughterhouses that each process
1,000 cattle per day,” Cremonini said. “In Russia, it’s better to have
several smaller plants in different areas of the country where the cattle
population is concentrated.”

He said his company’s principle was to build slaughterhouses no
farther than 500 kilometers from cattle farms in the interest of the humane
treatment of live cattle during shipping. He said he had calculated all the
possible risks of shipping meat from Orenburg to the Moscow region.

“If the trucks can cover the distance from the slaughterhouse to
the plant in two days, there is no problem for us,” he said.

The distance between Orenburg and Moscow is roughly 1,500
kilometers.

Cremonini would not speculate about the possible costs of
highway bribery, a common phenomenon in Russia that poses a serious obstacle for
quick transportation and increases costs.

“Regarding highway bribery, we have never faced this kind of
problem,” he said. “Anyway, if there are some difficulties in this country, they
are absolutely the same in all the other countries of the world.”

During the last decade, meat production has dropped by 55
percent, according to statistics from the Agriculture Ministry. But Cremonini
said “meat” was too general a term, and pork and poultry should be separated
from beef, which requires a more complicated production process.

“Poultry and pork production is now doing pretty well, while
beef production is decreasing,” he said. “In order to organize pork and poultry
production, all you basically need is cereal to transfer fodder into animal
protein — and Russia is rich with cereals — while beef production is more
complicated.”

In January, there were 20.7 million head of cattle in Russia,
down 2 percent from the same month in 2008, according to the State Statistics
Service.

In order to efficiently produce cattle and beef, you have to
“produce” cattle farmers, Cremonini said.

“And this is the problem in Russia — you need people to produce
cattle, and finding such people and stimulating them to grow cattle takes a very
long time,” he said.

“This industry has been destroyed in the last 20 years,” he
said. “It is a very slow and long-term process to rebuild the cattle
population.”

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Vladimir Putin Extends Warm Welcome to Foreign Investors

admin — Thu, 15 Oct 2009 15:42:19 +0000

RUSSIA’S VLADIMIR PUTIN EXTENDS WARM WELCOME TO FOREIGN INVESTORS

Understanding The Invitation From Putin and Why You Should Respond

Russia’s prime minister, Vladimir V. Putin, whose government took control of several oil companies when he served as president, gave a speech Tuesday saying the state must now step back from the economy and let private enterprise take the lead in pulling Russia out of recession.

The speech, at a banking forum in Moscow on September 30, 2009, echoed recent assurances by his ministers and economic advisors that Russia is becoming more attentive to the concerns of investors. Mr. Putin also reiterated their suggestions that a new round of privatizations could be in the cards for Russia, The New York Times’s Andrew E. Kramer writes from Moscow.

The speech on economic policy was noteworthy for its exceptionally warm endorsement of a role for private investors. That had not been the case in recent years.

“We understand how deceptive blind faith in an omnipotent state is, how illusory are the hopes that total intervention in economic life might fix everything and put everything in its place,” Mr. Putin said.

He went on to praise private enterprise. “To the extent that the situation stabilizes, that the effects of the crisis are overcome, we plan to consistently and purposefully reduce state intervention in the economy,” he said, adding that a new round of privatizations could follow.

The government already has been extending an olive branch to the petroleum industry, offering new investments and a greater role in a sector at a meeting with oil company executives last week.

Mr. Putin noted that, while the government inevitably took stakes in Russian companies during the crisis, it did not use the downturn to impose greater controls and did not restrict the free conversion of the ruble.

“We will continue the line of encouraging private initiative, integration into the global economy and the creation of a favorable investment climate,” he said.

In his first term as president, from 2000 until 2004, Mr. Putin had introduced a number of pro-business reforms such as a flat tax and a streamlined system for registering small enterprises, but followed this in his second term with a sweeping extension of state control over the natural resources companies during the boom.

On Tuesday, Mr. Putin took a different line. Russia may eventually liberalize even the trade in natural gas, though a monopoly would remain with Gazprom for exports for at least the medium term, he said.

During the oil boom, export revenues exploded and foreign investors rushed to pile on to the economic expansion. If anything, the government struggled with the problem of too much money, sparking inflation and making local products uncompetitive with imported goods.

That reversed last autumn, and Russia is now again in a position of having to compete for limited investor money with other emerging economies.

“Now, with capital around the world much more scarce, there’s a recognition that Russia does have to play the game,” Rory MacFarquhar, an economist at Goldman Sachs’ office in Moscow, told The Times in a telephone interview. “It does have to make overtures to foreign investors and it cannot take them for granted.”

In one sign of some stabilization in the Russian economy, the Central Bank on Tuesday lowered its refinancing rate for the second time in two weeks, indicating it is less worried now about a run on the ruble and can instead focus on trying to stimulate lending to businesses.

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The Repercussions of the Financial Crisis and Some Effects on the Current Trends of Franchising in Areas of Eastern Europe…

admin — Tue, 22 Sep 2009 16:51:08 +0000

A rather difficult economic situation in most countries of the world has affected all aspects of business including the franchising industry. Therefore, it is time to study the ongoing changes in the economy and, particularly, in franchising in Russia.

Most sectors of the Russian economy has seen a significant business slowdown caused by an abrupt drop in demand for almost all kinds of goods and services, by a reduced scope of financing opportunities and available loans and, as a result, by numerous payment failures. All spheres of business, including franchising businesses, have to react to it in different ways.

The first and most wide-spread reaction to economic difficulties is to cut down on expenses and to start to economize on everything. At present it is vividly illustrated by mass lay-offs and payroll reductions. In the retail industry it can also be seen in the reducing number (or complete abolition) of free services, e.g. free plastic bags in supermarkets. The ultimate stage of this kind of measures is a partially or completely frozen business. It happens either in the form of shorter working hours or of an indefinite period of total inactivity. From the buyers’ point of view, to cut down on expenses and to save on everything one can save on means fewer purchases and less expensive counterparts of usual goods. At the same time certain companies – with a few franchising concepts among them – have managed to take advantage of the economic crunch. For instance, many QSR’s have increased their sales volume due to the fact that new clients have turned to fast food restaurants from higher priced cafes.

The second type of reaction reflects changes in corporate policies that aim at stimulating the demand. This kind of measures includes various discounts and promotion activities. Franchising stores are lavishly decorated with bright posters announcing unbelievable discounts – sometimes 50% or even 70%. It is mostly seen in the garment and footwear retail chains. The second type of reaction to the economic hardships also covers certain attempts to help buyers with financing a purchase. For example, one of the largest Russian car factories – Gaz – offers its buyers to pay a portion of the interest rate in case a bank loan is involved in the purchase of a car. The regional government of Nizhniy Novgorod (where the factory is situated) also tries to incite people to buy Gaz cars. The official offer is 50,000 rubles (about 1,640 USD) to everyone who decides to exchange their old car to a new one from the Gaz plant.

Most far-sighted entrepreneurs and top managers choose the third type of reaction – to critically study the range of their goods and/or services in order to change it in accordance with the current situation. The same car factory – Gaz, for instance, has announced a soon to appear new variation of their popular model with a much cheaper engine. Retailers and wholesale companies have also started to offer “anticrisis” versions of their goods and services.

The forth way to react to the difficulties of the world economy is less widely spread and includes attempts to improve and optimize marketing and sales techniques. However, more and more entrepreneurs turn to analyzing the efficiency of advertizing and opt for cost-effective partisan marketing instead of more conventional means of advertizing.

Franchising concepts in Russia start to change as well against the background of the above mentioned changes in different spheres of business. The general drop in demand for all kinds of goods and services has affected the potential buyers of franchises, i.e. the investors. Some time ago buying a franchise was considered as one of the safest ways of capital investment but now the situation has changed. The profitability of many franchising concepts reduces. Potential investors understand it and show less interest in buying franchises. The number of investors in the retail sector has significantly decreased. Unfortunately, some Russian franchising concepts have already faced forced closings of their franchisees. Although none of the Russian franchisors have shut down so far, there are already a couple of cases of totally frozen businesses.

Speaking about the garment and footwear retail chains it is worth mentioning that the worst situation is seen in the mid-priced segment. Clients can be now divided in two basic groups: those who don’t feel any difference because of the world economic crunch and are used to buying whatever they like constitute the first group and tend to buy expensive goods; and the rest of us who have to be more careful with their spendings fall into the second group and buy predominantly cheap goods. There is less and less demand for mid-priced goods. Thus retail stores of this price segment are forced to shut down. It can easily be seen by a growing number of free spaces in shopping centers. Therefore, the drop in demand also affected the development and introduction to the market of new franchising concepts in Russia, especially in the retail sector.

Nevertheless, potential investors who are willing to invest their money in a new business with the help of a franchising model can still be found in Russia. First of all, they are the people who try to secure their capital against inflation and vague economic perspectives.

The economic crunch revealed the most stable businesses. These are the companies that increased their sales volume instead of reducing all activity. And sometimes it happens not “instead of” the crisis but “thanks to” it! The majority of these businesses fall into the production and service spheres which can be regarded as a positive trend (taking into consideration the fact that there are not so many production franchises either in Russia or in Western countries). Investors are more willing to start a new business in the sphere of production or services than in the retail sector as in the longer term this type of investment is considered more secure. The investors’ interest to the above mentioned spheres is also influenced by the following factors:

1. Many qualified specialists have been laid off in these spheres and are now eager to work, even for a lesser salary.
2. A growing amount of unoccupied commercial real estate gives a chance to find an appropriate property with a lesser rent.
3. Buying a franchise helps to start a new business in a short period of time and thus to diversify the existing business assets reducing commercial risks.
4. And the most important factor – any franchising concept must have reliable proof of its success. If the business overcomes the economic hardships and moreover introduces a new franchising concept to the market, it is worth studying this business offer. “Crisisproof business” may become a new quality mark for a franchise.

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Fresh Fashion Franchise Preps for European Expansion Campaign

admin — Thu, 17 Sep 2009 18:22:25 +0000

When Portuguese lifestyle brand Sacoor Brothers set up shop in Dubai a little over three years ago, its promoters and owners knew it was not going to be an easy market to break.

In a playing field already flooded with some of the biggest names from Europe and around the world, Sacoor Brothers, although already a household name in its home country, was going to have to face up to some tough competition.

It had to go for the jugular.

And that, according to Gonçalo Veloso, who spearheads Sacoor Brothers’ international operations, meant going back to fundamentals.

“We were very strong on our service style, that is what has defined us from the start. We knew that if we provided the best service, people would come,” he says.

There are now six Sacoor Brothers stores in the Middle East, of which four are in Dubai. Two more are scheduled for the region, a fifth in Dubai and a new one in Kuwait, which will bring the total number of global stores to 55 before the end of the year, says Veloso, whose company recorded an annual turnover of €50 million (Dh261.4m) last year.

“Part of our success is because there was a need for a brand such as ours in the mix. There are few companies that offered the kind of service style, the quality and the retail environment and our price points,” he says.

Like its first store at Dubai Festival City, each Sacoor Brothers outlet features live classical music during peak hours, a “Sacoor Lifestyle Zone”, which includes a bar service offering tea and coffee and a dedicated tailor’s room service, so customers can walk in and walk out with fitted clothes.

A monthly audit system is employed to monitor all franchises and outlets around the world.

The service style in the UAE is slightly different from the brand’s Portuguese stores, says Veloso.

“It’s better and grander because we wanted to differentiate ourselves in a new market. We wanted to stand out by offering things other retailers didn’t.”

Globally, Sacoor Brothers has also invested heavily in advertisement, sponsoring famous Portuguese and Brazilian personalities.

Current campaigns include stars from hugely successful TV series CSI: Miami and Prison Break.

Started by four brothers in Lisbon in 1989, the brand covers a range of men’s, women’s and children’s ready-to-wear, including shoes and accessories. Starting off with Spain, Belgium and Romania, its international expansion in the Middle East has now become a priority to the brand, says Veloso, whose company has partnered with Bahrain-based Jawad Business Group in the region, which also owns the franchise of brands such as Mango, FCUK and Accesorize among others in the Middle East.

“The region is characterised by a very particular social and economic conjuncture and the acceptance of top European brands is a reality. Then there is the potential it has, making it a fantastic marketplace.”

Despite the travails of being part of the current international retail market, the UAE and the region has however shown strong growth numbers for the brand.

“Our store at Dubai Festival City posted a 23 per cent sales increase in July from the same period last year, while our Portuguese stores showed 14 to 15 per cent growth,” says Veloso, who recently supervised the opening of a new outlet at The Dubai Mall.

Another store is scheduled to open before the end of the year at a new mall in Mirdif.

The company has also adopted various branding modifications keeping in mind the sensibilities of the regional market and the customers it wants to win. “If you look at our Portuguese and European stores, our brand is usually associated with our logo, which is a greyhound, and which features prominently in all our properties. But in keeping with cultural and religious sensitivities, all our Middle Eastern stores feature the Sacoor name instead of the logo,” he says.

“I think this is a great example of just how important this market is to us and the faith we have in our customers here.”

Uncertainties in global markets have, however, halted other expansion plans for now, says the official.

“We only want to focus on the best projects and on markets that we are confident with. At this point in time, we don’t want to risk anything. We need to know and see to be sure.

“I think now the focus should be on building up the brand,” he says.

For now, Sacoor Brothers is finalising expansion plans in Poland and as markets heal, will look at entering Russia, Ukraine, Lebanon, Syria and Jordan. South East Asia is also on the road map.

“These are difficult times for everyone, the crisis is hitting us all, everywhere. I think the most important thing for us is to focus on current plans and build on what we have and aim to continue to give the best,” says Veloso.

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Hot Coffee Franchise Setting up Shop in Russia

admin — Mon, 31 Aug 2009 19:27:10 +0000

Specialty Cafe franchise Colombiano Coffee House is pleased to announce today its affiliation with International Franchising Group, LLC to expand its concept all over the world. Having garnered great success with its unique, high-quality coffee and confections, the Colombiano Coffee House brand seeks to establish a new franchise network overseas.

Colombiano Coffee House’s rich history & concept is inspired by a mythical love story taking place as far as 1923, with the opening of “Coco’s Coffee shop” in Costa Rica. Colombiano Coffee House is not your conventional corner Bistro/Café. With its terrific food and drink menu, it is the spice of Latin Taste, combined with the excitement of Latin Life, for a completely enjoyable and satisfying experience in a chic, comfortable environment. Colombiano Coffee House is thrilled to have IFG representing them in Russia and other parts of the world. “We personally believe that IFG is extremely well-experienced in Russia,” says Colombiano Coffee House’s Director of Development, “and the probability of obtaining serious contacts which will lead to signed Franchises is much higher with IFG than with others.”

Currently operating in Lebanon, Qatar and Abu Dhabi, Colombiano Coffee House understands that, when it comes to Food & Beverages, including Coffee, people all over the world want quality. O. Victor Lattanzi, CEO of International Franchising Group, LLC notes, “The Colombiano Coffee House concept is terrific, not just for the customers, but for the owner-operators as well. They are going to love the concept, the coffee, the smoothies, the food and the culture.”

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Restaurant Giant Brinker International Pens Deal to Expand Into Russia.

admin — Thu, 20 Aug 2009 15:39:47 +0000

25 Chili’s Restaurants Expected in Russian Federation by 2014

Brinker International, Inc. has entered into a development agreement to bring their popular Chili’s Grill & Bar concept to Russia. The first Chili’s will open in November 2010 in Moscow, with 25 total restaurants planned for expansion in the Russian Federation per the terms of the agreement.

John Reale, president of global business development for Brinker International said, “Russia offers vast potential for the Chili’s brand, and we look forward to sharing our unique bold flavors and dining experience with guests throughout the country.”

Brinker International currently owns, operates or franchises 203 international locations in 29 countries and two territories outside the United States. As part of the company’s goal to become the globally dominant casual dining portfolio company, Brinker International plans to have 500 restaurants open outside the United States by 2014.

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