Source: InvestRomania

Date: 2004-09-12

Author: Oana Grecea

Romania has become an interesting market for foreign franchisers, with some 20 new brands coming onto the market this year, much above the European average.

The trend will continue over the next two years, according to Razvan Blid, Director of the Association of Franchise Networks in Romania. “We are part of the European trend, and globalization is expanding here as well. The reinventing of a business concept is becoming increasingly more difficult, making a ready-made business like franchise is extremely attractive,” added Blid. The most developed franchise sector is retail, while services and products are the least developed. The franchise that enjoys the greatest expansion in Romania is the Fornetti network, and by far the most expensive is Zara, which requires a EUR 5 million investment. Romania is a developing market (although franchises have existed on this market for 10 years), and there is no time to define new concepts for alignment to the world market, according to the Director of the Association of Franchises in Romania.

Based on a study carried out by members of the Association of Franchises in Romania, over 130 franchise brands have been identified, of which over 60 have appeared in the past two years. The most extended franchises are Ticket Com, Smartree, Orchestra, Astarte, Terranova, OVB Allfinanz, and Newman. Romania presently has 21 of its own franchise brands: Acces Press, Ambasador Plus, Angst, Baduc, Cris-Tim, Coco-Rico, Cubics, Depozitul de calculatoare, Elvila, Fiatest, Gett’s, Gogoasa Infuriata, Lexxas, Pro-Natura, Tina R, Top of the Mall, Vinexpert, Ziua, Smartree, Bella Italia, and Just Sons Studio.

Franchise conditions

McDonald’s To obtain this franchise the client is obliged to contribute the following: an initial one payment fee of EUR 45,000; an interest-free guarantee which will be refunded at the conclusion of the franchise contract; and a monthly percentage based on sales. One of the obligations of the franchisee is that of providing some sort of support to the local community. Many franchisees opt to support local sports teams or offer scholarships, recognizing that a part of the personal satisfaction in business comes from such activities.

T!na R Another successful franchise in Romania is the clothing company, Tina R. It has opened 14 franchises since September 2003, and can be considered one of the most dynamic networks of its kind. It costs some EUR 50,000 to become a Tina R franchisee, says Alin Galatescu, the company’s Artistic Director. As with all franchises, the main benefit of this ready-made business is the know-how offered by the franchiser. The franchise fee is EUR 10,000, which includes a team to the location where the store will be opened, advice on how to arrange this, experience from other stores, a marketing team, and continuous assistance for the duration of the contract. The first franchise stores to be opened were those in Râmnicu Vâlcea, Bacau and Pitesti, while the most recent was in Galati.

The new franchises that came onto the Romanian market in 2004:

Alain Manoukian - women’s and men’s fashion;
Zara - women’s and men’s fashion;
Jeff de Bruges - chocolatier;
Ticket Com - services - publicity, vouchers;
Coka Club - services - taning salon;
Happy Food - Italian fast food;
Caribu - children’s fashion;
Pronto Wash - services - carwash;
PreMaman - women’s and men’s fashion;
Basic System - cleaning services;
Intersport - sporting goods;
Athlete’s foot - multibrand footwear;
GoldenPoint - women’s stockings;
Pano Boutique - services - publicity;
Kiddy’s - fashion; Class - fashion;
Pull and Bear - fashion;
Massimo Dutti - fashion;
Bershka - fashion; Stradivarius - fashion.