Tendency of franchising development in Russia

TENDENCY OF FRANCHISING DEVELOPMENT IN RUSSIA

Annotation : This article is devoted to a form of entrepreneurship, such as franchising. The article considers the specifics of franchising, its main problems, as well as the conditions for the effective development of franchising in Russia.

Recently, foreign companies have noted an increase in interest in the

Russian market, in terms of launching franchise enterprises in Russia. At the same time, the development of franchising in Russia is not going as fast as it could be, since there is a number of reasons that impede proper development.

Franchising is a form of entrepreneurship based on a system of relationships established by a number of agreements in which one party (the franchiser) grants the reimbursable right to act on behalf of itself (to sell goods) to the other party (franchisee), thereby promoting the expansion of the sales market.

Now it will be turned to the main problems existing in this market, which restrain the development of franchising in Russia. These reasons can be divided into: organizational and legal, economic and social-psychological [2].

The main problems in franchising sphere are organizational and legal problems. Despite the fact that franchising is an economic tool and its problems should first of all be sought in the sphere of economy. In Russia the deterrence of the franchising development is primarily in the legal sphere. These problems are related to the almost complete lack of legal support for franchising in Russia.

Economic reasons are the instability of the Russian economy development. Franchising schemes require stability and predictability of the economy. Lack of the most entrepreneurs, potential franchisees, the necessary starting capital for entering the franchise system, complexity, and sometimes the inability to obtain loans to create seed money: these are all economic reasons for problems in franchising sphere.

Socio-psychological problems include the lack of domestic experience and fear of failure in the franchise system, franchiser and franchisee; fear of franchisees to lose their independence and their own "face" of the entrepreneur and manager is also socio-psychological problems. A special place among the problems of franchising is education as a mechanism for resolving socio-psychological problems. This problem is caused by the poor preparation of representatives of small business in the field of franchising.

Thus, in order to achieve effective franchising development, it is possible to propose a number of measures:

• •    Creation of franchising system's transparency and its elements for controlling bodies;

• •    Creation of conditions for real franchising systems' competition with traditionally established mechanisms for selling goods;

• •    Providing convenience of legislative acts application for franchise system's participants.

Also, as another recommendation, it can be noted that for participants in franchising systems it is worthwhile to introduce a preferential taxation. This regime should be entered because of:

• •    increased franchisees' costs, for which royalty, lump sum payments, as well as deductions to a centralized advertising fund are very significant;

• •    almost total absence of well-known brands in Russia that attract a potential consumer. The formation of such brands is expensive, which, in turn, reduces the effectiveness of franchising systems;

• •    the obligatory conformity of external forms and principles of work (uniform, interior, etc.) [3].

The preferential taxation will allow, especially during the promotion of domestic brands, franchising systems to compete with traditional systems of production and commodity marketing. That is due to this after several years of work on franchising schemes, qualitative and recognizable Russian goods are likely to be able to overcome these costs painlessly.

It is also worth noting that most of the problems of franchising, not only socio-psychological, are connected with the poor preparation of entrepreneurs who could act as organizers of franchising systems (franchisors) and work in these systems as franchisees. The solution to this problem is the need to create an educational system that would significantly expand the training of domestic entrepreneurs in the field of franchising. A broad educational direction in the field of franchising can be built on the system of training centers, which should be located throughout the territory of Russia. For a deeper and broader training of entrepreneurs in the field of franchising, it makes sense to include in the curriculum of higher education individual subjects and sections on franchising. The narrow direction is connected with the management consulting development on problems of franchising. This consultation should cover not only the general problems of franchising but also individual sections. Especially it is important to learn the legal aspects of franchising; the interaction of the franchiser and the franchisee; organization of accounting; selection and personnel management.