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How to open a franchise
in Russia?

As the evidence from developing countries’ experiences shows, the franchising boom, as a general rule, falls on crisis years, and Russia is not an exception. After the worldwide curfews, quarantines, and lockdowns, related to the COVID-19 pandemic, many business owners in Russia will be forced to close down their enterprises due to financial problems. Some of them will have to become salaried employees and work for someone else; the others will search for new investment opportunities.

The most attractive investment area in this situation is franchising that has lower risks and some other advantages in comparison with doing your own business. It allows entrepreneurs to switch over to partnering relationships and start their work under a well-known brand with a smoothly-running business model. Taking into consideration the fact that the franchising market segment in Russia has been growing rapidly in recent years and the franchise stores’ number has already surpassed 70.000 by the beginning of 2020, it is the best time for franchisors to enter the Russian market.

It is self-evident that before expanding into any new market, the franchisor has to conduct market research, especially when it comes to foreign markets. Below you will find the necessary steps which should be taken before opening your franchise network in Russia.

Businessman thinking about business strategy

1. Determine your strategy

To build the promotional strategy of any international brand in Russia, it is crucial to answer the following questions:

What are your goals?

Someone counts money. Two people shake hands

Generally, the owners of ready-made businesses have completely opposite intentions when they decide to expand. Some would like to earn money quickly, building the hype for a new product launch, and then, in the same way, quickly leave the market. The rest, in contrast, prefer to build long-term business relationships with their partners to stay in the market for a long time and make their brand recognized.

Depending on your intents, you will need to apply different tools for your franchise marketing campaign. Moreover, the specifics of the Russian market and the mentality should not be overlooked. The guide on how to deal with all these issues we present below in this article.

Is your product or service marketable?

Girl with bags represents a customer. Arm-wrestling represents a competition

The overriding goal of any company is to gain profit. Therefore, before proceeding with the promotion of your brand, you need to understand if your product or service is in-demand in the Russian market and if it is capable to generate profits.

First and foremost, you should identify who your target clients are. As cliché as it may sound, this is the initial and the most important step towards success. Without the understanding of the clientele’ demographics and psychographics, it is not possible to start any business. You should carefully study the demands of the consumers and associate their needs with your product’s features.

On top of that, it is crucial to conduct a competitor analysis to gain insights into the strengths and weaknesses of your rivals and evaluate a level of competition. This information is essential for the franchise presentation to your future partners.

Do you have a recognized brand?

Hamburger represents a well-known brand. Slice of bread and butter represents unknown trademark

Are people talking about your brand? Is it identifiable by the Russian audience? If yes, it makes your life easier. If not, you will have to make more efforts to explain the benefits of your franchise to the potential franchisees. More probably, first, you will have to promote your brand in the Russian market by yourself and only after that create the franchise network. In this case, the whole process takes more time and requires more investments from the trademark owner.

What is your budget for your franchise promotion?

Big bag with currency notes. Small bag with coins

Are you planning to apply only low cost or free of charge marketing tools? Or can you afford the high expenses for the marketing campaign? There are plenty of promotional tools and methods with different effective outputs and prices, which can be relevant for your particular situation. We will describe them below.

Who is a potential buyer of your franchise?

Owner of big enterprise near his production facilities. Owner of small business near his store

Besides the end customer persona, you should also create a profile of your future partner. It is necessary to investigate who the potential buyers of your franchise are to target your advertisement better. There are two key aspects you should understand – your clients’ budgets and their mentality.

It is crucial to find out how much money your franchisee is ready to spend on business development in order to assess the feasibility of the whole campaign. Beyond that, the understanding of your future partners’ mentality is equally important because the symbiotic relationship is the only path to success.

2. Choose promotional methods

As we have already mentioned, there are numerous ways of your franchise advertising. Depending on your budget, clientele, brand awareness, and intentions, you may choose the most relevant ones.

Girl communicates via bullhorn

01. Native advertising

Girl sits on the floor and shows sign Native Advertising

Native advertisement is a type of advertisement which is designed to raise customers’ interest by providing them with valuable information.

This marketing tool is suitable for business owners who want to steadily promote their brand and consolidate a strong position in the market. As the creation of useful content not only increase brand awareness but also boosts customers' trust and loyalty, this way is beneficial both for the franchisors with well-known trademarks and for the less recognized brands.

Native advertising may cost much money or little, but in the second case, you have to invest your own time and effort to make the content.

You may find more information about this instrument here.

02. Franchise catalogs

Woman turns leaves of catalog and speaks by phone

Franchise catalogs are the websites that publish information about the franchises. We believe that this is the best way to announce yourself because the first thing your potential buyer will do is conducting a search in these catalogs.

Generally, franchise catalogs have additional functionality for the convenience of search – various filters, metrics, and franchise ratings.

These ratings may be helpful not only for the competitors’ analysis; they also give a demonstration of what Russian clients are concerned about. For instance, if, before the crisis, many entrepreneurs started non-grocery businesses, at the moment, there are precious few of them left. Today, businesses related to food and education dominate.

There are several dozens of websites in Russia that consider themselves as franchise catalogs; however, the active ones can be counted on the fingers of one hand. BEBOSS is the earliest actual franchise catalog in Russia, which was founded in 2006 and nowadays includes almost 1500 franchise business opportunities.

If you would like to read more about franchise catalogs benefits, you may check this link.

03. SEO friendly website

Three men stare at laptop monitor via reading-glass

Regardless of your goals and type of the business, the SEO optimized landing page of your franchise is a must. Based on your financial possibilities, you may build a simple single-page website containing only general information about your proposal, or you may create a full-featured site describing all the specifics of your business and brand history.

If you need help with the website development, you may request assistance from our experts.

04. Targeted advertising in social nets

Boy shoots from bow at three targets with social nets images

One more powerful tool which is especially valuable for the brands targeted at a young audience and for the franchisors who need to build hype for their product is social media.

There are different ways to advertise on social nets. You may use the built-in capabilities of social media channels for targeted advertisement, keep a blog to promote your personal brand and your trademark, interact with your potential partners and product consumers.

Should you need any assistance or support in configuring the targeted advertisements, our specialists may help.

05. Trade fairs and conferences. Promotion in the local mass media

Man speak into microphone on conference

The last instrument will have appeal for the franchisors who are ready for the large investments into the marketing campaign, because, most commonly, the participation in an exhibition, conferencing, and add placement in the media cost a lot.

However, this is a good way to show your partners and competitors that the company is in good standing. This method is definitely suited for the large and well-known enterprises.