Modern Trends and Models of Franchising Development in Russia

The  presented study examines the  models of franchising development in  Russia and  modern trends in the  development  of  the  franchising market, briefly describing modern franchising models.

Aim. The  study aims  to  identify patterns  and  trends in  the  formation of  franchising systems  in  Russia  in  order to  formulate  recommendations for enterprises  with a  potential for development  as  a franchise.

Tasks. The  authors analyze the  materials of  information and  exhibition websites on  franchising development (buybrand.ru, franshiza.ru), relevant works of modern researchers of franchising practices (L.A. Mikhailova,  N.V. Rasskazova,  A.V. Pokrovskaya,  etc.),  periodicals and   newspapers, industry associations and  unions (rusfranch.ru,  Russian Franchise Association – RAF), and  scientific works of foreign authors on  the  subject.

Methods. To achieve the  set  aim, this study uses  analytical methods, including synthesis, classification approaches, methods for systematizing  and   structuring  information in  the   field  of  franchise business.

Results. The  global economic crises of  2009  and  2015  defined the  new  socio-economic conditions for business. A decline in  the  investment  attractiveness  of  new  projects  and  consumer purchasing power has  led  to the  closure of many recently commissioned production facilities, strengthening the  position of  long-standing  brands and   companies. This   has  facilitated  company development  in  the   form of franchising and   transformation  of franchising  models in  light  of deteriorating  international  trade relations.  New, flexible forms of  joint business have   emerged, such   as  when   the   franchisor is  a  coinvestor of the  franchisee, splitting risks and  costs (branchising); when  the  franchisor relaxes requirements  for the   franchisee and   allows   departing  from the   instructions  (free franchising); when   the franchisor provides the  franchisee with its own  outlet, dealing with the  strategic  aspects  of  business development  (refranchising).

Conclusions. Examination  and   assessment  of  the   economic efficiency  of  the   new, flexible forms  of franchising and  their practical application in  the  context  of  economic and  political turbulence make it possible to  minimize risks for all  parties and  provide insight into  the  factors  that ensure sustainable  development  of  the  franchising business in  Russia.

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