Insight into Romanian Franchise Market
Interview with Osvaldo Iandolo from AZ Franchising, Romania.
How did you get started as a franchise consultant?
During my professional carrier I had the chance to work for some important companies operating in the franchise business. More than this I was creating for them new commercial formats to develop in franchise. I realized that my experience was very innovative and interesting for the market, so I decided to start up my own activity as a retail and franchise consultant.
Who are your clients?
My customers come from different backgrounds and they have different requirements, but all of them want to use retail networks or to start up a chain of shops. Lately more and more clients are looking for integrated commercial systems that include logistics and production and where just to open a shop is not enough. On the other hand I take care of investors that are looking for new business opportunities in franchising.
What are the current trends on the franchising market in your country?
Although the franchising market is doing well compared to the general economy trends, the long duration of the crisis made the investors more cautious in selecting the franchises. It is expected that in 2013 the franchising market in Romania will grow with around 10 %. The difficulties to obtain credit from the banks are forcing the people to invest their own money and in consequence we observe a different mix of investments with a prevalence of small budget businesses.
How many companies in your country offer franchises?
At the moment less than 100 companies out of almost 400 are actively offering franchising. We are also observing an increasing interest from foreign companies to enter Romania.
Which are the best Franchises by growth, branch and demand?
The best franchises by growth are those in the services and food branches. They have low level of investments and are ideal for self employing. 111 (cleaning auto), Dallmyer (vending machines), kingkebab (food) are some of them.
What's the average startup investment in money and time for a franchise?
It depends, but we can consider an average investment around €25,000, about the time to the market it depends on the organization of the franchisor and it is not quantifiable.
Which branches experience a lack of franchises?
At the moment we observe that baby formats, man fashion formats, and beauty formats are less present on the market as a offer for the local investors.
What is the profile of the people who choose to buy a franchise?
They are young 25-35 years old, open-minded with an average budget of €15,000.
What should a franchisor know before coming to your country? Any specific requirements, legal restrictions.. etc?
There are no specific problems or restrictions on the Romanian market in regard to legal or administrative barriers. However like any other start up business abroad, it is very important to choose the right partners and even a mentor. The most critical problems in Romania are the human resources and the beaurocracy. Because of these we are providing consultancy services to more and more foreign franchisors who want to enter Romania.
