Romanian franchises are starting to find their way onto a market annually generating turnover worth one billion euros. Though they now account for 20-25% of the total franchises on the market, Romanian franchisers are expanding their share year after year by adapting to market demand: small entrance fees and diversified services.
Romanian investors are no longer seeing franchises only as a means to start a business from scratch by using the brand and expertise of some foreign companies. More recently, a growing number of Romanian firms have been opting for franchises as a way to expand their businesses.
"Many people wanting to invest in something prefer this type of business because risks are relatively low and, moreover, they receive a turnkey concept that already works. The only drawbacks of a franchise might come from the restraints imposed by the format of the business," explains Razvan Blid, general manager of CHR Consulting, a franchise consulting firm.
Benvenuti, a network of footwear outlets set up in 2004 by Dan Pavel, one of the founders of Leonardo, the biggest domestic footwear retailer, has so far franchised two outlets, in Ploiesti and Ramnicu Valcea. Initial investments needed to open a Benvenuti store stand at 120,000 euros and franchisees need to hold a bank letter of guarantee worth 60.000 euros.
Leonardo retailer in turn announced it planned to develop a network of franchises, which, according to the company's management, is a natural progress of Leonardo business. Leonardo franchisees do not pay any network entrance fees, but must present a bank letter of guarantee for the stock of merchandise.
Another domestic firm expanding through franchises is Mondo Style of Timisoara, a producer of PVC, wood and aluminium windows and doors. It now has 22 franchisees countrywide.
Price is the main advantage of Romanian fran
