Franchise sector grows

Despite the economic crisis the franchise sector has continued to grow in Turkey.

The sector, which has grown rapidly over the last eight years, has reached a global volume of $35 billion.

In Turkey, 800 brands issue franchise rights at present, according to data from the Turkish Franchise Association, or UFRAD. In 2000, there were 150 brands authorizing franchises. Among the rise are 600 Turkish brands.

Although Turkish entrepreneurs mostly prefer companies that have franchises in the food and beverage industry, there have also been franchises opening all over the world in textiles, the automotive industry and in real estate give franchises in restaurants and food sector, textile, automotive, service sector and real estate.

The United States ranks first in terms of the number of brands that allocate franchises. Fast food is the most notable industry there in this regard, where 2,500 companies have franchises.

The data of UFRAD has revealed Turks like to take risks. One in every two people in Turkey wants to establish his or her own job, while in the United States only one in 12 feel the same way. In Finland, the figure is as low as one in 60 people. One in every 45 Germans looks for new job opportunities, while one in 12 people in Japan wants to go it alone.

Franchise costs
With the crisis, companies have begun to make it easier for franchisees, said UFRAD Chairman Mustafa Aydın. "Brands reduce costs, do not demand brand fees or develop new projects. Today, franchise costs range between $10,000 and $50,000 on average."

UFRAD is trying to diminish the impact of the crisis on enterprises, Aydın said. "In my opinion, the environment created by shopping centers is a great opportunity for the modernization of the country. It is crucial to keep this environment for the sake of our cities' modern face, to shift to registered economy, to protect consumer rights, to develop brands and secure their expansion abroad. As the owners of chain brands, we demand urgent measures to return to a "win-win" solution in shopping centers again."

New shopping centers do not increase the number of consumers in the market, said UFRAD Board Member ?zkan Mutlugil. "They have started to share existing consumers. Problems have started since 2006. They have started to grab the consumers of the shopping centers nearby."

The smoking ban also has had an important role on the current stagnation, he argued. "A transition should have been implemented. It has affected our sector in a bad way. Demanding rents in line with turnover is one of the suggestions. Many brands have adopted this structure."