Serbian Minister of International Economic Relations Milan Parivodic said today that franchising is not sufficiently developed in Serbia, although local entrepreneurs can obtain franchises and make great profits.
Speaking at a conference on franchising in Serbia held at the Serbian Chamber of Commerce, Parivodic explained that franchising is a contractual relationship that grants the right to the franchisee to do business under the name of the franchisor, using all know-how, procedures and the way of doing business developed under that name.
He added that the franchisor allows the franchisee to sell his goods, as well as to use his working technology, marketing, brand, corporative and trade mark, while the franchisee provides office space and employees.
According to him, by entering franchising and taking over a certain business concept, entrepreneurs have much greater business security than when developing their own business.
The Minister pointed out that some 40% to 50% of the initial capital that is invested in franchising survives, while that percentage is much lower when starting a new business. He said that in Hungary there are more than 100 franchisees, while in Serbia there are barely 20.
The prices of the cheapest franchises ranges from $50,000 to $60,000, while franchises of large and famous companies cost more than $500,000, Parivodic said and added that Serbia has a rather good legal framework for developing franchising.
He said that examples of successful franchising in Serbia are McDonald’s, Diners Club, Avis Rent A Car and Office1-Superstore.
US Ambassador to Serbia Michael Polt said that 20 million people worldwide are employed in franchising and that such a business relationship represents a big opportunity for Serbia’s quicker economic development.
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