The World Franchise Forum and Moscow Franchise Expo 2018 that are taking place from 30 May through 1 June as part of the Moscow Entrepreneurship Week are very important for Russia’s capital where most of the industry is concentrated. While the latest trends have been for regional brands to grow in importance, Moscow is still the industry leader largely thanks to the support the city government lends entrepreneurs. The session entitled ‘Franchising, a Reliable Guarantee of Active Development of Small and Medium Enterprise in Moscow. ‘Made in Moscow’ Programme’ was dedicated to the development of franchising and SMEs in Moscow and tools designed to support them.
Vasily Kalinkin, Head of the Investment Raising and Support Department of the City of Moscow, spoke about property rent mechanisms available to businesses. He argued that the system of relations between the authorities and businesses has become much simpler, with auction winners now getting keys to their new properties within three days.
Vladimir Chernyavsky, Deputy Head for Strategy of the Moscow City Investment Agency, pointed out Moscow’s “reasonable and integrated” system for business support and growth. He introduced the Moscow Investment Portal: “It is a major investment portal that has been set up to make sure business in Moscow is done in a transparent manner. It also acts as a feedback loop for entrepreneurs and the city government. The portal receives more than 6,000 unique hits daily, with 1.7 million visitors counted last year alone.”
The portal hosts several sections, including the ‘Guide for Investor’, which offers access to city e-services. “We can help with getting your business registered, find premises of recruit staff. Our mission is to provide one-stop-shop navigation and help businesses resolve issues,” Vladimir Chernyavsky added. Other sections include the ‘Moscow Investment Map’ and ‘Industry. Innovations’, which invite applications for renting premises and for city support.
“We have put in efforts to create the ‘Active Investor’, a new online tool to gauge the opinions of the business community on putting properties to commercial use,” Vladimir Chernyavsky said, adding that all of Moscow’s initiatives are aimed at helping entrepreneurs achieve success, something the city is strongly interested in.
Representatives of Russia’s largest franchises, the Shokoladnitsa coffee shop chain Regional Development and Franchising Director Maxim Trubnikov and General Director of the LECHU.ru chain of medical centres Igor Zharkikh, joined in the discussion.
“Global experience demonstrates that 80% of startups go out of business within two to three years of setting up shop. In case of franchises, the situation is just the opposite,” Maxim Trubnikov said. He noted that starting an independent business made sense in the early 2000s, when weak competition was making it easy to take any new concept off the ground. Now, this is an extremely hard thing to do.
In his turn, Igor Zharkikh spoke about the advantages franchises hold for beginning entrepreneurs: “Franchises offer ready-made business processes, expertise, technology and existing logistics, all of which can be had as off-the-shelf solutions. And entrepreneurs have to work within operational frameworks offered by franchisers.”