Country Presentation of Russia Presented by Yury Mikhaylichenko - - PowerPoint PPT Presentation

Country Presentation

• f Russia

Presented by Yury Mikhaylichenko

World Franchise Council Meeting February 2012, Mexico

Demographic Data

Population: 141,8 million Total area: 17,075,400 km² Population density: 8,3/km² GDP 2010 and prevision for 2011: $ 1,477 billion GDP per capita: $15,900 PPP(Purchasing Power Parity): $ 2,223 billion Inflation rate 2011: 6,7 % Unemployment rate 2010: 7,6 %

Sources: Federal State Statistics Service, wikipedia.org

Country Presentation: Russia

World Franchise Council Meeting February 2012, Mexico

Current industry data: Development of franchising

Country Presentation: Russia

2010 2011 Growth

Employees

327.426 N/A +18%

Franchisees

22.800 N/A N/A

Franchisors

595 670 +11,3 %

Objects

28.044 35055 +25 %

World Franchise Council Meeting February 2012, Mexico

Current industry data: Franchise-sectors 2011

Country Presentation: Russia

World Franchise Council Meeting February 2012, Mexico

Structure of our association:

Members: Number of members in total: 61

• full members:

56

• associated members:

2

• consultants/Lawyers:

3

• other members:

3

• franchisees as members: no

Board: Source of income:

• membership fee

90 %

• marketing activities 0 %
• fair / conferences 10 %
• training activities 0 %
• Others

0 %

Country Presentation: Russia

World Franchise Council Meeting February 2012, Mexico

5 best running franchise-systems in our country

(specify if in nr. of units ,revenue, or any other category- optional either one)

Country Presentation: Russia

World Franchise Council Meeting February 2012, Mexico

Successful international franchise -systems in

• ur country (5-6 examples)

(Please specify if in nr. of units or revenue, or any other category optional either one)

Country Presentation: Russia

World Franchise Council Meeting February 2012, Mexico

World Franchise Council Meeting February 2012, Mexico

Best exported franchise-systems (5-6 examples)

(Please, specify if in nr. of units or revenue, or any other category optional either one)

Country Presentation: Russia

Climate for franchising in our country:

Number of self employed (all self employed, not only franchisors and franchisees) in relation to employees in percent: 7,2 %

Country Presentation: Russia

World Franchise Council Meeting February 2012, Mexico

Financing a franchise-system:

Government support:

Common program of SME’s support, financing of group sales purchases, equipment leasing, working capital and start-up supporting

Country Presentation: Russia

World Franchise Council Meeting February 2012, Mexico

Legal framework:

Franchising in Russia is called "Commercial concession" and is regulated by chapter 54 of RUSSIAN CIVIL CODE (the 2 part). According to the article 1027 of Civil Code under the contract of the commercial concession

• ne party (right holder) undertake to grant to the other party (user) for remuneration for a

definite term or without reference to a term the right of using in the business a complex of exclusive rights belonging to the right holder, including the right to the trademark, service mark, and also to other contracted objects of exclusive rights – such as commercial designation, know-how etc. The contract of the commercial concession provide for the use of a complex of exclusive rights, the business standing and commercial know-how of the right holder in a definite scope (in particular with the establishment of a minimum and/or maximum extent of use), with an indication or without indication of the territory of use with reference to a certain sphere of business activity (sales of goods obtained from the right holder or produced by the user, other trade activity, performance of works and provision of services).

Country Presentation: Russia

World Franchise Council Meeting February 2012, Mexico

Legal framework:

Franchising regulations have been revised by the Federal Law 216-FZ. The Amendments to the Civil Code Part II were passed by the State Duma in second and third hearings on July 06, approved by the Federation Council on July 13, signed by the President Dmitry Medvedev on July 18. The most important items were improved:1) Now allowed to combine in an agreement stipulation for an one-time (fixed) payment and periodic royalties 1030 article of Civil Code2) Now allowed to impose prices and to set the limitation of sales to pre-defined customers in a franchise agreement 1033 article of Civil Code.3) Now allowed to renew the agreement on altered conditions but the old franchisee enjoys the preliminary right 1035 article of Civil Code.4) New opportunities for the unilateral termination was adopted, particularly in case of franchisee’s gross violation of a technology or prescribed instructions. Also franchiser shall have the right to terminate the agreement without any 'good cause' provided that franchiser shall pay the monetary compensation set forth in the agreement 1037 article of Civil Code.

Country Presentation: Russia

World Franchise Council Meeting February 2012, Mexico

Contact data of our association:

Russia Franchise Association 22-1 Marksistskaya str., 208A 109147, Moscow Russian Federation Tel: +7 (495) 670-7623 E-mail: CEO@rusfranch.ru web: http://www.rusfranch.ru Managing director: Yury Mikhaylichenko President: Merab Ben El (Elashvily)

Country Presentation: Russia

World Franchise Council Meeting February 2012, Mexico