Marica Vidanović, Franchising Center of the SCC - You can earn more money through franchising than by starting your own business

Franchising is the use of a profit-proven business model of another business entity. It`s a distribution method, where the product or service owner (franchisor), gives the possibility and sells the right to the franchisee to act in the market under his recognizable name/brand and distribute its products or services; uses its name and brand, "know how", method and system of business, advantages through experience in the market, receives training and profitability guidelines.

In September, the Serbian Franchise Association was founded, which cooperates closely with the Serbian Chamber of Commerce. Marica Vidanović from the SCC Franchising Center, who is also a member of the Board of Directors of the Serbian Franchise Association, explained the value of franchising, who this business model is for, what the prospects are and what the future of this model is in our country.

- The percentage of successfully implemented franchises, whether someone buys a franchise brand or wants to create a franchise from his existing business format, is precisely for the reason that it uses a proven, systematized, profit-oriented business model of another legal entity. The franchise relationship is based on the transfer of specific knowledge, "know-how" and business secrets, which the franchise owner transfers to the franchisee through training and thus ensures an easier path to joint business success.

The franchisor can be any entrepreneur or legal entity, who is the owner of a trademark and visual identity recognizable on the market, but who performs work that brings profit in the long term, a business that is built around a unique or unusual concept or at least possesses a competitive edge in the market, a business with the possibility of wide geographical application, a business that is easy to manage, a business whose operating costs are not extremely high, and a business that is easy to duplicate (copy). It is expected that the future franchisor will implement its concept, ie. successful "know-how", and it is certainly also obliged to "translate" it into written standards, in order to be able to transfer his experience to the franchisee. This can sometimes be a great stepping stone for companies entering into franchising, because undoubtedly with this procedure in a large number of cases, they improve their own system of work.

The franchisee is a completely independent legal entity, which, by purchasing a franchise, defines the way it will operate on the market. The franchisee must certainly have certain funds at his disposal, who wants to work within the system and according to set rules. By accessing the network, he acquires the right to use all the elements that are the subject of the offer: the method, system or know-how, products, brand and image, assistance before, during and after opening, etc.

"Follow the rules" is the basic premise of franchising and very important for the franchisee`s success. Franchisees buy a franchise with the belief that they will achieve success and profitability operating in accordance with operational rules.

Franchising does not suit everyone equally. Some prefer complete independence to succeed on their own, while others prefer working conditions in large companies. For the partnership between the franchisor and the franchisee to be successful, it is not enough that the franchisee likes the business model, but also the culture, values ​​and goals that follow a business model. And, it also applies in the opposite direction.

- a large number of choices;

- lack of knowledge and experience can be compensated by training;

- a higher probability of success than in independent entrepreneurship:

- the recipient is an independent businessman;

- shorter time needed to start a business:

- initial training and ongoing support;

- assistance in finding the optimal locations;

- the sales power of a well-known brand and quality goods or services;

- the possibility of using a functional business model;

- lower expenses through group procurement, national and regional promotional and marketing campaigns;

- contacts with new customers through the corporate customer service or website, contacts with other franchisees who can provide moral and counseling support and exchange of experiences through internal communication channels or annual conferences and assistance in business financing.

In Serbia, franchising as a business concept was most prevalent in the service sector (hospitality - fast food restaurants, traditional restaurants, then real estate sales, car service, business services, maintenance, hotel management, tourism, etc.). A big "boom" has been noticed in the area of children`s education, in terms of mental arithmetic,

On the other hand, regarding the development of franchising in Serbia, there are many factors that need to be improved or introduced:

- no laws regulate franchising;

- lack of professional staff for franchise operations / legal and economic issues;

- absence of support for development from institutions and the state;

- both startup and entrepreneurship growth rely mostly on own finances;

- lack of banks interested in franchise business, i.e. granting special franchise loans;

- lack of support from institutions and development agencies;

- lack of strategic thinking among small entrepreneurs, fear of competition;

- entrepreneurs are reluctant to accept this way of growth for fear of intellectual property theft;

- absence of Franchising Law and Disclosure LAW - lack of protection of the franchisee and franchisor.

- The interest of businessmen was great, which we expected. In addition to Belgrade, we visited Kruševac and Novi Sad, to begin with, because the held series of seminars was just an introduction to what SFA plans in the coming period. There was a much larger number of those who were interested in creating a franchise from their existing business, but they don`t know how, what is needed, how long they need, and certainly what we emphasize at every performance is that great attention must be paid to the Franchising Agreement, which is very complex, and has to be done by someone with a lot of experience.

Besides the Agreement, written procedures and manuals are indispensable and represent the transfer of "golden know-how", because that`s exactly what the recipient pays when they enter the franchise. Certainly, the Serbian Franchise Association will continue to provide consultations to all interested parties, precisely in order not to make mistakes in the beginning that can "cost" a lot to both parties.

In the discussions that the Serbian Chamber of Commerce conducted with the European Franchise Federation (EFF) and the World Franchise Council, as two world-renowned institutions that gather all national associations and globally recognized experts in the field, with their recommendation, and SCC also recognized that it was an excellent moment to establish a new National Franchise Association in Serbia.