Report about franchising in Czech Republic 2014
is prepared by an international consulting company PROFIT system.

Report about franchising in the Czech Republic

Franchise market in the Czech Republic is comparatively young. It has been developing since the year 1990. Last year showed again that his popularity is increasing. The number of systems using franchising to expand rised to 219. This is an increase compared to 2012 by almost 10%. On the basis of that we saw in the first three months of this year, we can assume that even in 2014 we will see growth in the Czech franchise market. There is also growing interest in the franchise development by firms that are not using this system to expand yet.

What in 2013 also grew up, was the number of franchise units. It has increased by more than 16% and amounted to 6152. So we can see, that number of franchise unites is bigger than number of own branches of these concepts. This stems from the Franchising Report 2014, prepared by an international consulting company PROFIT system.

Trade rolled, services fell

Franchising despite lower annual growth represented an increasingly attractive way of doing business that entrepreneurs choose. It is primarily due to continued adverse market conditions. The economic situation nor in 2013 was not too friendly, which led entrepreneurs to bet on the proven concepts that work. The biggest boom was visible in the area of trade, number of systems in this area increased by 29% to 98. The most successful were grocery stores and convenience stores. Conversely, sector of services for the first time fell by 6% to 121 franchise systems.

The trend in recent years has been the development of franchise systems in the service sector. Last year the situation changed dramatically. Direction was determined by trade sector. The huge expansion of retail trade was accomplished by mainly small grocery stores or convenience stores that are starting to move into the streets directly to the people says Marek Halfar, director of consulting company PROFIT system. These include franchise concepts Daily Fresh Stores, My Shop or Žabka.

The opposite situation occurred in the service sector, where after a long period of growth, was noticed the decline in the number of concepts emerging through franchise licenses. "Great service development caused increased competition, which gradually consolidated franchise concepts in this area. It led to the departure of failed concepts of the market," adds Marek Halfar. It shows a trend that success in services was taken primarily by concepts that brought the original idea that the market was lacking. Let us mention, for example, companies with a dry washing vehicles iDry or ads on the pastry bag BK Solutions.

Foreign countries are not the main target

Even last year were foreign franchisors „beated“ by original czech concepts. Overall, the number of concepts originating from the Czech stabilized at 132, which means an increase of 11% and surpassing the share of 60%. "In Europe, the number of franchise systems that have a domestic origin, takes 70%, therefore we assume that the number of Czech companies in franchising will continue to grow," estimates Halfar Marek, director of PROFIT system. External systems held its constant growth. Most of them come from the USA, Italy and Germany.

Expansion of czech franchise systems to abroad showed stagnation in the year 2013. In this year there were 40 franchise systems from Czech presented in other countries, which is almost the same number as in 2012. This is mainly because many young franchise systems that have arisen over the last three years, are focusing mainly on the development of the domestic market. If you are going to expand, rather you look out Slovakia or other markets where their concept caught on says Marek Halfar.

The number of franchise systems rised to 219 PROFIT system forecast that in 2014 franchise market in Czech Republic will increase again