Contemporary Problems of Social Work
Socio-economic problems of franchising in Russia
Автор/Author: Dzhibabov M.R.
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In the Russian market, franchising is a new form of doing business. This concept is more and more popular among businessmen, so many people want to know the legal regulation of franchising. This way of doing business primarily attracted the attention of entrepreneurs who have just started their business. When the owner has worked enough time in a particular field, has accumulated enough experience in this area, has enough skills and knowledge of this area, has a desire to grow, to move on, have the financial capacity, the creation of their own successful enterprise looks absolutely logical. To had conceived an even larger percentage of success, this can be done under the auspices of a large company that has vast experience in the market and the business scheme, which is accumulating for years. Franchising is one of the most important components of the "budding entrepreneur" in many European countries (Sweden, France, America, etc.). The main essence of this economic instrument is that one firm allows another to operate under its name, using methods and communication first. The first company called the franchisor, and the second franchisee. As you might guess from the foregoing, in the role of the franchisor acts more successful and large company, and in the role of franchise start-up companies. The rights granted to its own brand, called the franchise. 
Russia has many economic challenges, which require new methods and new economic mechanisms. Franchising is one such mechanism. This economic tool increases the efficiency of small business. This is what our small businesses need at this time. It joins together small and large businesses very correctly and subtly. The history of the development of franchising abroad is quite rich. This tool is used abroad for half a century. It was first used by Zinger for sale sewing machines. Interest in Russia to franchise appeared in the 90s. At that time, there were a few franchise systems. At first, there were huge expectations for this economic instrument, but they did not materialize. There were problems that prevented the development of franchising. This paper analyzes the causes that led to these problems. We must begin with an accurate study of the basic concepts and definitions that characterize the tool. In our literature, the term "franchising" has appeared more than 11 years ago, when the first studies on it have been published. They are experts drew attention to the very concept and its aspects, thereby formulating their own definitions in the papers. 
Franchising is booming , because it combines the personal incentive of ownership with management and technical skills of big business . It is important to understand - for entrepreneurs , franchising offers a quick path to growth , that given they ready case. It is important to understand - for the franchisee Franchising enables rapid expansion. Franchisee growing, allowing businesses to finance its growth through the sale of franchises .
It so happened that the franchise is not widely used in Russia. There are many problems that hinder its development. These problems can be classified on the reasons for which they occur.
Social and psychological problems , which include :
• the absence of any experience, which is why there is the fear of the franchisor and the franchisee ;
• franchisees fear that he will lose independence.
Contempt of intellectual property in our country is the most important socio-psychological factors. To solve this problem, you need the right combination of economic and legal impacts. Their interaction should not make unauthorized use of someone else's effective intellectual property. The entrepreneurs in franchising poorly trained, which is the educational problem of franchising. The solution here is simple enough, but expensive, but still need more time to make the decision to bear fruit. We need to create training centers franchise, and you can create a network of centers that can advise on matters relating to this economic tool. You cannot deny the fact that educational programs lead to the expansion of knowledge in the field of franchise law and economics. 
There are also economic issues of franchising. Franchising is an economic tool for the implementation of which required economic background. In Russia, these packages are not completely formed. The economic problems include:
the instability of the economy, that scares foreign companies, because franchising requires clear of the economy where there is stability and where possible predicting respectively;
many entrepreneurs are potential franchisees, but they have enough starting capital to enter the franchise system;
getting credit for the creation of start-up capital is almost impossible.
This listing is a major problem is the instability of the economy. If you go back to the definition of a franchise, it is first and foremost a system of relations, anchored again a system of treaties. Naturally, such a system, besides uniting economically independent entrepreneurs, it is inertia. 
Also quite important is the issue of lack of funds needed to buy a franchise, retail premises and equipment. Getting a loan, as described above, it is almost impossible. It is necessary to have a great business plan, which will be able not just to clarify the basic idea and the essence of its own, but also be able to convince. Funds are very important in the franchise system as a franchisee must invest nearly 50% of the total amount of own funds. It can be concluded that when choosing franchisees personal financial responsibility is a necessary requirement.
Many are forced to because of the lack of own funds to open their businesses in the leased premises, the owner of the change adversely affects the operation of both the franchisee and the franchise system as a whole.
It is necessary to take into account the fact that the franchisee has to pay a one-time franchise fee, called a lump-sum payment. It turns out that starting capital should be enough to have an impressive franchise. With this capital does not have many domestic entrepreneurs. Trying to get start-up capital in the form of bank credit also faces a number of challenges: the level of profitability of franchisees with all the regular payments (royalty payments to the central advertising fund and other payments) may lead to the fact that the loan repayment period will be big enough, and given the current rates of credit, and even impossible, the current legal system is even more difficult to credit franchisees. 
There are also the so-called organizational and legal problems. At present, Russia has many problems are concentrated in the field of law. Franchising is a system of relations, which is based on a system of contractual relations. This requires a clear and serious legal framework to which we still have to strive and strive. In the modern Russian legal system, the term franchising occurs only once, in chapter 54 of the Civil Code (the Civil Code), which states: "commercial concession" is synonymous with the franchise. However, the most superficial analysis of this chapter provides an opportunity to assert commercial concession is much narrower concept of franchising; Franchising in Russia is basing on the complex agreement, based on the number of articles of the Civil Code and legislative acts that are to bypass the legal schemes. 
The development of the franchise should be maintained at the state level. Inhibits the development of our legislation. If foreign countries these sort of activity requires no formal registration and registration, according to the Civil Code of the franchise agreement must be registered with Rospatent, which can lead to bureaucratic delays. There is also no legal basis, which is so necessary. In the Russian Federation virtually no laws on franchising while in the US there are hundreds of laws about this economic tool, and it is only at the federal level. 
All this complicates the use of franchising in Russia. These circumstances do not allow our economy to grow franchise. We also need changes in legislation of the Russian Federation, which will not interfere with, and will help to develop and improve the efficiency of economic instruments. It is necessary to achieve the following objectives:
- It is necessary to provide the convenience of the application of laws relating to the franchise, the parties to it;
- Need to ensure the conditions for effective competition with franchise systems traditionally established mechanisms for the sale of goods;
- Require transparency franchise and all its aspects. This transparency is necessary for regulators.
These objectives are closely related to each other. In order to realize these objectives, it is necessary to establish a system of legislation that will fix the necessary steps to create a franchise system, which includes samples of contracts and many other documents, which are used for different types of franchising. 
In this case, the business will be sufficient normative information. They clearly will understand why enter into a contract, what scheme of benefit to them all, a sample of the contract must be chosen, and most importantly, what laws to regulate the selected scheme can be applied in case. This is a huge minus in our legislation, there is no such clarity.
Analysis of franchises operating in the Russian market shows no single approach to the regulation of relations by means of franchising, a priori inherent to foreign analogues. Cons our legislation on franchising that this concept itself is not in the legislation, and for some reason there are strange reluctance to equate franchising and commercial concessions. Also, there is spontaneity in the development of the Russian market, which forces foreign right holders waive this economic tool in our country.
The clearest indicator that very well illustrates this trend, is the experience of two well-known competitors in the market in the field of fast food - a McDonald's (fast food restaurant) and SubWay (fast food restaurant).
McDonald's is the leading global franchise, he is all over the world, and he refused to sell franchises in Russia and proved the correctness of his choice of the successful functioning here in the last decade. Selecting a different concept for the Russian market can be explained by the following fact: in the early 1990s. Russian McDonald's thought about franchising to build local distribution system, it is now franchising in Russia for companies simply irrelevant. 
Most of the problems linked to the franchise the fact that entrepreneurs are poorly trained. They cannot act as an organizer of franchise systems, they cannot act as a franchisor, cannot work in the system as a franchisee. The solution to this problem seems simple at first glance, it is obvious that for this purpose it is necessary to create an educational system which would be trained and prepared to sufficiently our business in this area, but this requires huge resources and highly qualified specialists. This system must have two directions:
- Wide, which will promote franchising as an economic instrument;
- Narrow, which will provide targeted advice to franchisors and franchisees on specific economic issues of franchising.
These areas should be closely connected with each other and to complement each other.
Extensive educational direction in the field of franchising can be built on the system of training centers, to be located throughout the territory of Russia. These centers should be built for training the franchisor and franchisee for. These establishments may also be used in the initial stage of a franchise system, where the company's employees fashionable forward here, that they make it easier to understand the essence of what they need to do and what to achieve. This is how to prepare soldiers for war, but after the training, they will have an idea of this economic tool. Also it is necessary for all higher education institutions to introduce subjects on the most important concepts, topics and aspects of franchising. 
The second direction (narrow focus) linked to the development of management consulting on franchise. This advice should cover both the general problems of franchising, as well as some of its sections. For example, the legal aspects of franchising, the franchisor and the franchisee interaction, selection of personnel for the franchisee, the organization of accounting.
There is also a huge minus for the franchise of the foreign company, which is necessary to know and keep in mind from the beginning of interaction: each actor must promote the franchise system and is responsible for promoting the brand of the franchisor in the territory and in the country in which the franchisee. This is one of the main objectives, incentives and interests of the franchisor, which is aimed at the development and distribution of its logo. Briefly outline diagram in words, it is this: The company is headquartered abroad. It transmits on certain conditions the right to manage its own brand in the domestic Russian representation - master franchisor. The company undertaking the franchise in a particular area, is responsible for all activities franchisees throughout the area in front of the head office abroad. Plus for themselves as for the company, organizing this business. Given that not all foreign and domestic legislative frameworks are synchronized, you have to realize that if a foreign company will have a serious violation of the master franchisor, or from one of the franchisee, it can in one moment to suspend the activities of the entire network in a particular area. This means that automatically suspended the activities of all franchised outlets. 
For franchisees, there are other nasty things that are very important for the franchisor and that it is necessary to bear in mind the franchisee. For example, follow-up visits, which arranges the franchisor (such procedures like abroad) without warning. There are certain standards that must be met perfectly. Any deviation from them is a flagrant violation. The consequences can be very unpredictable. The master franchisor warns revision, so do not confuse these two audits. We must carefully adhere to accepted standards, to avoid unforeseen circumstances. 
The fact is that the franchise has not spread in our country due to the specifics of the country, and due to the fact that we have little knowledge in this area. About this economic tool is not very knowledgeable not only the population, but also businessmen. It turns out that we have a poor training of entrepreneurs who could act franchisees by taking certain steps, was the organizer of franchise systems.
In spite of all the barriers and factors that hinder and impede the development of franchising in Russia, gradually developing franchising and developing well. This effective form of business attracts a large number of all entrepreneurs who actively use it. But at the same time the value of its Russian economy overestimate is hard: for the franchisor - is one of the fastest and most effective ways to create new independent businesses united in a single system for the franchisee - to develop their own business based on a proven business model, and for the state - It is an effective tool to support small and private entrepreneurship and therefore the development of the Russian economy. Many experts say that the development of franchising in the Russian Federation will be even better, so we need now to join the franchise system to be one step ahead of their competitors. 
From the above it can be concluded that there is ample opportunity for the development of franchising in the Russian Federation. You just need to create certain conditions, for in our legislation there are big gaps on the economic tools that prevent the implementation of these features. We need a legislative initiative on the development of the law on franchising and making appropriate changes to related laws and regulations. The government program to include support for small businesses, so that they had enough seed money to sign contracts with franchisees. It is important to create a system of tax incentives for franchisees, especially at the initial stage of development of the franchise system. It is advisable to allow the use of franchisees simplified accounting system. 
It is also necessary to create training and consulting centers on issues related to franchising. They need to create not only in the center, but also throughout Russia. Let everyone see and understand the techniques and tools of economic melon effectiveness of its action. As we can see, the prospects for the development of franchising in Russia are high. It is necessary to take into account the errors and gaps need to gradually move from words to action, using the results of studies of various scientists in this field. In this case, in the near future will be the franchise for our small and medium-sized enterprises for the development of a business card. Their chances of success will increase many times with the franchise that will only have a positive impact on our economy and on many of the economic indicators of the country (eg, employment, prosperity, SMEs, etc.).
In the franchising system interact with each other franchisees and the franchisor. They are connected by a system of contracts, which are based on the franchise. This control license issued by one person (the franchisor) to another person (the franchisee), which is installed between the franchisor and the franchisee specific system of relationships.
Franchising is a business activity that has its advantages and disadvantages. 
Franchising is quite a perspective view of entrepreneurship. In the normal business of the 100 emerging companies survive in the end about 20, then, using the franchise of 100 will work successfully 90. This is a huge percentage. In our country, this tool does not develop because of what our suffering small and medium businesses.  The most important advantage is that this economic tool greatly expands the market that offers consumers a well-known product or service to it, but the independence of the franchisee, as an entrepreneur, is maintained. It is very important that franchising provides an opportunity to greatly enhance the ability of small business, giving it many features of large enterprises. This, of course, increases the survival of small businesses, as well as the percentage of the risk becomes smaller, and the percentage of success is greater or more than satisfied with both sides of the franchise system. 
There are also disadvantages that are associated with the standard of the goods and restrictions on business. Franchising reduces competition, which affects the quality of the goods, which decreases. Eventually franchise system is less flexible than large corporations and, especially with small businesses.
From the experience of other countries can understand that the success of the economy and its development is achieved the correct interaction (integration) of small and large businesses. They are the basic elements of the foreign economy. Large firms bring to the system stability and manageability and a small business, the competitive environment, provides the flexibility and customization of production abroad this form of activity is considered not only useful, but also prestigious.  It is obvious that for successful economic development our country needs to strengthen the interaction of small and large businesses.
Over the past 11 years, our market went out and successfully developed Western franchise systems such as «Baskin Robbins», «English First», «Carlo Pazolini», «Kodak», «Sbarro», «Subway», «Xerox» and others.  In Russia, developed business infrastructure that should be kept in mind those companies that want to have a successful franchise relationship in our country. It can be concluded that the need for financial resources are higher, which is also an obstacle for the development of franchising. Russian franchisee is advisable to use a regional franchise and subfranchayzing. 
Franchising recently developed a little faster than it was before. This cannot not to make us happy. However, this method of distribution franchise business is quite weak when compared with developed countries. You can safely say that franchising is very interesting and quite promising in the Russian Federation. He cannot develop only with the participation of foreign big companies, but limited to our operations.