Romanians’ appetite for investments in franchises, increasing by approximately 30% in Q1 2023

In the period January-March 2023, most franchises were opened in Bucharest, Brasov, Craiova, Iaşi, Bacău, Constanţa and Timișoara, with average investments between 80,000 euros and 100,000 euros, Franchwise reaching a total number of 300 openings intermediated franchises, which represent total investments of over 22 million euros. The most attractive areas for a franchise business are ice cream parlors, cafes, convenience stores, convenience stores, consulting and business mentoring services or franchises in the field of photovoltaic panels.

“We see an increased interest in business investments, especially franchises, because there is a process of mindset change at the social level: Romanians are more open to entrepreneurship and especially to the choice of franchising as the first form of entrepreneurship due to the fact that it represents a safer investment than a business on your own. We see more and more often the replacement of loans for apartments with loans for investments in starting one’s own business. We feel an increased interest in financial and entrepreneurial education, which helps the Romanian business environment to develop. Although the franchise market is still an insufficiently explored territory in Romania, at the regional level we have a considerable advance compared to Bulgaria or even Hungary, franchises contributing exponentially to the development of the local entrepreneurial culture”, declared Paul Voicu, Franchwise Managing Partner.

Regarding the profile of Romanians who invest in a franchise, 60% of them are men and 40% women, over 35 years old, most of them in their first business. In general, those who want to open a franchise invest in services (from networking and business consulting to education services for children), niche retail (convenience stores, florists, etc.) and HoReCa – here the focus being on businesses that sell a single product and on the customer experience, such as gelaterias, specialty cafes, confectioneries with gluten-free desserts, pizzerias, etc.

Launching a franchise business has become attractive for Romanians due to the many advantages it has, among which: the know-how offered by the franchisor, the recipe for business success and the high chance of success, the rapid growth, the power of the brand and ongoing assistance for the franchisee. Having access to resources, Romanians have greater confidence to open a business and start with more chances of success.

Investments in franchises, from 15,000 euros to over 250,000 euros

A franchise business can be started with amounts between 15,000 euros and 20,000 euros, such as dessert franchises, focused around a single product – fresh donuts from Hello Donuts, waffles of various varieties from Bubble Waffles. However, investments can exceed 100,000 euros, for the opening of pretzels or simigeria (the Simigeria Petru franchise), pizzerias (Treevi Pizza) or even specialty restaurants (the Bread and Wine project of the Sosa&Sosa group, which also operates the Energiea and Expirat brands, with vast experience in the field of food & beverage).

Also, there is an increased interest in investing in master franchises, where the domains are diverse – from gelato shops with sugar-free products (Yole franchises) to business performance optimization with the help of drones (Coptrz franchises). Master franchises involve investments of over 250,000 euros, being attractive in general for entrepreneurs with business experience, who want to complete their existing portfolio of businesses with a franchise or to diversify their business activity.

Regardless of the type of franchise chosen and the level of investment, the amounts represent the average investment for opening a turnkey business, including franchise costs.

“Franchises do not come with a recipe for success, but certainly the chances of success and returns are much higher than in a traditional business, if a number of factors are taken into account. For example, for a business that needs a location to perform, the results depend in particular on three pillars: the brand, the involvement of the franchisee and the ford (the location itself). For the future entrepreneurs who want to open a franchise, I encourage them not to look at the franchise only as an investment – the entrepreneur’s presence in the business is needed in order to achieve performance. The franchise does not run itself.

I also encourage them to talk to themselves, analyze what their desires, needs and abilities are and choose the right franchise for these desires. Once the right franchise has been chosen, I encourage them to do their homework, turn to experts and not miss important steps in the process – from careful data analysis to discussions with franchisees in the system and getting to know the franchisor and his team, a team that will be involved in providing assistance to the franchise network”, explains Raluca Voicu, Franchwise Managing Partner.

The service sector is constantly growing in Romania (from education services for children to business consulting services, business networking clubs and green businesses. Commerce is not left behind either, a market where the most attractive investments are proximity retail stores (My Inmedio network). In HoReCa, another attractive area for franchises, the market is consolidating, investments in franchises in this sector being oriented towards brands that rely on a single product and that have the purchase experience at the center especially for customers (ice cream shops, specialty cafes, pizzerias).

The recovery of investments in a franchise depends on several factors (from the attractiveness of the marketed product or service to its operating mode, as well as the potential for scaling at national level). On average, the recovery period for investments in franchises in Romania is between 2.5 and 4 years.

About Franchise

Established in 2011, Franchwise is the largest consulting company specialized in the field of franchises in Romania, contributing to the development of the Romanian entrepreneurial environment.

Until now, Franchwise has helped over 60 companies in Romania to expand through the franchise system and has developed over 300 franchise projects in the market, total investments of over 22 million euros, helping entrepreneurs to invest in the right franchise and to value in the business environment. Franchwise is also involved in the development of international projects in Romania, such as Logiscool, TUI Travel, Ethan Allen, Sacoor Brothers.

To support entrepreneurs and future entrepreneurs to develop their businesses, Franchwise has developed franchising courses for franchisors and franchisees, attended by more than 100 companies to date. In addition, the company continued the development of the ecosystem of resources and tools dedicated to the franchise community in Romania, Franchwise being the main partner of the STUP project dedicated to entrepreneurs, developed in partnership with Banca Transilvania, but also the development of financing tools to support the franchise, without collateral guarantees from the franchisees, those who invest in franchise businesses in Romania.