The FINANCIAL — Overall in Georgia there are 5 American franchises, these are Coca Cola, Pepsi, Curves, Baskin Robbins and McDonald’s, according to the US Embassy’s commercial department.
As Fady Asly, Chairman of the International Chamber of Commerce, told The FINANCIAL, Starbucks will also be opened in Tbilisi Heights in the near future although the company itself hasn’t provided any guarantee of that.
Newly opened franchises are successfully present on the Georgian market like Curves, the women-only fitness centre which was opened in October 2009 and now serves 1,500-1,700 members in addition to 300-400 ladies in one club daily.
As George Karazanishvili, founder and CEO of Curves Georgia told The FINANCIAL, they are going to open two other branches of Curves as the business has shown to have a good track: one in March on Saburtalo and another in downtown Tbilisi also in the coming year.
“At first we were looking for franchises that could be brought to Georgia, there were 4-5 options but the most viable was still Curves which is aggressively expanding overseas and now covering over 70 countries,” said Karazanishvili.
“Hence we obtained a license from Curves after 4-5 months which cost a fair amount of money but they also required our staff especially manager and trainer to go to the UK for training. Then we obtained support from franchisers (Curves) – which included all necessary facilities needed to run the franchise. The opening was delayed for 3-4 months,” noted Karazanishvili.
“The main thing you need to start up franchising is to develop a good strategic plan and assure franchisers that it will be successful and profitable. In addition it’s required to pay a monthly fixed rate in order for the franchise to operate. But this rate varies as some franchises obtain it from profits and others from income,” Karazanishvili told The FINANCIAL.
Generally to make a franchise business in a country, as a starting fee you’ve to pay 10,000-100,000 USD in order to obtain a license. The average franchise fee runs from 20,000 to 30,000 USD, and each franchisor has its own set of financial requirements a franchisee must meet to qualify.
For instance for Curves franchise making, the initial franchise fee is 39,900 and it ranges according to the country and the agreement is made for 5 years with a royalty fee of 5%, according to thefranchisemall.com
The McDonald’s franchise costs on average between 20,000-50,000 USD with 20 years total agreement and renewable. McDonald’s requires franchise owners to have substantial financial resources, including 100,000 USD in liquid-able assets.
Besides the franchise fee, other up front McDonald’s franchise costs could include professional fees such as legal and accounting services, insurance, and operating licenses. Employee training, inventory, and equipment are usually part of the start-up as well. You may also incur grand opening and initial promotional expense to get the business going.
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