The market size of the franchise sector is expected to reach $50 billion in 2021, up from $45 billion in 2020. The industry is trying to heal its wounds in the process with support such as advertising to franchise branches, franchise entry fee discount, royalty fee, takeaway. In our cover story, we investigated the support and growth goals of franchising brands. The food and drink sector in particular has suffered a great deal due to the pandemic. While small trades were affected by this process, franchise branches tried to survive with the support given from the headquarters. As the number of cases increased, restrictions re-entered our lives, while various measures were taken for restaurants that remained closed in the process. Many brands support franchise branches in everything from advertising to franchise entry fee, royalty fee to takeaway. The industry is trying to heal the wounds it suffered during the pandemic. Despite this negative picture, however, the sector is trying to maintain its growth targets. The market size of the franchise sector, which reached $45 billion in 2020, is expected to reach $50 billion in 2021. More than 15,000 entrepreneurs joined the franchising ecosystem, which employs more than 250,000 people, in 2020. With the contributions of _ v4lTIIV EML4K in Turkey, the number of chain enterprises reached 3,500 and the number of branches affiliated with chain enterprises reached 65 thousand. INNOVATIVE BUSINESS MODELS Franchise brands have developed their concepts and business models by monitoring the change in consumer habits during the pandemic process. It has introduced many elements that can appeal to the new era. Brands that had to adapt to technology had to offer a different shopping system than traditional sales methods to reach their customers. With this differentiation in shopping and the change in the way they buy, companies have focused on many innovations and differences such as concept update, product diversification, updating service items. While observing the increase in takeaway habits of restaurants in the food and beverage sector, we also see a rapid increase in ghost kitchen concepts that only work with takeaway logic. However, _HANGİ COMPANY that produces value-added products and menus GIVES SUPPORT?_ Opening (1-9) Number of branches targeted to the franchise The number of branches given supports given 1 Oses 1.102 250 As a result of the central agreements made in online sales channels, a decrease in commission rates received from branches was achieved. The commission rate issued on each order of the branch has fallen. In addition, the monthly fee charged to the branches for using online sales channels was removed as a result of the negotiations. 2 Yataş 357 150 Continues its national advertisements. It also provides regional advertising, campaigns, social media promotions, outdoor and local media advertising support to franchisees. 3 Cigköftem 320 has discounted all product groups since March 150. It has accelerated corporate cooperation processes with online ordering platforms and increased activities to encourage takeaways. 4 Mado 315 20 Businesses are supported to defer payments. 5 Otorapor 270 80 Digital marketing and vehicle routing support from the center. 6 Pilot Garage Auto Appraisal 254 96 Branches especially in terms of advertising and promotion TV, radio, Google ads. and in all social media, as well as on the PR side, the company has provided flexibility in payments, helping branches get through this period with less stress. 7 Chicken World 189 34 Loss-making branches were given turnover premium and advertising support. The lost products have been returned. When making maturities regarding debts, if there is a check, they are not printed and collected. After the branches were reactivated, the first products of this process were sent to dealers for free. 8 Bayram Efendi Ottoman Kahvecisi 187 15 Provides support for the possession of necessary materials such as masks, gloves, visors in branches, the supply of disinfectant products, improving the supply network, financially supporting franchise investors with periodic campaign products, and ensuring control of pandemic standards. 9 b-fit 160 20 Entrepreneurs were given online sales trainings. Online diet and sports sales were supported through the branches' website. Discounts or offsets were made on the amounts of their monthly fixed payments. Supporting payment plans have been prepared for franchise entry costs and payment maturities.
WHICH COMPANY PROVIDES WHAT SUPPORT? Establishment (10-17) Franchise targeted Company name number of branches Number of branches Supports given 10 Passport Pizza 160 35 All operational and logistic support such as sales, advertising, training and legal services for dealers with a monthly turnover target is provided by the general directorate. Social media and outdoor advertisements were emphasized in order to stand out in the increasing online food orders during the pandemic period, and campaigns were made in this direction. 11 Euromaster 150 10 By increasing the hygiene rules during the pandemic period, it provides all the hygiene measures and materials required for Covid-19 to the dealers. By organizing in-company trainings on masks and disinfectants, it is ensured that both current employees and newcomers in the branches are informed about the subject. 12 Realty World 120 50 Provided support for online education, online authorization agreement, online meeting, and 50% discount on payments. 13 Kelebek Mobilya 108 33 Provides support in online sales and marketing channels. By integrating its online sales infrastructure with foreign dealers, it provides support such as making contactless sales, visiting stores virtually, and receiving online live support from sales representatives during this virtual tour. 14 Altın Emlak 105 30 In this period, various supports were provided in terms of recruiting and retaining consultants. In addition, payment discounts were made in certain periods. 15 Bereket Döner 96 15 Received rental discounts by contacting the property owners one-on-one. Additional discounts of 5% were made for cash purchases. Royalty is not accepted. The center provided support for takeaway, and efforts were made to increase the sales of the branches through various campaigns. Some free soft drink support was provided. With 16 Lift Caesars 93 15 Provided many support such as payment deferral, support premium, discount in raw material areas. SGK provides expert support on issues such as VAT reduction and short-time working allowance. It reduced the royalty fee from 40 thousand dollars for 2020 and 2021 to 50 thousand TL. 17 Gönül Kahvesi 79 15 Training, audit and brand discipline support was provided. Royalty and brand promotion and development costs have been improved. TARKAN ANDER/JLL TÜRKİYE CO-CEO "Being human-oriented and fast stands out" "Our expectation in 2021 is the completion of the vaccination process, the realization of normalization to a significant extent. The potential effort of the accumulated and even newly formed capital in this period to create new areas for itself. New customer habits created by the express transition to more widespread and effective use of technology, where hygiene is at the forefront, the value of open spaces is increasing, and robustness in logistics and technological infrastructure come to the fore. There will be emerging trends. In short, being healthy, technological, people-oriented, simpler and faster, the prominent trends are now and the potential of brands that are suitable for this or that can adapt themselves to it will increase." feature-packed restaurants offer many of their products to the sales channel in a way that the consumer can prepare and consume at home. Consumers can access many products faster, such as local products, packaged vegetables and fruits, organic products, gluten-free products. Although the franchise system is the system most preferred by brands that want to grow in the new period, innovative business models are increasing day by day and attract the attention of entrepreneurs. DIGITALIZATION BRINGS TOGETHER Stating that franchising brands are also affected by the pandemic, like every sector, Franchising Association (UFRAD) President Mustafa Aydın states that businesses that do not compromise on quality with less staff in this period are in demand by investors. Critical suggestions for the franchise with the company that can catch the investors with the best quality and service before the pandemic ¦ Examine the brand promises well. ¦ Choose brands built with consumer expectations. ¦ Pay attention to the easy management of the business model, the supply power, and the support provided by the center. ¦ Evaluate the investment budget in direct proportion to the return on investment. ¦ Technological infrastructure, applications, online sales are the criteria that add value to the investment. Research these issues before investing. It can serve until 19.00. We anticipate that there will be an increase in employment, especially in professional fields such as waiters, baristas, and cooks." PERSONAL SAFETY IS IN THE FOREIGN Of course, behind all these changes are consumer behavior changes. KPMG researched the 2020 outlook and 2021 expectations in the Turkish retail sector. 'Prioritizing personal safety' and 'saving' ' came to the fore as new consumer behaviors. The report reveals that personal health and safety concerns continue around the world due to pandemic and vaccine-related uncertainties, therefore, changing consumer behavior in 2020 is expected to continue in the same way this year. KPMG Turkey Retail and Consumer Products Sector Leader Gökhan Kaçmaz says that changing consumer behaviors due to both the pandemic and technology lead to permanent transformations. Kaçmaz, 20 He emphasized that in 20 years, personal safety concerns affect supplier selection and sales channel preference as well as staying at home. Kaçmaz said, "Consumers gave priority to their personal safety during the Covid -19 process. Consumers shop less frequently, and the need for personal security stands out as one of the driving forces of the falling spending trend. Consumers expect to experience a decrease in their incomes in the next 6-12 months and therefore they prefer to save rather than spend. Purchasing preferences and levels will also remain more constrained for the foreseeable future. Saving is now the number one priority," he says. In 2021, companies that focus on cost optimization, efficiency and digitalization continue to shop at the same time. Despite the decline in store sales, the number of stores in the retail sector is increasing due to increased demand for street stores and opportunities in rents. To protect revenues Another important issue is increasing exports.Companies trying to turn exchange rate increases into opportunities have focused on their foreign sales.Which COMPANY GIVES SUPPORT?Company name Number of franchise branches Number of branches targeted to open (18-28) Supports given 18 Mobil 1 Çeenter 75 10 Disinfectant kit, The company, which supported the determination of distance rules, maximum acceptance number recommendations and the preparation of information posters, made digital campaigns for consumers with the removal of travel restrictions in June. It also shows flexibility in e-payments. 20 Auto King 56 25 Provides free digital marketing and promotion support. 21 Neşve 40 10 No franchise entry fee is requested from new investors. Product support and payment facilities are provided to existing branches. 22 BigChefs 37 9 It continued its support by not receiving payment from franchises special to the pandemic period for a certain period. In the ongoing process, it continued to receive discounted payments in proportion to the turnover of the branches. 23 Zühre 28 12 It supports its dealers with its digital marketing investments and the budget it spends on digital marketing. It likes a competitive advantage by delivering its products with a fast operation. 24 Waffle maker Akın 27 No royalty fee for 5 months. Provides online marketing support. It facilitates payments. 25 AutoGrouppe 26 24 0% interest for 12 months or maturity options up to 60 months for new investors. Also in this period, spare parts payment periods were extended. 26 25 15 In addition to periodic support such as turnover premium exemption and flexibility in royalty fees, the company also provides the opportunity to sell and exchange vehicles in the pool, and to create a financing source for vehicle purchases. 27 CarrefourSA 25 75 It simplifies the operation with systems such as supplying products at once, stock management, goods acceptance system, and tracking processes from a single place. 28 1453 Ottoman 24 12 Branches were trained on hygiene and social distance rules. Different action plans were created for each branch. Advertising support was given in regions where advertisements were required. During the pandemic process, flexibility was provided to the branches regarding the royalty fees to be paid by the branches. Pointing out that companies now have to add digitalization to their success targets, Aydın continues: "The use of digital platforms is now a necessity. The brands that can use these platforms most efficiently are the companies that are least affected by the pandemic process. The low amount of capital required for investment in the new period and I believe that with the credit opportunities provided by many banks, the franchising sector will progress rather than regress." HYBRID FRANCHISE MODEL On the other hand, brands in the franchise ecosystem began to strengthen their technological infrastructure during the pandemic process. Companies focused on many innovations and differences such as concept update, product diversification, updating service items. Consumer expectations of the hybrid franchise definition for the new era brands in 2021 ¦ The 'urgent need' category will remain important for consumers. ¦ No reversal is expected in consumer behavior and habits in 2021. Since life continues mainly at home, there will be no change in home-living expenses. ¦ Outdoor activities are gaining importance, and it is expected that clothing and equipment expenditures for this area will continue to increase. ¦ The consumer's brand loyalty is decreasing, and the tendency to make a 'price' based decision in purchasing continues. ¦ Demand for private label products will increase due to price. ¦ Restructuring continues in logistics and cargo processes to improve customer experience in e-commerce and digital channels. ¦ Cargo and logistics suppliers are expected to establish strategic partnerships. ¦ The 'same day delivery' approach will become widespread. ¦ The number of cargo companies serving the sector and their investments will increase.