The market size of the franchise industry, which was 45 billion dollars in 2020, is expected to reach 50 billion dollars in 2021. The sector is trying to heal the wounds it has suffered in this process with the support it gives to franchise branches, such as advertising, franchise entry fee discount, royalty fee and package service. In our cover story, we researched the support and growth targets of franchising brands.

Due to the pandemic, especially the food and beverage industry has suffered greatly. While small tradesmen were adversely affected by this process, franchise branches tried to survive with the support provided by the headquarters. As the restrictions re-entered our lives due to the increase in the number of cases, various measures were taken for restaurants that remained closed during this process. Many brands provide support to their franchise branches in many ways from advertising to franchise entry fee, from royalty fee to package service. The sector is trying to heal the wounds it received during the pandemic process. On the other hand, despite this negative picture, the sector is trying to maintain its growth targets. The market size of the franchise industry, which reached 45 billion dollars in 2020, is expected to reach 50 billion dollars in 2021. More than 15 thousand entrepreneurs joined the franchising ecosystem, which provides employment to more than 250 thousand people in 2020. With the contributions of v4lTIIV EML4K in Turkey, the number of chain businesses has reached 3,500 and the number of branches affiliated with chain businesses has reached 65,000. INNOVATIVE BUSINESS MODELS Franchisor brands have developed concepts and business models by monitoring the change in consumer habits during the pandemic process. He introduced many elements that could appeal to the new era. Brands that had to adapt to technology had to offer a different shopping system from traditional sales methods to reach their customers. With this differentiation in shopping and the change in purchasing styles, companies focused on many innovations and differences such as concept update, product diversification, updating service items. While observing the increase in the takeaway habits of restaurants in the food and beverage sector, we see that the concept of ghost kitchens that only work with the logic of takeaway is also increasing rapidly. In addition, _WHAT SUPPORTS THE COMPANY, which produces value-added products and menus?_ Opening (1-9) Franchise targeted Company name number of branches Number of branches Supports given 1 Oses 1.102 250 As a result of central agreements made in online sales channels, a decrease was achieved in the commission rates received from branches. The commission rate deducted in each order of the branch decreased. In addition, the monthly fee charged from the branches for using online sales channels was removed as a result of negotiations. 2 Yataş 357 150 continues its national advertisements. It also provides franchisees with regional advertising campaigns, social media promotions, outdoor and local media advertising support. 3 Çiğköftem 320 150 has been discounted in all product groups since March. It accelerated corporate cooperation processes with online ordering platforms and increased activities to encourage package service. 4 Mado 315 20 Businesses are provided with payment deferral support. 5 Otorapor 270 80 Supports for digital marketing and vehicle routing from the center are provided. 6 Pilot Garage Auto Expertise 254 96 TV, radio, Google ads. The company, which provided strong support in all social media and also on the PR side, provided flexibility in payments, helping the branches to get through this period with less stress. 7 Tavuk Dünyası 189 34 The branches that made a loss were given revenue bonus and advertising support. Lost products were returned. While making due dates regarding debts, if there are checks, they were not printed and collected. After the branches were reactivated, the first products of this process were sent to the dealers free of charge. 8 Bayram Efendi Osmanlı Kahvecisi 187 15 It provides support in keeping the necessary materials such as masks, gloves and visors in the branches, supplying disinfectant products, improving the supply network, financially supporting franchise investors with periodical campaign products, and controlling pandemic standards. 9 b-fit 160 20 Entrepreneurs were given online sales training. Online diet and sports sales were supported through the branches' websites. Discounts or deferrals were made in the amounts of monthly fixed payments. Supportive payment plans have been prepared for the payment amount and payment terms for franchise entry costs.

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. In order to stand out in the increasing online food orders during the pandemic period, social media and outdoor advertisements were emphasized 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 Various supports were provided in this period in terms of recruiting and promoting 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. 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 the brands that want to grow in the new period, innovative business models are increasing day by day and attract the attention of the entrepreneurs. DIGITALIZATION BRINGS TO THE PROMISE Stating that like every sector, franchising brands are also affected by the pandemic, 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 Industry 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, the need for personal security stands out as one of the driving forces of the falling spending trend. Consumers expect a decrease in their income in the next 6-12 months, and therefore they have to spend more. "They prefer to save instead. Their purchasing preferences and levels will also be more constrained for the foreseeable future. Saving is now the number one priority." Companies that focus on cost optimization, efficiency and digitalization in 2021 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 the increase in demand for street stores and opportunities in rents. Another important issue for the protection of incomes is to increase exports. Companies trying to turn exchange rate increases into opportunities have focused on their foreign sales. WHICH COMPANY GIVES WHAT SUPPORT? Company name Number of franchise branches to be opened (18-28) Number of targeted branches Support given 18 Mobil 1 Çenter 75 10 Disinfectant kit, determination of distance rules, maximum number of acceptance recommendations and the preparation of information posters. digital campaigns. 19 Chef Börek 65 35 The company, which does not receive a share of turnover from branches, also shows flexibility in payments during the pandemic process. 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 goals, 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 industry 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.