Russian Franchise Market Overview
4April 2024
4 Апреля 2024
EMTG, the organizer of the BUYBRAND Expo franchise exhibition, presented a new rating of franchises on the Russian market.
Companies that have been present on the market in the field of franchise sales for at least 5 years and have been operating under a franchising program for at least 3 years were allowed to participate in the rating.

Analysis of the data collected as part of compiling the rating made it possible to identify industries in which the number of openings increased and decreased, the average payback period of franchises depending on the volume of investment, to trace changes in the investment potential of franchises by segment, the pace of foreign expansion of Russian franchises and other significant changes in the market.
As the rating showed, 2023 brought noticeable changes to the structure of Russian franchising in terms of the popularity of franchises from different segments. Thus, the majority of openings of franchise outlets were in the service sector (41.5%). Compared to 2022, the segment showed slight growth in this indicator (+0.4 percentage points year-on-year), while the pace of retail openings increased by 7.3% over the same period and almost equaled the number of openings in services (40%). Against this background, the share of HoReCa franchise openings decreased significantly – from 27.2 to 18.3%, which indicates a gradual decline in interest in catering franchises.

In terms of investment volume, the vast majority of openings still occur through franchises that require no more than 1.5 million rubles to start, although their share has decreased slightly over the year (from 58.6 to 56.9%). Franchises with an investment range from 5 to 15 million also showed negative dynamics; Interest has grown only in startups with investments from 1.5 to 5 million and, interestingly, in expensive franchises (35 million and above).

The average investment size, at the same time, increased in almost all segments, with the exception of retail: new retail franchises with a lower entry threshold began to appear on the market. Entrepreneurs invested the most money in 2023 in HoReCa franchises (on average, opening one outlet cost 12.7 million rubles), service franchises are in second place (5.7 million), and retail is in third place (4.4 million).
The fastest-payback franchises last year were offered by retailers (15.2 months on average). Like the volume of investments, this figure decreased for the segment year on year. Service franchise projects pay off in 16.8 months. Catering establishments take the longest to reach the point of return on investment (19.3 months).

In general, the collected data showed that the interest of entrepreneurs is shifting towards retail franchises, due to the low entry threshold, relatively quick launch and the ability to quickly return the invested funds. At the same time, there is a trend towards a gradual restoration of confidence in high-cost franchises as a form of long-term investment.