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Useful articles about franchising in Bulgaria

Despite information about franchises in Bulgaria is scarce and difficult to find (at least, it was before our arrival) we can find several articles and webs which could be useful for those of you interested in having more information about this topic.

Information is power, so let’s go:

History

Bulgaria Country Commercial Guide FY2001: Franchising Market

Factbook

In this article dated on 2001 we can find a good briefing about the situation of franchising in those years. It is a good option if you want to know more about the development of the sector. However, the most interesting part in the history of franchises in Bulgaria starts in 2006, with the opening of the two first shopping centers in the country (Mall of Sofia and City Center, both in Sofia).

BULFA (Old website)

There are several good articles in the old website of the Bulgarian Franchise Association, concerning the first franchises which entered into the bulgarian market and general information about the country. The page was last updated in 2002.

Nowadays

Bulgaria–bullish on franchising: Bulgaria’s franchise market is still mostly unexplored and untapped

By Miroslava Marinova, research analyst at FRANdata.

A very good article, containing some of the most interesting topics about franchising in Bulgaria.

Bulgaria – Franchising

Please, note this link goes to a .doc file (Doc type of Microsoft Word)

US Commercial Service

In this short but good article we can find the most well-known brands and the best developing sectors concerning franchises.

BULFA - Current site

And last, but not least, the current website of Bulfa. Last year they organized a seminar (”Franchising days in Bulgaria”) and they are preparing an event for the next september. Currently, the website needs a lot of work in order to improve the information availability, but it is an interesting site. We hope they start updating more frequently.

So, that’s all by the moment. We hope to be able to find more information for you in the future, and if someone of you is interested in sending us more data we would share with the rest of the people.

Our business consists in reaching the most of people with the biggest amount of relevant information, we are not interested in hiding nothing!

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The arrival of Starbucks

 

 

 

Yes, we know! Starbucks is not really a franchise (little mistake made by Sofia Echo), but it is a very important player in the coffeehouses sector. So, we should talk about it!

Here you can find the original article: http://www.sofiaecho.com/article/starbucks-opens-first-bulgarian-coffee-shop-in-november/id_32486/catid_67

 

Franchises in Bulgaria: the report

Here you can find the most complete documentation about franchising in Bulgaria. 

• The first franchises appeared in Bulgaria in the 70s, but was in the mid-90s when the industry began to develop more strongly.
• Today, franchising is becoming the trend in some sectors, such as in the real estate agencies.
• In many sectors are already present major franchises (or chains that do not use franchise) international, which has not avoid the continued existence of some fairly strong local franchises.
• Despite the above, a large portion of the population is still unaware of this system, in part because of the limited information available.
• The franchising information is scarce and is highly fragmented. The data offered by the Bulgarian Association of Franchises (BULFA) are not very up-to-date and there is an Internet portal or a magazine specializing in the style of other countries that combine a reliable register of the master franchise available in the country.
• BULFA is undertaking initiatives in this direction, but there are still significant efforts to   do, therefore, there is a market for niche publications, consulting firms and Internet portals interested in getting a development of the franchise save to a level closest to that of other European countries.
• A large part of the master franchise is in the hands of Greek companies.
• The attraction of Bulgaria has increased a lot with its entry into the European Union, which attracted more investment and franchising. In the next few years will continue installing important chains of the most renowned brands.

First Part: Coffeehouses

 

Second Part: Fast Food

 

Third Part: Commerce

 

Fourth Part: Services

M-Tel starts its franchise program

 

 

 

 

 

As we can read in Sofia Echo (quoting Dnevnik), M-Tel is ready to start its own franchise program. You can access to the M-Tel website clicking in the image above.

 

Here is the original article:

http://www.sofiaecho.com/article/wireless-operator-mobiltel-hunts-for-franchise-shops/id_31910/catid_67

 

 

 

Retail in Bulgaria

Retail in Bulgaria

As a first overview at the number of stores and the industry in which they operate. The latest figures on retail trade who supplied the National Statistical Institute (NSI) correspond to 2006. According to their data, the distribution in stores would be as follows:

Non durable goods	Year 2006	%
Non-specialized stores	32.215	77,00%
Bakery	2.338	5,60%
Sweets shops	2.037	4,90%
Vegetables	1.955	4,70%
Beverages	1.839	4,40%
Butcher shop	1.079	2,60%
Fish shops	394	0,90%
Total	41.857	100,00%

Source: National Statistics Institute of Bulgaria. http://www.nsi.bg

The non-durable goods shops are mainly non-specialist shop, which usually have a small selection of the most typical products such as fruits, vegetables, canned products, oil, sugar, etc. The concept of neighborhood store, small and with a broad timetable, is widespread in the country.

Fuente: Instituto Nacional de Estadística de Bulgaria. http://www.nsi.bg

In the consumption of durable goods shops, the most numerous are the clothing stores, followed in importance by non-specialized stores and pharmacies. According to data from the National Institute of Statistics, in the period 2005-2006 more products that have increased their sales have been those related to the automobile sector, telecommunications, televisions and radios, computers optimal, computers and household appliances.

Franchising in Bulgaria: The Guide

In this section you will find “Franching in Bulgaria: the Guide”, a complete review about the franchises present in Bulgaria, ordered by industry.

 

Image: Jepoirrier

Bulgarian economy

 

 

 

A conservative fiscal policy, structural reforms and pegging the national currency (leva) to the euro have created a stable macroeconomic and policy framework during the last decade and brought about the country’s entry into the European Union on January 1, 2007 which has been assumed as a major push to the country.

 

The country offers attractive incentives for foreign investment: the corporate tax rate is 10% and income tax is the lowest in Europe, also 10%.

 

One of the negative aspects that need to be highlighted is the country’s unreliability of its judicial system, as well as high levels of corruption, which have been criticized on several occasions from the World Bank and the European Union.

 

 The growth of the Bulgarian economy has been strong and steady since 1997, and exceeding 4.5% since 2000. In 2007 was 6.3%, and in the first half of 2008 reached 7%, driven by consumption and gross capital formation. This growth has led to an intense reduction of unemployment from 18% in 2000 to 6.0% recorded in July 2008, while inflationary pressures have been accentuated by exogenous factors such as price hikes of energy and droughts. In fact, inflation in July 2008 was the second highest in the European Union, only surpassed by Latvia: 14.5%.

 

Consequently, the country has increased its demand for foreign products while exports have grown at more modest rates resulting in a growing trade deficit, which in 2007 was 21.5% of GDP. So far this decade trade deficits have been compensated by the large foreign investment, which in 2007 surpassed the 6,000 million euros (represented a 21.1% of GDP, thereby covering 98.5% of the current account deficit). However, 2008 data are indicating a significant decline, but we should wait until the first months of 2009 to ascertain the true scope of the fall in investment.

In the following table we can observe the main macroeconomic data and its evolution in the last years:

 

MAIN ECONOMIC INDICATORS	2005	2006	2007	2008*
GDP
(%)	5,3	6,6	6,3	7,0
CONSUMER PRICES
Year base  (%)	5	7,3	8,4	15,0
End of period  (%)	6,5	6,5	12,5	14,5
INTEREST RATE
Year average  (%)	2,0	2,7	3,9	5,2
UNEMPLOYMENT RATE
Population (x 1.000 habitants)	7.719	7.679	n.d.	n.d.
% Unemployment vs Employment	10,7	9,1	6,9	6,0
DIRECT FOREING INVESTMENT
M€	3.152,1	5.961	6.108,9	2.078,6
CURRENCY AND EXCHANGE RATE
Currency: Leva. Fixed Exchange Rate: 1,95 levas = 1 euro.

Source: Bulgarian Nacional Bank (BNB) (http://www.bnb.bg); Nacional Statictics Institute (NSI) (http://www.nsi.bg)

* GDP from Q1. Inflaction from July 2008. Interest rate: September 2008. Unemployment: July 2008.

Direct Foreign Investment: July 2008.

Recently, the country is experiencing a phase of strong growth that is accelerating its process of real convergence with other EU members, while presenting serious imbalances in the figures for inflation and the external sector. The income level of Bulgaria is far below that of its European partners. GDP per capita in 2007 was 3,800 euros and forecasts for 2008 are to reach the 4,300 euros. In purchasing power parity, GDP per capita of Bulgaria in 2007 was 38.3% of the European Union average of 27, according to data from Eurostat.

Below is a table which lists the areas of origin of the components of GDP and spending.

  

	2004 %	2005 %	2006 %	2007 %
SECTORS
AGRICULTURE	9,2	7,8	7	5,1
INDUSTRY (ENERGY INCLUDED)	20,3	19,7	19,7	19,8
CONSTRUCTION	4,1	4,5	5,5	6,7
TRADE, HOTELS, RESTAURANTS, TRANSPORT AND COMUNICATIONS	19,5	20	19,5	20
FINANCE AND REAL STATE	16,8	17,4	17,6	18,1
OTHER SERVICES	13,7	12,9	12,5	12,4
ADJUSTMENTS (TAXES SUBTRACT SUBSIDIES)	16,4	17,7	18,2	17,9
TOTAL	100	100	100	100
EXPENDITURE
CONSUMO	87,8	88,2	87	85,3
Private Expenditure	69,3	70,2	70,4	69,1
Public Expenditure	18,4	18	16,6	16,2
GROSS CAPITAL FORMATION	23,1	28,0	31,8	36,8
Gross fixed capital formation	20,5	24,2	26	29,8
Stocks variation	2,6	3,8	5,8	7
EXPORTS	57	60,2	64,5	63,4
IMPORTS	68,5	76,4	83,3	85,5

Source: Nacional Statistics Institute (NSI) (http://www.nsi.bg).

As you can see, the sector is the most relevant for franchising is: transports, hotels, food trade and leisure represent great opportunities for franchising.

 

It is also a huge development of the property sector, where the franchise system is playing an important role in the expansion of large networks of estate agents.

Government forecasts put growth at the end of 2008 by 6.3%, while The Economist foresees growth of 6.1% for 2008 and 6.2% in the next two years and the IMF lies in this variable 5.5% in 2008 and 4.8% in 2009.

 

Bulgaria is a country that presents many opportunities and with a long way to follow in which the franchise could play an important role, given the need for management models of success, adding high value and to helping to replace or improve the lack of skilled human capital that is beginning to be felt in the country.[/lang_en]

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