The Turkish Franchise market

The Balkan Market

• The last decades several companies that operate in Greece and other EU countries expand their business to the Turkish market. Turkey though has its own specific characteristics and there are special factors that have to be taken into consideration for successful development. According to your expertise, which are the characteristics of your country’s market that international franchises should focus the most, in order to expand their business successfully?

As having a growth rate of 8,9% in 2010 and 8,8% in the first half of 2011, Turkey, has the second biggest expansion capacity after China in the world. Therefore, Turkey is a trade platform that international brands mostly prefer to invest in.

Especially in the last decades, international companies perceive Turkey as headquarters of Middle East and Asia market.  This is because Turkey has a special geographical position and close relationships with the region countries.

Besides, Turkey is becoming a center of attraction because of both its’ developed domestic market and providing easy access to nearby countries’ market with having profitable logistics terms.  Unlike most of the neighboring countries, Turkey has a stable politic atmosphere which is charming the international franchise chains. Further, the cultural kinship between Turkey and the Balkan countries provides an easy adaptation process. 

Turkey has a 72 million population with an average age of 39,4 and per capita income level of 10.072 USD. This qualified young population obtains a good quality of labor force. Thus, the foreign companies which desire to penetrate into the Turkish market don’t face a lack of qualified personnel while they are establishing their franchise chain in Turkey.  Furthermore, notably after 80’s, changing and developing consumer profile and increasing purchasing power of our country, catch the attention of foreign companies in the franchise system. 

Not only as being the unique Non-European Union country where the European Customs Union tariffs are being applied, but also with its’ lower corporation income taxes, Turkey draws attention of the European investors. These characteristics prepare a beneficial investment climate in Turkey.

The Balkan franchise chains which desire to invest in Turkey should estimate these special factors and particularly take the advantage of cultural and geographical kinship advantage. 

• Which international concepts operate in Turkey and which are the factors, according to your opinion that attract them? Which factors will lead them to success in terms of entering in the market and developing in it?

Actually many international concepts can easily operate in Turkey. Especially fast-food and ready wear concepts are increasing their numbers in the last decades. Also coffee concepts are spreading rapidly. Besides, in last years, international real estate firms prefer Turkish market for expansion.  Surely, all the firms from all sectors should come up with the powerful competition in our domestic market, in order to be successful in Turkey. 

• Which business sector is most developed? How many brands operate in it? (if the number is possible to be given)

Particularly, food and service sectors take the lead in Turkish franchise system. Especially numerous fast-food concepts in food sector are keenly competing with each other.

Franchising in Turkey

• Is franchising developed enough? Do investors invest on franchising?

The franchise system, which came in the 80’s to Turkey together with the fast food chains as Mc Donald’s, Pizza Hut and Wendy’s, developed very fast since then. The increasing interest in the “Be My Dealer? Franchising & Brand Dealership Trade Fair” of entrepreneurs and company owners is another proof of the developing system.

• Which is the legal framework for franchising?

The first years the legal regulations of franchising in Turkey were conducted with the existing laws and started to executed more efficiently after realizing the necessary harmonization of legislation within the meaning of the European Customs Union and passing the ordinance of “Protecting the Competition” on the 13.12.1994 and according to this rule passing the ordinance of “Manifesto of Group Dispensation related to Franchise Agreements”.

UFRAD, the Turkish Franchise Association which is gathering the developing companies by the Franchise system under one roof in Turkey, supports as well in legal matters the entrepreneurs who wants to be a part of the system. 

• Which franchise concepts of your country operate already abroad or have the potentialities to do so?

Particularly concepts special to the Turkish culture are fronted with interest as well abroad. For instance “simit, manti, kumpir, döner, kebap and raw meatball companies expanding the Turkish taste to the whole world by opening new branches abroad. Furthermore some ready wear, jewelry and accessory companies expanding their business and contribute to the presentation of figures from the Turkish culture on the international platform.

• Which is the profile of the candidate franchisees in your country?

The franchisee candidates in Turkey usually are young entrepreneurs who owned the capital from the family or pensioners who saved their money and want to invest it in new business. Mostly educated people with capital who knows very well what they want and knows the advantages of the franchise prefer this system.

• Are the franchisees keen on Greek franchises?

Yes, they are. Actually many concepts from Europe are in demand in Turkey. The close cultural relationship of Greece and Turkey contribute to an easier development of the franchise business between both countries – e.g. MODECO, Greek furniture brand which this year participated in the Be My Dealer? Trade fair established important business relations and was very satisfied with the event. Furthermore CHOCOLOGO, a chocolate company originated from Greek, was last year among the participants and entered in the Turkish market by giving master franchise. These positive portraits show us the importance of Turkish – Greece franchise relations.

• Which franchise concepts/ sectors are the most popular in your country?

Food, ready wear, real estate, cafe, restaurant, jewelry-accessory, cosmetics, dry cleaning, vehicle cleaning, technology markets, service sectors are the most popular franchise concepts.

• Which is the greatest problem and the greatest opportunity of franchising development in your country?

Turkey is a very fast developing country. It is, therefore, one of the countries which has the most rapid and growing potential of the franchise concept. Especially the provided advantages in Turkey accelerate the development of the concept and are the reason why international companies prefer intensively Turkey. Even the number of law offices and consultant companies specialized in franchising is increasing day after day.