Franchising is an easier way to open a business because it will be easier to reach the target audience once the name of the business is known in the market and especially by customers. How much money do you need and what are the profitable areas to invest in 2022, Raluca Voicu, managing partner of Franchise, a franchise consulting platform, told us.
“As in any business, in franchising, you have to be the right man in the right place. Franchising is the same, you start from what you like to do and then you analyze how the market is going, what are the business models and areas you can invest in, with what level of involvement and financial return. The offer on the market is vast, but it is good to seek guidance in selecting the right franchise because it is a long-term decision,” said Raluca Voicu, managing partner Franchise.
According to her, the most profitable areas to invest in 2022 are services and HoReCA, but only on unique products that also deliver the customer experience area and are also suitable for the delivery area. But profitability is not just about the industry. Entrepreneurs should also pay attention to the direct operating costs of the business and their percentage of turnover, as well as the management and growth potential.
How much money do you need to open a franchise: from €25,000 to €100,000
Franchise representatives are of the opinion that an entrepreneur can open a franchise with an investment starting from 25,000-30,000 euros and you can exceed 100,000 euros when talking about businesses that involve logistics and opening equipment.
There is an opening for franchisors to find financing for franchisees willing to get involved in the management of the business, either through equipment leases and financing loans, to complement the franchisee’s investment and not to replace it entirely.
Although they seem somewhat more affordable because some franchises don’t require a huge amount of money, this business is not for everyone. Before deciding to open a business in this direction, Franchise representatives recommend studying two or three franchises in detail when the entrepreneur has chosen the main field of activity.
The next step is to consult with a specialist who knows the market and franchises in Romania very well and can support the entrepreneur in the process of selecting the right franchise.
Franchises to invest in 2022:
HoReCa – Maison des Crepes, Uncle John or Velocita
Lately, single-product-focused businesses have accelerated, offering customers uniqueness and experience, and growing mainly through street locations.
Romanian entrepreneurs can invest between €25,000 and over €100,000 to open a Maison des Crepes restaurant selling sweet and savory pancakes, a Velocita location, a brand known for its artisanal ice cream in Bucharest, or a single-product quick service restaurant such as Uncle John (burgers) or a pizzeria (Joy Pizza) focused exclusively on delivery.
“The HoReCa sector is an easily franchisable market, there is growing interest in businesses that sell simple, easy-to-sell products in commercially minded spaces and there is potential for businesses built around a community,” Franchise representatives say.
Services – Code School, 5 a sec or Biotiful
From education to the entertainment area, with investments starting from €20,000 to over €400,000, entrepreneurs can invest in a children’s programming franchise (Code School) or a play and entertainment place where children socialize and learn, such as Kiddo Play Academy.
Franchises with a business model in the education industry will grow rapidly in the post-pandemic context, says Raluca Voicu.
“Also in this area, textile cleaning services (the 5 a sec network has also developed its home&delivery service) and beauty services have accelerated (the Biotiful beauty studio has continued to provide premium services in the beauty area, using non-toxic products, and has grown in 2021, exceeding annual turnover of 750,000 euros),” says the company representative.
As for the niche retail category, entrepreneurs can look to businesses such as Feydom, the international retail chain selling custom-made, modular sofas, which has continued its expansion in Bucharest and nationally.
The business requires an investment of €25,000-30,000, with the franchisor developing a flexible model without locking the franchisee’s money into stock, and delivering to order.
“When we talk about business opportunities that are not present in Romania, companies that look at the local market, dedicated to experienced entrepreneurs who have the expertise and infrastructure to develop a master franchise (a nationwide business, with exclusivity for Romania), we are still talking about the niche HoReCa sector: the Asians from Yole (an international retail and distribution network that sells frozen yogurt and artisanal, sugar-free ice cream) are in talks to enter Romania and develop their retail and distribution network,” she says.