Franchising  in Kazakhstan. (According to the book of Beknur Kissikov: "Franchising in Kazakhstan", Book in East, 2007)In Kazakhstan franchise turnover for 2007 is 500 million dollars a year. Kazakhstan is the leader in Central Asia in franchising market. There is a special law on the franchising of 2002, there are about 150 franchise systems and franchises more than 1000 points.

Kazakhstan franchise begins with the emergence of a factory "Coca-Cola", open to sublicense Turkish licensor same brand. The plant was built in 1994, thus marked the beginning of the so-called. "Qualitative presence of" foreign company in the form of the opening of its production in the country.  Thus, the famous producer of beverage products are available not only in the form of import trite, but in the form of national product, which is involved in the creation of local employment .

In 1994, appears first in Kazakhstan and Central Asia 5 - star hotel of international class. This hotel "Rahat Palace", which later became part of an international hotel chain brand franchise "Hayatt Regency".

In mid-90 - x it has been several cases of Kazakh companies selling their brands to third parties in form, resembling the classic franchise.  But because of the lack of accurate information and non-public nature of transactions difficult to call these cases examples of franchising.

Since mid-90 - ies, many branded stores / fashion boutiques opened international producers in the country for franchising system.  For example, it may be noted corporate store "Adidas", appeared in Kazakhstan in the second half 90 - ies.

Elements of franchising apparently attended in a scheme marketing company "Seymar" at the end of 90 - ies of the last century.  Outlets company in the form of stalls and avtolavok were processed on a single corporate design, with the obligatory presence of a visual logo and brand name companies. Tenant outlets were independent businessmen who acted as dealers, franchisees and the parent company.

In December 1999, opens its doors hotel "Ankara", the franchisee now known hotel chain InterContinental.  In the same year, appears first Ramstore shopping complex, subsequently built a network of hypermarkets.

 Since 2000 starts to work Baskin Robbins's  ice-cream shop  in Kazakhstan.

2002-nd year has been fruitful for the development of franchising in Kazakhstan. Immediately several events, significant for the development of domestic franchise, taking place in this year:

1. Published  franchising law. Thus franchise is governed not only Chapter 45 Civil Code, but also a special law.

2. A National Franchising Association of Kazakhstan (KAF) - Specialized Institute for Development of franchising. But at the moment KAF doesn't show any serious activity in franchising area.  

3. Has been launched USAID franchising program.  The goal is to build a purely Kazakh franchise brands. The programme organized a series of free seminars on franchising, distributed free textbooks on the topic, formed national franchises.  Also, according to the program is organized by the visit of Vice-President of IFA in Kazakhstan, whose purpose is to facilitate increased business contacts between U.S. and Kazakh franchise enterprises . The result of programme  is the emergence of a number of domestic franchise companies. The programme also raises awareness about Kazakhstan's franchising business, which contributes to promote franchising forms of relations.

In 2005, in Almaty hosts the first exhibition of franchising.

Franchise firmly embedded in the Kazakh part of the business, becomes indispensable attribute the development of many companies. In local mass media  appear dozen materials, covering the kazakhstan franchising sector. Greater interest in the commercial sector and financial sector. There are a number of companies whose activities consist of franchise brokerage, which is a measure of the profitability of the sector.

 Franchising has been supported and at the state level. Has been launched franchising program with funding the Small Enterprise Development Fund (FRMP). In many regions of  Kazakhstan  held Franchising seminars and conferences  organized by Ministry of Trade of Kazakhstan and regional business associations.  Measures of state support franchising prescribed in many programmes on entrepreneurship development.

 In the period 2003 - 2007 the number of franchise systems in the country has grown nearly 2.5 times. The average annual turnover of franchising has grown to more than three times. The number of jobs created precisely franchising companies, the diversity picture sector.

Franchise statistics are  very approximate, because no single point of registration franchise in the country and not every company announces its activities as a franchise.  There is procedure to  registere franchising contract in the Ministry of Justice, but not all companies follow this practice. Only a few countries in the world are  accurate with statistics of franchising.  For example in the U.S  every franchise case registered at the federal or regional level.

According to a rough figures there are about 120 franchise systems and franchisees 1000 points. The number of employed workers in the sector is about 14 000 people in 2007. It's quite impressive figure on the scale of the country's population. In connection with the capacity of local  market, it is very difficult to assess an annual turnover of franchising. But an approximate figure annual turnover in the sector varies franchise in the area 500 million dollars.

. Kazakhstani   franchising statistic is  very dynamic. The rapid growth of the economy, increasing the share of SMEs in the country's GDP, increasing demand for advanced technology businesses, the relative unfilled niche franchise, as well as several other factors can be predictive of a multiplication of statistical data sector in the near future.

One can not but draw attention to some negative factors hampering the development of franchising in the country:

 1.Lackness of  state privileges and preferences for  franchising sector.

2 Weak  intellectual property protection.

3.Low  entrepreneurs access to the so-called "long money".

4. Non-transparency of domestic business..

5. Weak awareness of franchising as a lucrative form of business relations.

6. Giant  growth in real estate prices over the period 2000-2007 year as a result of the huge influx of money. High real estate prices make unprofitable franchise opening point, which is a significant barrier to development of franchising in general.

 The country had accumulated a huge money supply. But there are no facilities for investment.  Poor stock market prevents people use this resource as a source of investment. As a result, investment is mainly made in real estate, that provokes inflation.

At the same time, business and franchise in particular, are very common in the world of investment.  As the experience of the West, successful entrepreneurs can be anyone: from housewives to retirees.  And franchising as a less risky method of doing business is ideal for neofits of  business (according to the Chamber of Commerce USA 97% franchise businesses open over the past 5 years, continued to operate successfully in the future, while 62% nefranchayzingovyh businesses closed during the same period ).

But in Kazakhstan is still insufficient level of awareness, inadequate involvement of inactive population in entrepreneurial activity. The proportion of employed people in the business world compared with the statistically very low ( "self-population" does not relate to official business).  This suggests the need for improved infrastructure to support the start-up businesses.

The market share of Kazakhstan's foreign franchises prevails.  But lately emerged a number of domestic companies that are actively being developed through a system of franchising. Undoubtedly, a great role in the development of franchising will play a neighborhood with China, which is very difficult to compete in production costs.  Only companies with original and unique goods and services can be competitive in such circumstances.

If we consider the types of franchising in Kazakhstan, the country most represented trade franchise, while in western countries, the percentage of business format traditionally higher proportion of sales.

Another feature of the market franchise in Kazakhstan - sublicense orientation . International franchisers  no hurry to work directly in Kazakhstan. Very few direct classical relations: franchiser-franchisee. International franchisers  prefer to work in Kazakhstan, through its Russian or Turkish master franchisee (subfranchisers), Kazakh companies in turn serve as subfranchisee (sub-licensee).  The reasons for this situation in the sector very much. Perhaps the single language mentality of local consumers with the Russian (foreign franchise does not require adaptation), population density and inadequate market, inactive local entrepreneurs in the international market franchise, etc.

 But Kazakhstan could become a gateway for entering the markets of Central Asia for foreign franchayzerov. And a big role in that can play domestic entrepreneurs.

 It may be noted another feature of franchising  market in the country. Very few cases of in-migration of franchising. No links between big business and small businesses.  Large companies prefer to form regional development branch, but not franchising system.

In a world wide spread as a corporate or public franachising.  Large public or private companies pass through a system of franchising technology and methods of doing business small and medium-sized businesses - the franchisee.  An example of the potential state of franchising in Kazakhstan will probably announce in the media access to the Internet program national operator Kazakhtelecom, in which entrepreneurs are able to lease the broadband Internet traffic from the country largest monopolist .