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Turkey's Domestic Brands Target Global Market Through Franchising

30 Aug 2017 - As a proven nest of global chain brands with a vast population and good economic outlook, Turkey has been exporting its brands around the world, from food to furniture and textiles, through the system of franchising

urkey has been a significant attraction center for global brands who want to expand their businesses via franchising predominantly in textiles, fast-food and coffee houses. With its growing population and strong economic performance, the country has managed to draw more than $180 billion in foreign direct investment (FDI) over the last 15 years, a certain portion of which came from growing global franchise brands. For instance, major U.S. franchises have been active particularly in fast-food businesses and coffee houses. For instance, opening the first restaurant in Turkey in 1995, the U.S.-based fast food chain Burger King now has almost 600 restaurants across Turkey. Another fast-food giant, McDonald's has approximately 200 restaurants in the country. While no specific number has been determined, the coffee chain Starbucks is estimated to have more than 350 branches across Turkey as most of the districts in major cities have at least one store from the global coffee chain.

A proven home of global franchising, Turkey has been operating its own national franchises around the world for a while. According to data provided by the Turkish Franchise Association (UFRAD), the number of chain businesses in the country has reached 2,500, with around 60,000 branches and more than 150 Turkish brands having opened branches in different parts of the world.

UFRAD Chairman Mustafa Aydın told Anadolu Agency (AA) that franchising has been a very widely used method of entrepreneurship both in Turkey and around the globe. The volume of the franchising sector was recorded at $43 billion last year and is expected to reach $50 billion by the end of this year.

Stating that these brands meet national and international standards and quality standards through the franchising system, Aydın said that 30 percent of the domestic franchising market consists of foreign brands. Moreover, he noted that more than 150 Turkish brands have started to open branches abroad.

"Franchising enables investors to create equal opportunity by capitalizing on the experience and knowledge accumulated in endeavors to establish a corporate structure," Aydın noted, highlighting that maintaining equal opportunity and creating jobs to boost employment have positively contributed to the growing trend of the economy. Therefore, he emphasizes, this system provides a crucial solution to the problem of unemployment. The development of franchising, he said, offers job opportunities from top managers to blue-collar workers.

One of the most important advantages of franchising is the advantage it offers business people, who can promote their brands not only in the domestic market but also abroad, ultimately bringing foreign currency to the country.

Mustafa Aydın noted that while the food sector appears to be more advantageous in the system, there are brands in every sector that can compete with world leaders, adding that with the right management and franchising system, the companies operating in every field have the potential to be successful candidates in the world markets.

Indicating that the turmoil and economic crises experienced in the global markets have not affected the Turkish franchising industry to a large extent, Aydın stated that an inverse proportion of growth is seen in the franchise sector in crisis situations.

Aydın said that 2016 was a good year for the brands and franchising sector and that even though 2017 has made a good start, necessary measures are being taken with regards to the fact that investment stagnation in general markets may cause a slowdown in the sector as well.

"In order for the franchise system to be successful, the quality standards must be kept high and the operation or control mechanism must be used very effectively," Aydın said.

"Franchising will also show its potential for becoming a rapidly growing sector all over the world as the most effective business method in our country in the coming years, as well."

Pointing out that the system provides brands with continuous customers and business opportunities provided by well-known brands and that the business given to the franchisee also prov ides training services and specialized personnel support for entrepreneurs who take the franchisee, Aydın said the franchising system reduces the risk of setting up one's own business by removing the entrepreneur's loneliness.

Major Turkish brands around the world

Starting operations in 2002, Turkish bagel chain Simit Sarayı currently has 65 branches in 14 countries, from the U.S. to Saudi Arabia, where the brand has recently opened its 34th store.

Recently starting trading on the Borsa Istanbul stock exchange (BIST 100), Turkey's benchmark index with the biggest public offering of the last few years with around $1 billion, Turkish textile retailer Mavi Jeans was founded in 1991 and has a market presence in the U.S., Canada, Germany, Australia, Russia and the Netherlands.

The company has flagship stores in New York, Vancouver, Berlin and Frankfurt. The Turkish firm has more than 390 stores and is available at 5,000 different locations in 50 countries.

Major Turkish furniture brand Doğtaş Mobilya, founded 44 years ago, conducts operations in Europe, the Middle East and Central Asia. The brand has 29 stores in Saudi Arabia, Jordan, Austria, Switzerland, Kazakhstan and many other countries worldwide.

Becoming phenomenon with its salt-bae gesture, Turkish steakhouse brand Nusr-et, which started in the fancy Istanbul neighborhood of Etiler, is also spreading across major cities around the globe. Opening its Dubai restaurant in 2015 and its Abu Dhabi restaurant early this year, the famous "salt chef" is planning to open branches in New York, London and Doha, as well. Meanwhile, he will play a small role in the third season of Narcos, the American crime drama featuring the life of drug cartel Pablo Escobar in episodes set to air next week.


Daily Sabah Business

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