Franchising in Kazakstan and Kyrgyzstan : final report

Using franchising as an enterprise development strategy over a 5-month period, the project converted six enterprises in Almaty and Bishkek into franchise formats, and set the stage for the creation of 50-60 private enterprises over the next 3 years. The project had three basic components: creating franchises, developing the legal/regulatory framework, and building capacity and awareness. All three were implemented simultaneously. Extensive collaboration with earlier projects and local teams accelerated implementation considerably. The franchise concept succeeded in both countries, and performance targets were exceeded. For example, six (vs. 4-5 targeted) enterprises were evaluated, analyzed, and provided a full franchise package, covering financial controls, accounting, marketing, training, management, and operations. All six are implementing western style management and accounting practices, and five are poised to develop a network of small, independently owned enterprises operating under their licenses. One of the six has already recruited a franchisee and concluded a franchise agreement. Similar outcomes were achieved in the legal/regulatory arena and the training of local professionals and institutions. Based on the project"s recommendations, it is now unlikely that new proposed legislation will inhibit the development of franchising. Regarding training, the project focused on hands-on, practical application of franchise principles and succeeded in training at least 16 local consultants, several legal professionals, and about a dozen educators and trainers. Five lessons were learned. (1) Franchising can succeed and expand despite a difficult business environment. (2) Franchising had unanticipated results that exceeded expectations. (3) Project coordination efforts were highly effective. (4) There is questionable utility in demonstrating a model is successful if resources are not available to exploit that success. (5) There is a high demand among entrepreneurs for this kind of practical assistance. (Author abstract, modified)