Franchising is a modern and very convenient form of relationships among businessmen. The finished model greatly contributes to the implementation of any idea.
The Pyaterochka franchise has long earned particular popularity. This supermarket chain is a Russian brand of X5 Retail Group.
Formation of the range of each outletis carried out depending on the daily demand of the buyer, whose place of residence is nearby. The target group is a person with an average income, so each supermarket tries to keep prices low. Attracting additional buyers is made through the establishment of discounts on a certain group of goods or holding shares for a certain period of time.
The history of the development of supermarkets "Pyaterochka"
Opening of the first supermarket "Pyaterochka" occurredin 1999 in St. Petersburg. At that time, the LEK company was developing very rapidly - it took only half a year to conquer the Moscow market and open 15 stores.
В 2002 году руководство "ЛЭК" решило попробовать another direction of business development - this is how the Pyaterochka franchise appeared. In 2005 there was a connection to the network of stores "Kopeyka", "Narodnaya kopek" and "Crossroads". At the same time, the holding's name was renamed to X5 Retail Group.
Currently, the Russian market is filledmore than 6,000 chain stores, the opening of most of which was contributed by the Pyaterochka franchise. The feedback from business customers is extremely positive, as the company’s managers provide start-up entrepreneurs with comprehensive support at all stages of development.
Return deductible. Principle of operation
The Pyaterochka franchise, which has been constantly developing since 2002, in 2009 changed its main strategy, namely, it began to adhere to commodity (reverse) franchising.
This collaboration is based on the followingprinciple: first, the franchisee and the head office of X5 Retail Group sign an agency agreement, in accordance with which a novice entrepreneur receives more than 90% of the product (the only exceptions are beverages containing alcohol) and full store management.
Sale of goods completes the implementation of the collected revenue, followed by transferring it to the account of the franchisor. The size of the agency fee is from 13 to 17% of total sales.
From the amount received, the franchisee must pay staff salaries, pay taxes, fees, utility costs, and leave funds for the maintenance of the store.
All the rest will be the personal profit of the franchisee.
Franchise cost
How much does a Pyaterochka franchise cost? 1 000 000 rubles, and the size of the initial investment is about 8 000 000 rubles.
Despite the presence of such a high input threshold, the store payback occurs within 1-2 years.
Benefits of a franchise offer
Individual entrepreneurs, independentlyopened grocery stores, often can not compete with retail chains, as they simply do not have enough resources. X5 Retail Group is known to minimize costs - a reverse franchise system. This is a business model, according to which the buyer (franchisee) receives from the seller (franchisor) the right to use a well-known trademark and unique business technologies, and lists the proceeds monthly to the account of the parent company and receives the agency fee indicated in the agency contract.
Reverse Franchise "Pyaterochka" has the following advantages:
- working with a popular brand, which in turn guarantees a quick start of a business;
- proven model of store development;
- availability of software and finished documentation;
- the turnover is fully provided by the parent company;
- full marketing support;
- conducting corporate training.
Franchise concept
The Pyaterochka store can be opened in the franchise by any representative of small and medium business. Reverse franchising requires the franchisee to consistently perform the following actions:
- The study and signing of a set of documents.
- Payment of the lump sum.
- Selection of suitable premises in accordance with the standards established by the network.
- The acquisition of the necessary technological and commercial equipment.
- Employees are hired, followed by training at the X5 Retail Group training center.
- The opening of the store, the beginning of sales.
- Personnel management, sales control and inventory accounting.
- Exact adherence to technologies transferred by the parent company, as well as unquestioning obedience to each written order of the regional director.
- Keeping the store in proper condition, regular salary payment and timely settlement with the budget.
Franchiser Responsibilities
In accordance with the chosen form of the store, the return Pyaterochka franchise can cost from 6 million rubles. and higher. In this case, the franchisor must:
- Transmit data on each business process, documentary system, brand book, as well as inform the franchisee about technologies and know-how, technological projects of the store, engineering solutions, etc.
- Install the software package and regularly update it.
- To advise the entrepreneur in the repair, construction works and the acquisition of the necessary pieces of equipment.
- Organize the supply process and ensure that only trusted suppliers or your own distribution center are allowed to cooperate.
- Provide possible assistance to ensure that alcohol products brought suppliers franchisees.
- To involve the franchisee’s store in the network’s marketing and advertising campaign.
- Monitor compliance with the terms of the franchise.
- Pay agency fees.
- Conduct a planned audit.
Requirements for the buyer
The Pyaterochka franchise allows the newly-made partner to rely not only on a stable income, but also to be sure that he will not be left in a difficult situation.
In this case, the potential buyer must meet the following basic conditions:
- Have their own or attracted investment investments.
- Own or rent a suitable retail space.
- The franchise store should be located in one of the following districts of the city: residential / sleeping / densely populated or busy place, which is characterized by high consumer traffic.
- Nearby can be located a major highway.
- Must be access roads and unloading place.
- Ensuring the possibility of pallet delivery of goods.
- Convenient parking for buyers.
- Telephone line and internet.
- Water supply, ventilation, air conditioning, sewage, security alarm, heating.
- The Pyaterochka advertising sign should be clearly visible from either side around the clock.
Requirements for premises
Estimation of profit and expenses of the selected premisesconducted by X5 Retail Group. The main factor of the whole business process depends on the location of the sales area, population of the area, number of competitors and infrastructure - how quickly the Pyaterochka franchise will pay off. Reviews in Moscow about cooperation with this network are mostly positive.
The only thing that confuses potential partners is a fairly high initial capital, because the modern market offers a lot of franchises with a much lower cost.
