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Subsidies for Franchisees in Moscow
August 16, 2019 18:42


(Source: https://www.forbes.ru/biznes)

 New measures have been introduced to support franchising in small and medium-sized businesses in Moscow. When opening a new company, franchisees will be able to receive subsidies of up to 1 million rubles, however there are some  restrictions. Experts believe that these subsidies are beneficial only to small companies.


Franchising entrepreneurs in the capital will be able to compensate up to 1 million rubles for the purchase of equipment when opening a new company. The decision to introduce subsidies, applications for which will be accepted in September and October, was approved by the Moscow government.

According to the head of the city department of entrepreneurship and innovation development Alexei Fursin, by the end of last year the number of franchisees in the capital reached 11,500. He emphasized that the demand for franchises was growing year by year, but did not specify the general fund for new subsidies for small and medium-sized businesses.

The subsidy is expected to allow companies to cover 25% of the costs of a lease of foreign equipment and 35% of domestic. By purchasing equipment at their own expense, businessmen can compensate up to a quarter of its value. In addition, franchise entrepreneurs will be reimbursed for interest on loans. A subsidy will be provided once for the opening of a new enterprise.

It follows from the resolution that companies operating on a franchise for not more than a year can receive benefits. To apply for a subsidy, annual financial statements, data on the number of employees and salaries, as well as a report on taxes paid and documents confirming the purchase of equipment are needed. According to the decision of the authorities, only entrepreneurs who work under a commercial concession agreement can apply.

Experts note that the purchase of equipment is one of the main expense items for franchisees. According to Oleg Protopopov, franchising director of Subway, for the opening of one cafe with an area of 75 square meters, a businessman needs an average of 4.5-5 million rubles. Of these, about 2 million rubles  will be spent on the purchase of equipment.  Moscow has the highest demand for Subway franchises in the country. He added that privileges and subsidies for the purchase of equipment would be a good help.

According to Protopopov, similar franchisee support programs have already been launched by authorities in other regions. However, the Subway franchisees did not have time to use them, since the subsidy fund was small. If in Moscow the fund is big enough and the government will carry out wide advertising, then the demand for franchises can grow up to 30%.  

Ernesto Gonzalez, senior vice president of Rosinter Restaurants Holding, called the subsidy of 1 million rubles significant for a small business with investments  up to 5-6 million rubles. For this reason, the support program approved in the capital will not suit those wishing to open the IL Patio restaurant, where at least 15 million rubles are needed. 

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Author: Anna Dorozhkina

Tags: Russian business Russian economy Russian companies   

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