The share of foreign franchises in Russia slipped to 8 percent by the end of 2023, marking the lowest level in 14 years of available statistics dating back to 2010. This figure was communicated to socialbites.ca by Tochka Bank officials.
At the same time, the presence of Russian franchisors continued to grow. Analysts note that domestic firms accounted for around 92 percent of franchise sales last year, underscoring the strengthening position of homegrown brands as foreign entrants exit or scale back their activities.
According to Maxim Frolov, head of the Tochka franchise department, the expansion of the franchising market in the Russian Federation, despite fewer foreign participants, signals economic resilience. He explains that rising import substitution across diverse sectors creates favorable conditions for local brands to flourish, opening new avenues for entrepreneurs and investors. The trend suggests a self-sustaining market where domestic innovation and local networks drive growth rather than external capital alone.
In 2023, 637 new trademarks were registered, and 239 of these successfully sold at least one franchise during the year. This demonstrates a tangible momentum in the domestic franchising landscape, with a notable share of new brands moving from registration to active franchise development within a single year. Market observers interpret these numbers as evidence of a robust pipeline for expansion that could reduce reliance on foreign models and spur localized business ecosystems.
Analysts also note a broader behavioral shift among Russian residents who increasingly view franchising as a viable alternative to traditional bank deposits. The franchise model offers potential for returns tied to local demand and faster capital turnover, which can be particularly attractive in an environment where savings options may yield modest interest. This willingness to embrace franchising as a vehicle for wealth-building highlights a preference for tangible business ownership and hands-on management, rather than passive saving.
Historically, some economists have challenged the perceived necessity of foreign investment for Russia’s development. The current data on franchising adds nuance to that debate, illustrating how domestic entrepreneurs are leveraging franchises to build brands, create jobs, and contribute to regional economies even as foreign participation contracts. The evolving landscape points to a strategic emphasis on homegrown capabilities and a diversified approach to growth that aligns with broader economic goals for substitution and resilience. These shifts are attained through coordinated support across local financial institutions, regulatory adjustments, and targeted market opportunities that favor home brands over imported ones. This evolving narrative reflects a gradual rebalancing in which domestic franchisors assume a more prominent role in the market, while foreign players recalibrate their strategies in response to changing conditions.