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New book on franchising for entrepreneurs of Uzbekistan
[December 26, 2008]

New book on franchising for entrepreneurs of Uzbekistan

TASHKENT, Dec 24, 2008 (Asia Pulse Data Source via COMTEX) --
The majority of people who have ever heard of franchising typically associate it with the McDonald's fast food chain of restaurants. In reality, franchising is an effective organizational form for expanding successful business models and is quite widespread in the most diverse segments of economy.

The main idea of franchising is in replication of a successfully operating business, i.e. in purchasing the license to render the products, use the techniques, and trademarks of an existing business that has proved successful in practice. A franchiser grants the franchisee the right to use its name, logo, experience, knowledge, as well as production technology and management system. At the same tie, the franchiser is typically obligated to provide assistance in the launching of the business, and render technical and consulting assistance.

World practice shows that the majority of new small businesses close down within the first two years, whereas eight out of ten companies set up through franchising scheme continue to operate successfully even in five years after the opening.

In Uzbekistan this scheme of business development is rather limited in scale. Among the most known and successfully operating franchising chains in the country are Bek restaurants, and Paynet payment system. But judging by the international experience, we can claim that the industry-specific orientation of franchising is absolutely unrestricted.

This model of business organization is successfully applied in sale of brand products (from cosmetics to automobiles), in rendering of services to population and businesses (from petrol stations to insurance), and in production by original technology. That is why national producers yet have to discover the advantages of this new model of business organization franchising.

Franchising is licensing a different entrepreneur to use the trademark and/or company technology. There are two parties to a franchising agreement. The party that owns the right for the trademark or technology is the franchiser. And the party that purchases the possibility to use the right to replicate the product (trademark, technology) is referred to as franchisee. The package of rights that the franchiser sells is called a franchise.

According to the legislation of Uzbekistan the parties to a franchising agreement may only be commercial organisations and citizens registered as entrepreneurs.

Within the frames of the project of the Chamber of Commerce and Industry of the Republic of Uzbekistan and the UN Development Programme on the "Business Forum of Uzbekistan" a new manual titled "A guide to franchising for entrepreneurs of Uzbekistan" has been published for the business entities of the country.

According to the authors, the main idea behind the publication of this book is familiarization of the entrepreneurs with the specific features of operating a franchising model of business in Uzbekistan, and to provide specific recommendations for the active and potential parties to a franchising agreement.

This manual is the first business publication in Uzbekistan devoted to the subject of franchising. It covers the issues concerning the organization of business according to a franchising scheme in Uzbekistan, the legal and financial aspects of franchising, the features of agreeing on the terms of a franchising package, assurance of the quality of the product (services) produced, etc.

For the readers who having read the manual decide to apply the newly gained knowledge in practice, the manual provides some practical tips on successful operation of franchising business model.

The publishers of the manual hope that it will serve as an impulse for the development of franchising business in Uzbekistan and will become a good instrument to expand successful entrepreneurial projects.

The publishers are not restricting themselves to the publication of this single manual, but also plan to provide expert and technical assistance through a number of pilot projects with the application of franchising mechanism in Uzbekistan.

The manual was published in Russian and Uzbek languages thanks to the sponsorship support of the UNDP extended as a part of the Business Forum of Uzbekistan Project and is circulated free of charge through the Chamber of Commerce and Industry of Uzbekistan and its structural subdivisions.

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