Benefits Of Franchising System In Turkey

Benefits Of Franchising System In Turkey

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Benefits Of Franchising System In Turkey

Franchising system has lots of adventages for economic growth of Turkey such as it creates job opportunity , competition improves the domestic campanies and global campanies brings many adventages.


Franchising is one of the most important ways for global campanies and Turkey is seen as a profitablemarket for international franchisors.In Turkey , there are many franchisors in different sectors.Especially, Turkey's geographic position between Europe and Asia is a important adventage for foreign investors.Moreover , Turkey's population that has reached to 70 million people creates a vaste number of customers.To illustrate , Zorlu in his dissertation cited from F.Bilge (2000) that '' the franchising market in Turkey is going to enjoy a substantioal growth in near future because many traditional dealer networks are being transformed into franchises by large campamies''.That shows , Turkish franchising market will continue to grow.Franchising system has lots of adventages for economic growth of Turkey such as it creates job opportunity , competition improves the domestic campanies and global campanies brings many adventages.

The franchising system is one of the most successful and profitable business method in the world.This system entired Turkish market 15 years ago and it continues to grow.This system has also led to increasing working people rate in Turkey.According to National Franchise Associotion's report (1999) ''there were nearly 200 franchisors and more than 4000 franchisees in 1998 and it will continue to increase'' (p22)

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1993 36
1995 44
1996 73
1999 200
2000 300

Source:National Franchise Association

According to the table above , the number of fanchisors increased from 36 in 1993 to 200 in 1999 and then it reached 300 in 2000.That shows every year , number of franchisors increase significantly.



1993 663
1994 1011
1997 2500
1999 6000
2000 10,000

Source:National Franchise Association

According to the table above , number of franchisees rose dramatically to 6000 in 1999 from 663 in 1993 and that table shows , franchising system provides job every year to much more people in Turkey.

The franchising system also improves the working women rate in Turkey.In that system , there are so many working women and so many women owner working because the system is providing them better job condition. Women can work or manage their job easily.Most of francisees more than 4000 in Turkey are owned by women and young entrepreneurs.According to National Franchise Association's report (2000)(UFRAD) the owners of nearly 1000 franchisees are women and they aged between 30 and 40 (p.28) Us Department of Commerce (1999) stated that ''educated women who wish to break the traditional subordinate roles in business are increasingly turning to franchise operations to prove their independence and business ability'' (p.28).It is also stated that most franchisees in the apparel sector are young women with university degrees.This system increses working working women rate and provide them good jobs and that is important for Turkey.

The other adventage of Franchising system in Turkey is that competition between foreign franchisors and domestic campanies improves their goods and services.For example Arçelik is one of the most successful Turkish campany in foreign markets because this campany provides better products , services , advertising and business strategies to compite foreign franchisors so , Arçelik developed itself and opened to work market easily.Zorlu in his dissertation cited from F.Bilge (2000) that ''Arçelik is a major household elecrical products manufacturer , is recently converting its 1000 dealers into franchisees'' (p.26) .That shows , Arçelik is a successful company toward foreign franchisors and it has continued to grow.Therefore that shows , Arçelik used the right business plans to continue to grow.Against the foreign franchisors Turkish campanies doveloped themselves to compete them so , they try to improves thier products and services.

Another important adventage of competition between foreign franchisors and domestic campanies is that competition causes prices go down.These campanies also try to decrease their costs because the campanies want to sell their products or services cheaper to have more customer and to have more profit.Although prices of local campanies are cheaper and they try to use better business methods , many consumers buy foreign franchisors products but foreign franchisors also decrease their prices.According to UFRAD (2000) ''local campanies are genarelly successful in the market.However , it is also expressed that local campanies can not compete with foreign franchisors easily but that competition led to decrease the prices and it is aslo believed foreign franchisors are more preferred because they have latest technology , management and well-known brand names''(p.34).That shows ,although Turkish campanies can not compete foreign franchisors easily they continue struggle against the foreign franchisors.Competition helps Turkish market because many people can buy products which have good quality.

The other adventage of franchising system in Turkey is benefits of being a global campany.This is very important for a campany because being a global campany brings that campany an international nationaly known brand name.There are some Turkish campanies which are known in every country in the world.For example Beko , Vestel , Mavi Jeans , Zeki , Sarar ,Turkcell and Arçelik...Mavi jeans is one of the widely known Turkish campany and that campany sells its brand name to every country. Mavi jeans started to compete with international campanies in 2000 and Mavi developed suddenly although it does not accept all offers for franchising



2000 120
2003 196
2004 308
2005 500

Source:Mavi Jeans

According to table above , number of Mavi Jeans stores in outside the Turkey entired to international markets in 2000 opened 120 stores and these stores continued to grow every year and then two years age these stores reached 500 stores.that shows Mavi Jeans have internationally known brand name and it will continue to grow.

Arçelik is another international Turkish company and although it had some important economical problems it entired to international market in 2001.That helped it so , Arçelik could achieve their economical problems and it continued to grow.According to Milliyet Gazetesi (2001/08/29) ''ever year more franchisors want to sell Arçelik's products (%10-%15) so Arçelik have internationally-known brand name and last years, there are big demand for the products in the market (%20)''.That is very important for Turkish campanies to be global campany because being global campany brings it internationally brand name and provides it bigger market in the world.

Other adventage of being global campany is that Turkish campanies which sell their products abroad helps the reduce balance of trade deficit in Turkey.This is very important for Turkey because Turkey has balance deficit namely Turkey can not exporting enough according to its imports.According to Prof. Dr. Selahattin Tuncer (2003) claim that '' in 2003 Turkey's trade deficit increased %47.1 and it reached to 21.8 billion dolars and it is known that in 2001 , Turkey's trade deficit was 27.3 billion dolars and although

Turkey earned 13.2 billion dolars from tourism this is not enough to reduce balance of trade deficit in 2003''That shows , although Turkey earns money from tourism this in not enough.There are some Turkish campanies which sell their products and services in international markets so , they help to reduce balance of trade deficit like Arçelik , Mavi Jeans , Vestel and Zeki but that table shows Turkey needs more campanies to reduce that.International Turkish campanies help the decrease of trade deficit and they provide foreign currency for Turkey.
In conclution , Franchising system is a profitable and useful business activity for Turkey.This systemprovides some economic adventages for Turkey such as it creates job opportunity , competition benefits and being a global campany .That system led to increasing of working people rate and working women rate.Therefore , competition between foreign and domestic campanies improve the quality of goods ,services and decrease the prices of goods.Turkish global campanies also help decreasing of trade deficit and these campanies brings Turkey many foreign currency.Thus , Franchisors and the system will continue to grow so, more and more people can find job and the market will continue developing.For Turkish economy this is necessary and that system brings many adventages.

Zorlu ,D. (2000). Fast food franchising marketing in Turkey and the potential conflicts between franchisors

and franchisees.Unpublished master thesis.

University of Hertfordshire , London , England

Dış Ticaret Açığı.(Balance of trade deficit) (n.d). Retrieved April 24 , 2007 , from

Girişimci Bayilik. (Entrepreneur vendor) (n.d). Retrieved April 20 , 2007 from (15 June 2001)
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