Franchising is a modern and very convenient form of relationship among businessmen. The finished model significantly 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.
The formation of the assortment of each outlet is carried out depending on the daily demand of the buyer, whose residence is nearby. The target group is a person with an average income, so every supermarket tries to keep low prices. Attracting additional buyers is carried out by establishing discounts on a certain group of goods or holding stocks over a period of time.
The history of the development of Pyaterochka supermarkets
The opening of the first Pyaterochka supermarket took place in 1999 in St. Petersburg. At that time, LEK was developing very rapidly - it took only six months to conquer the Moscow market and open 15 stores.
In 2002, the LEK management decided to try another direction of business development - this is how the Pyaterochka franchise appeared. In 2005, the Kopeika, Narodnaya Kopeyka, and Perekrestok stores joined the chain of stores. Then the holding was renamed to X5 Retail Group.
Currently, the Russian market is filled with more than 6,000 chain stores, the opening of most of which was facilitated by the Pyaterochka franchise. Customer reviews of the business are extremely positive, because the company's leaders provide budding entrepreneurs with comprehensive support at all stages of development.
Reverse franchise. 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.
Such cooperation is based on the following principle: first, the franchisee and the head office of X5 Retail Group sign an agency agreement, according to which a novice entrepreneur receives more than 90% of the goods (except for drinks containing alcohol) and full management of the store.
The sale of goods is completed by the collection of proceeds with its subsequent transfer to the franchisor's account. The amount of agent remuneration is from 13 to 17% of total sales.
From the amount received, the franchisee must accrue wages to employees, pay taxes, fees, utilities, and leave funds for the maintenance of the store.
Everything else will make up the personal profit of the franchisee.
Franchise cost
How much does the 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 payback of the store occurs within 1-2 years.
Franchise Offer Benefits
Individual entrepreneurs who independently opened grocery stores often cannot compete with retail chains, as they simply do not have enough resources. X5 Retail Group knows a way 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 brand and unique entrepreneurial technologies, and transfers the proceeds monthly to the account of the parent company and receives the amount of the agency fee indicated in the agency agreement.
Pyaterochka reverse franchise has the following advantages:
- work with a popular brand, which in turn guarantees a quick start to a business;
- proven store development model;
- availability of software and finished documentation;
- turnover is fully provided by the parent company;
- full marketing support;
- conducting corporate training.
Franchise concept
Any representative of small and medium-sized businesses can open the Pyaterochka franchise store. Reverse franchising requires the franchisee to sequentially perform the following actions:
- Studying and signing a set of documents.
- Paying a lump-sum payment.
- Selection of a suitable room in accordance with the standards established by the network.
- The acquisition of the necessary technological and commercial equipment.
- Employment recruitment followed by training at the training center X5 Retail Group.
- The opening of the store, the start of sales.
- Management of staff, sales control and inventory accounting.
- Exact adherence to technologies transferred by the parent company, as well as unquestioning submission to each written order of the regional director.
- Keeping the store in good condition, regular payment of wages and timely payment to the budget.
Franchiser's Responsibilities
In accordance with the chosen form of the store, the reverse Pyaterochka franchise can cost from 6 million rubles. and higher. In this case, the franchisor must:
- Transfer data about each business process, document system, brand book, as well as inform the franchisee about technologies and know-how, about store technological projects, engineering solutions, etc.
- Install the software package and regularly update it.
- Advise an entrepreneur regarding repair, construction work and the acquisition of necessary pieces of equipment.
- Organize the supply process and make sure that only trusted suppliers or our own distribution center are allowed to cooperate.
- Provide possible assistance to ensure that franchisee suppliers bring alcoholic beverages.
- Involve the franchisee store in the marketing and advertising campaign of the network.
- Monitor compliance with franchise conditions.
- Pay agent fees.
- Conduct a scheduled audit.
Buyer Requirements
The Pyaterochka franchise allows a new partner to count not only on a stable income, but also to be sure that they will not be left in a difficult situation.
In this case, the potential buyer must meet the following basic conditions:
- Own or attract investment investments.
- Own or lease a suitable retail space.
- A franchised store should be located in one of the following areas of the city: residential / sleeping / densely populated or busy place, which is characterized by high customer traffic.
- A major highway may be located nearby.
- There must be access roads and an unloading place.
- Providing the possibility of pallet delivery of goods.
- Convenient parking for buyers.
- Telephone line and internet.
- Water supply, supply and exhaust ventilation, air conditioning, sewerage, burglar alarm, heating.
- The Pyaterochka advertising sign should be clearly visible from any side around the clock.
Room requirements
Assessment of profit and costs of the selected premises is carried out by specialists of X5 Retail Group. The most important factor in the entire business process depends on the location of the retail space, the population of the district, the number of competitors and infrastructure - how quickly the Pyaterochka franchise pays off. Reviews in Moscow about cooperation with this network are mostly positive.
The only thing that confuses potential partners is a rather high initial capital, because the modern market offers many franchises with a much lower cost.