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Europe focus: Poland – Europe’s growing franchise underdog

Europe focus: Poland – Europe’s growing franchise underdog

While it may not be an obvious franchise market, Poland still presents many benefits to European-bound international investors.

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Words by Kieran McLoone, deputy editor for Global Franchise

POLAND IN NUMBERS

Population: 37.97 million
Size: 312,679 sq. kilometers
GDP: $585.7bn
Total number of franchises: 1,310

The franchise industry in Poland is often described as “mature, yet growing”, due to its many established systems and simultaneous opportunity for the right kind of international concepts to carve out a dedicated section of the market.

It’s a region that unmistakably skews toward home-grown concepts, with eight out of every 10 franchise brands in the country being of Polish origin. However, this shouldn’t dissuade international brands from testing Poland’s receptive market; some of the country’s very first examples of franchising came in the form of global names such as McDonald’s, Adidas, and Jean Louis David opening Polish locations in the early 1990s.

Of the 20 per cent of the Polish franchise market made up of foreign brands, the most popular systems come from the U.S., Germany, or France. So while there’s certainly a European slant to Poland’s franchising preferences, U.S.-based concepts shouldn’t overlook the potential for growth.

Since the early 90s, the industry has grown exponentially and now, according to the Franchise Market Report 2019/2020, there are around 1,310 franchise networks in Poland, with 83,000 unique franchisees.

Understanding local flavor

While international brands have undoubtedly found success in Poland, the market is dominated by local chains that appeal directly to the preferences – and budget – of Polish consumers and franchisees. This includes brands like Zabka, a Polish convenience store franchise that’s one of the largest Polish brands, with over 6,000 locations.

Examining exactly why Poles choose Polish brands over international ones can lay the groundwork for a solid, researched market penetration plan. “The most significant problem that international franchisors meet in their attempt to establish their networks in Poland is the shortage of potential franchisees with, firstly, sufficient capital resources to pay the franchise fees and to finance the initial investments; and secondly, the required management expertise and knowledge of franchising,” says Andrzej Krawczyk, founder and managing partner for ARSS, a franchise consultancy specializing in helping Polish development.

Krawczyk continues: “The foreign franchisors wishing to enter the Polish market tend not to notice that in most cases their brands are not known to the average Polish customer, their product range and its pricing are not adjusted to Polish customers’ needs and purchasing power and, last but not least, the cost associated with the payment for the franchise fees and to finance the initial investments is too high for potential franchisees.”

Adapt and thrive

All that being said, Poland remains a more than worthy territory for savvy brands willing to adapt their concept for the local market. Poland has its own trends dictating the business landscape which, if catered to, could result in domestic popularity and successful growth. For example, online sales and delivery have been a nationwide favorite even pre-COVID, and it’s popular for grocery stores to offer delivery or pickup.

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