ECONOMY

Franchising seen full of promise for growth of Greek retail sector

The Greek market has great potential for the growth of the franchise system, which also offers opportunities for expansion into neighboring Balkan markets, speakers at the Economist conference «The Franchise Leadership Summit» in Athens said yesterday. «The franchise system, a useful instrument for the growth of financially sound businesses, could be one of the most effective models for the penetration of Greek firms in neighboring markets, mainly in the Balkans, without requiring huge amounts of capital or the assumption of high risk,» said Deputy Development Minister Yiannis Papathanassiou. The franchise system is attractive for an additional reason. «Given the weak relationship between small businesses and banks in our country – we have the lowest rate [of small firms borrowing from banks] in the EU, just 29 percent against Austria’s 77 percent – this model can provide solutions and prospects,» Papathanassiou added. Furthermore, he said the growth of retail sales in Greece in 2005 was 3.5 percent, among the highest in the EU, partly due to the new extended shopping hours. Franchisee firms today account for no more than 7-8 percent of Greece’s retail trade, while the respective rate is more than 50 percent in the US and about 30 percent in France and the UK. Yiannis Iliadis, president of the Franchise Association of Greece, called for government measures to lift obstacles to the growth of the model and for investment subsidies to be made available to franchise firms, which could also go on to expand abroad. The UK’s easyGroup President Stelios Hadjioannou raised the problem that his company is facing in developing a chain of Internet cafes in Greece. He said Internet cafes in Greece are under persecution, largely treated like dens for slot machines, and it is very difficult to obtain licenses.