TBY talks to Elshan Musayev, Chairman of the Azerbaijan Franchising Association, on the opportunities available in the franchise sector.

TBY What role does the Azerbaijan Franchising Association play?

ELSHAN MUSAYEV We try and educate people on why franchising is a better way of doing business or opening a business in Azerbaijan. We help them prepare a business plan and a marketing strategy. Often in Azerbaijan, business managers aren’t used to drawing up business plans and marketing plans, except when they’re applying for credit from banks. But in franchising, you do not get the rights to a franchise without a business plan, and a solid business plan at that. What makes a franchise advantageous and desirable is the name, and what makes the name quality is the consistency in the quality of services offered regardless of in which country it may be. There needs to be trust in a name, for example, people expect a Big Mac in Azerbaijan to be the same as in New York. Another goal of ours is also to help Azerbaijani companies sell franchises. This means money for Azerbaijan, and it also means good PR for Azerbaijan. We provide services for both franchisers and franchisees. 

Can you tell us more about those services?

We organize seminars and essentially give consulting services, free of charge. We’re dealing a lot with shopping malls, where big names are required, be it in terms of clothing stores or fast food and so on. Mall operators need big names, they need Benetton and Burger King, for example. Therefore, another thing we do is set up partnerships for franchises to operate within. Money isn’t the only issue. You need to find people who understand those businesses, who can manage those businesses, and who can guarantee the set standards that brands demand. We have partnerships with the World Franchise Federation, the Turkish Franchise Association, and with the Baltic Franchise Association, the Greek Franchise Association, and so forth. We benefit a lot from their experience, and we bring members of these associations in for seminars. 

Have you seen positive results for your efforts? 

We have been seeing some good results, yet we expect more. There are still big names like Starbucks, Zara, and H&M that simply won’t come to Azerbaijan because they cannot develop the right strategic plans as the conditions aren’t right for them. We’re trying to change that, but it’s going to take some time. 

What about your program for the development of entrepreneurship in the non-oil sector?

I met with the Minister of Economic Development about this program, but unfortunately the program hasn’t developed yet. We are still trying to promote this and to promote the development of SMEs in Azerbaijan. A large portion of the country’s revenue still comes from oil and gas, and this is not a good thing. We need to diversify. 

What regulatory challenges are there to franchising in Azerbaijan?

The regulations aren’t the main issue, the main issue is that people understand how franchising works. Having said that, incentives such as tax breaks would also help, and that is something we’re working to achieve.

© The Business Year