The most common areas of interest for trade-focused franchises were cosmetics, fashion, agriculture products, and non-food retail. Several service-based franchises responded to the survey. The majority of respondents (59%) were Czech-based businesses. The high response rate from Czech businesses substantiates the upward trend in the incidence of franchising in the Czech Republic. As entrepreneurs seek out opportunities to develop their business at the lowest possible cost, they are beginning to turn to franchising. In terms of initial investment, the financial burden for new franchisors varies significantly between businesses. ČAF estimates that several thousand Czech crowns are needed to set up a franchise in the field of education, but that figure soars to several million for those looking to create a franchise in hospitality. Entrepreneurs tend to be interested in setting up franchises with an initial investment of between 500,000CZK and 1.5 millionCZK. Respondents to the ČAF survey largely refrained from disclosing what percentage of the initial investment was provided by individuals based in the Czech Republic, compared to how much of the investment was sourced from abroad. The ČAF survey provided an interesting insight into the return on entrepreneurs’ initial investment. Franchisors stated that they expected to see a return of 11% of their investment within one year. This figure rose to 32% within two years and 38% within four years. Only 19% of an initial investment will be returned yearly after the first four years. According to ČAF research, entrepreneurs running franchises rarely open up their own businesses. Instead, they tend to focus on acquiring new franchise partners and opening more branches. It’s not uncommon for one individual to own multiple branches of a single franchise.
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