Franchising 2007: in numbers

Net exhibition space (sq. m) including extra-exhibition space	929,5*
No. of visitors	3,347*
No. of exhibitors, including foreign ones	49* 7*
Countries represented (USA, Russia, Germany, Ukraine)	4*
Franchises represented	57

* Carrying out an audit guarantees exhibitors and visitors objective and trustworthy information, which allows the marketing potential of the trade show to be realistically evaluated. The audit of statistical data is being carried out by the BDO Balance-Audit company in accordance with methodology of the CENTREX international exhibition union.

In the program of events took place:
Conferences	1
Seminars	12
Special events	Round table "Perspectives for entrepreneurship development", Franchising School, Franchising Club. "Best Franchisor 2007" rating reward.
Accredited mass media: of which: - printed media - TV and radio companies	12 10 2

The following persons participated in the press conference and official opening ceremony of the Franchising 2007 trade show:

• S.М. Prohorov, the First Vice-President of the Ukrainian League of Industrialists and Entrepreneurs.
• A.A. Krivonos, Director of the Board of the Ukrainian Association of Franchising;
• G.S. Hanina, the Head of the Department of Development and Introduction of Entrepreneurs Support Programs of Ukrainian Entrepreneurs Support Fund;
• A.V. Shlepnin, the First Substitute of the Head of the Main Office in Regulator Politics Affairs and Entrepreneurship of Executive Body of Kyiv City State Administration;
• V.A. Pekar, President of Euroindex Ltd.

Information support

Video news about the trade show were broadcasted in TV programs:
"Events" ("Ukraine" Broadcasting Company), "Business Hour" (5th Channel).
The specialized media partner: the "Business to buy and Franchising" magazine.
The strategic information partner: the "Trading Business" magazine.

Events' program

Program of events became a place for communication of professionals.

Experienced franchisers and specialists of this field were discussing actual problems of franchising in Ukraine and abroad:

• Future tendencies of entrepreneurship.
• The current state of franchising in Ukraine.
• Franchising and a quality system.
• Foreign experience. Ukrainian realities.
• Crediting in franchising.

Franchising school for beginners' franchisees is opened for the second year during the trade show, where experts have discovered the philosophy and practice of franchising, the basic aspects of functioning of the enterprises in franchising in example of operating ones in Ukraine and abroad. School covered such subjects:

• Franchising philosophy:

- What is franchising?
- History of franchising.
- Franchising terminology.

• Franchising practice:

- Main tips in organization and business technologies of franchising companies
- Differences of franchising from other forms of business and licensing
- Buying foreign franchise: what to remember?

Within the framework of the exhibition the Crediting in Franchising conference took place, where the CreditPromBank and Universal Bank, together with representatives of franchising market, have discussed the problems of crediting in franchising.
Following experts presented their reports: A. Krivonos, the Head of the Ukrainian Franchise Association; P. Kalita, the President of the Ukrainian Quality Association; A. Nogachevsky, the Head of the Franchising Committee in European Business Association, TRIARH; A. Kuprijanov, Development Director of Glance; L. Menshikov, Finn Flare; O. Vereshchak, the Chief of the Network Development Department of ING Bank Ukraine; A. Smirnov, Development Director of Larson and Holz IT Ltd.; P. Cairnie, World Franchise Associates.

Among participants of the exhibition the Rating was awarded — Franchising Networks in Ukraine. The Best Franchisor 2007. The results of processing of 48 questionnaires of participants of a rating winners, according to announced nominations, were following:

• The Best Franchisor in Public Catering — Pizza Celentano, Fast Food Systems company.
• The Best Franchisor in Non-Food Trade — Jeans Super Price.
• The Best Franchisor in Food Trade — Nash Kray (Our Land).
• The Best Franchisor in the Service Market — Un Momento.

And also there were given special awards:

• The Most Fast-Growing Network — Jeans Super Price.
• The Most Luxury Network — Japi.
• The Most Accessible Network — ACCESSORI.
• The Most People's Network — Parquet World.
• The Most Persevering Foreigner — FINN FLARE (Russia).

Visitors

In three days the trade show was visited by the 3,347 persons. We draw your attention to the results of questioning of visitors of Franchising 2007.

1. By position held at the enterprise where they work, visitors were distributed as follows:

2. Aim of visiting the trade show:

3. Information on attendance of visitors to the trade show:

4. Sources of information on the trade show:

Quotes by our participants:

ING Bank has been in Ukraine for ten years already, and established itself as a strong player in providing services to large corporate clients. In 2007, the Bank decided to develop its retail network. First offices will be opened in Kyiv in May.

The concept for launch of retail offices of the ING Bank is innovative for the Ukrainian market. According to the concept an office will be managed by a Bank's Partner under a service agreement. Such model proved to be efficient in Romania where ING started to render services through bank's partners in 2005.

Participation in the exhibition gave us an opportunity to meet many of our prospective partners representing medium and small-scale business and willing not simply to invest monetary funds but build a joint business with us. We received their first comments and response. In addition, during the event we formed a vast contact database of those interested in cooperation with our bank.

In England I work on promotion of Ukraine as a region. Few people there know where Ukraine is located. We are for the first time at the Franchising Exhibition. Unfortunately, we lacked time and did not have chance to get prepared to the exhibition. Though, we liked the show and everything went well and number of interesting negotiations was held. According to our estimate we need one or two serious meetings to justify our coming here. We are planning to bring from 50 to 100 franchises to Franchising 2008 and give more information on them: a big team will come, each brand will have its own separate board, presentation and set of advertising materials.

The franchising is paid a lot of attention on the global scale. Thanks to the franchising entrepreneurship are being developed, new jobs are being created, and novel technologies are imported. In Taiwan, for example, an individual ministry is dealing with the issues of franchising. We wish the franchising business in Ukraine successful development, growth and participation of a large number of international brands.

The competition was a success for us. I meet many highly qualified candidates to become our partners, more meetings will be held in my hotel after the exhibition is over. We would be able to consider the outcome in three months as a minimum, but I was satisfied with the visitors of the exhibition. We offer a highly professional franchise, Ukrainian entrepreneurs are not quite ready for such business, and they are interested mostly in sale of cloths and restaurant networks. Our franchise is interesting primarily to top managers of companies. Despite of the above, I believe that our first visit to Ukraine was successful.

The main objective of our participation in the exhibition was to develop the existing network of retail branded outlets according to the strategic plan for development of Ukrainian regions, as well as attracting new prospective partners into cooperation. SELA presented exhibits of its cloth and cosmetics at the stand prepared for the show.

Analyzing the effect produced by the exhibition, we may assume that about 10% of the visitors took part in negotiations with the participants; about 40% had the desire to establish their own business, but were still undecided about the specialization of their future enterprise or specific company to cooperate with. And 50% of the visitors simply learned the facts about the franchising system as a possible scheme for arranging their future business, made themselves familiar with options and forms of future cooperation and evaluated their potential regarding material and organizational basis for future work. During the exhibition, negotiations were held with more that 70 prospective franchisers, but we need time to speak about some concrete results.

Participating in Franchising this year we planned to get to know what is the show and to monitor the market. We were eager to study the demand for our brand: the RESERVED Project is expensive therefore few entities can buy it. Nevertheless, we had intensive negotiations; their number was more than we planned. We are 100% satisfied with our participation, we have work for the whole year!

The partnership franchising network RESERVED™ has been developed in Ukraine since 2003. In 2004, we opened first shop of 250 sq. m in Uman. Further on, the successful developments were brought to Donetsk, Mykolaiv, Odesa, Simferopol and Rivne. By the end of December a shop will be opened in Luhansk. We are in the process of negotiations aimed at opening RESERVED outlets in Poltava, Ternopil, one more shop in Rivne. We were particularly interested in the visitors who came from regions. Our stand was visited by entrepreneurs from Mariupol, Ivano-Frankivsk, Cherkasy etc, it was especially important as we were not in possession of any information from those regions, but we planned to start working there. Now we have many people wishing to purchase our franchise.

I have to emphasize, the audience at the show was a target one and 9 of 10 visitors knew what they wanted. They were the people having money and ready to invest in business. It was a good thing about it all.

The main purpose of our participation in Franchising was promotion of BAON™ in the Ukrainian market, and to develop a network of mono brand shops in the territory of this country. Presently in Ukraine 3 company stores are successfully in operation in Ukraine (Zaporizhzhya, Kryvyi Rih and Odessa). We are planning (starting with January 2008) to open a BAON in Poltava. Naturally, we disregard the fact that the collection of this trademark is widely presented in the Multisport commercial network.

Generally, the exhibition impressed us great deal: interesting detailed, well-thought display, different stands drew attention and interests of the visitors. There were lots of them. The visitors asked questions, gave their contact numbers for possible future cooperation. The results are already in place. We had a lot of calls. We are in the process of business negotiations. Hope for further fruitful and successful development of our dealer network. We are ready to give necessary assistance to turn-key establishment of own business and its further follow-on, including methodological, legal and consultancy support.

Profitness Consulting took part in the show together with Byuro Idei company with the purpose to raise awareness of the visitors with respect to possible investments to projects for delivery of comprehensive range of services the necessity of which is explained by establishment and development of infrastructure. Such projects are necessary because of preparation to Euro-2012 enabling to facilitate approval system and decrease capital investments if the project deals with the development of infrastructure necessary for Euro-2012. It may be public catering establishments, hotels and fitness industry facilities, SPA and cosmetology.

Most of the participants presented a business package: franchise for establishing non-food shop or public catering facility, therefore offers with respect to fitness facilities or hotels which may be repaired in a short period of time provided by Profitness Consulting were of great demand. Judging by the results of participation in the show we may say that in Ukraine a category of businessmen has emerged who accumulated their capital due to retail trade in specific group of commodity, and ready to invest in new areas of business. Among such areas is fitness being a leader in the industry. We are pleased with it as it means that a healthy nation starts its development in Ukraine.

Photographs of the Trade Show