Doing Business In - International Franchise Association

There is room for growth in the fast food sector. Czechs spend about $1.2 billion (25
billion CZK) annually on fast food. This totals approximately 30 percent of restaurant
revenues. The two biggest players on the local fast food market are McDonalds and
KFC; these two chains account for 14 percent of the total of fast food market. Czechs
eat fast food 3 times more frequently than Hungarians and 4 times more than Polish
consumers.
Well-known coffee shops chains have been spreading rapidly throughout the country.
Successful players like Segafredo, Illy, Coffee Heaven, and Coffeeshop Company are
expanding rapidly and the market has attracted newcomers. Starbucks entered the
market in January 2008, and was followed by other famous franchises, such as Costa
Coffee in 2008, and Gloria Jean’s Coffee in 2009. Other coffee chains like German
Cup&Cino, Indian Café Coffee Day and Coffee Republic of the U.K. are interested in
entering the growing Czech market.
Real estate agencies have for years flourished in the booming Czech housing market.
U.S. firms have a strong presence in the country, RE/MAX entered the Czech market in
2005, followed by ERA in 2006, and Century 21 at the end of 2008. The real estate
market had been growing rapidly in the last few years, but the decline in demand during
the financial crisis brought major consolidation of the market. Market slowdown forced
many small firms to join the networks of major real estate players. This resulted in
growing market share of the franchising real estate networks. Three major U.S. players –
RE/MAX, Century 21 and ERA already cover around 20% of the Czech real estate
market, and their share is poised for further growth.
Some franchising segments have yet to develop in the Czech market. Good prospects
exist for Business Services, Health-care Services, Travel Services, Digital
Entertainment, etc. There is also room for Convenience and Apparel/Fashion stores,
Senior Home Care and Children/Education and Training services.
From a legal perspective, Czech legal system is liberal and places no barriers for
entrance and operation of a franchise. Franchising takes the form of a contract between
two entities that is regulated by the Commercial Code pertaining to commercial contracts
and sales and licensing agreements. Access to capital has also improved with Komercni
Banka offering a financing program geared towards potential franchisees in the Czech
Republic (http://www.kb.cz/en/).
U.S. Commercial Services together with a Czech Institute for Franchising organizes a
major franchising event – FrAMchise Day, American Franchise Day – a tradeshow and a
conference, which is to be held on October 2010 in Prague (www.framchiseday.cz)
Contacts:
U.S. Commercial Service
Ms. Jana Ruckerova, Commercial Specialist
Phone: (420) 257-022-310
Fax: (420) 257-022-810
E-mail: Jana.Ruckerova@mail.doc.gov