Comparing regulations in 175 economies
A copublication of the World Bank and the International Finance Corporation
The first ten reformers are :  Georgia, Romania, Mexic, China, Peru, France, Croatia, Guatemala, Ghana si Tanzania.

Provided by HotNews.ro

Download the 192 pages pdf  

Franchising in Romania
From http://www.europeanfranchising.com/memberstates/Romania.aspx

Romania is located in southern Europe, bordering the Black Sea in the east, Ukraine and Moldova in the northeast, Hungary in the northwest and Serbia and Bulgaria in the south. It has an area of 238,391 square kilometres and a population of est. 22, 355,551 in 2004. The country is divided into 41 Regions (judete) and the municipality of Bucharest which constitutes the country’s capital city. The official language is Romanian.

According to the Romania’s constitution, proclaimed in 1991 and amended in 2003, the country is a democratic and social republic. The transformation from communism into a parliamentary democracy took place in 1989. The legislative power is represented by the Senate and the Chamber of Deputies. The head of the executive branch is the President who appoints the Prime minister. The President, as well as the members of the Parliament are elected by popular vote.
Romanian economy is characterised as a boom economy and belongs to the fastest growing in Europe. The country was granted the “functional market economy” status twice, primarily in March 2003 by US Department of Commerce and soon after, in October 2004, by the European Union officials. Romania has been a member of NATO since 2004 and is expected to access the European Union in 2007.

Romania is one of the few European countries which have developed specific Franchise Legislation, namely: the Government Ordinance No. 52/1997 Regarding the Legal Status of Franchise. According to the regulation, “Franchise” is “a marketing system based on continuous collaboration between natural persons or legal entities, each of them financially independent from the others, whereby a (…) franchisor grants to (…) franchisee the right to operate or to develop a business, a product, a technology or a service”. Internationally operating franchisors should be aware of the fact that opening and operating a franchise network in Romania involves carefully following rigorous requirements.

Disclosure requirements
In the pre-contractual phase the franchisor is required to provide the prospective franchisee certain information by the way of a Disclosure Document. In order to enable the franchisee to make an informed and conscious decision as to entering into the franchise relationship, the disclosure document must be submitted before he undertakes any legal obligations with respect to the proposed business. The disclosure document shall include, among others, the following items:

    * name of the franchisor
    * experience gained by the franchisor in the proposed business
    * information concerning financial conditions of participating in the franchise network
    * exclusivity
    * further information enabling the prospective franchisee to join the franchise network in full awareness of the relevant facts.

Franchise agreement
Romanian franchise law demands specific elements to be included in the franchise agreement. These can be summarized as follows:

    * object of the agreement
    * parties’ rights and obligations
    * financial requirements
    * duration of the agreement
    * conditions governing the amendment, extension and termination.

In addition, the franchise agreement has to follow certain standards which shall lead to the creation of a franchise network appropriately respecting legal and commercial interests of both parties. The following principles have, among other things, to be considered:

    * franchisor has to operate the franchise business for a certain period of time prior to the intended expansion
    * franchisor has to provide the franchisee the initial training, as well as permanent assistance
    * the agreement shall be long enough to allow the franchisee to recover the investments involved
    * franchisor shall have the right to supervise the franchisee’s business so as to ensure the uniform usage of the trademarks and identity of the network.

Competition Law
There is a general Notification Requirement for franchise agreements which contain restrictions on competition in Romania. However, if the particular agreement benefits from one of the exemptions specified by Romanian Competition Law a notification is not needed. The franchise agreement which has not been notified is void unless an exemption applies. Failure to notify the Romanian Competition Council is also punished with a fine of up to 10% of the total turnover of each of the parties of the franchise agreement.

Registration of the trademark license agreement
Trademarks are protected either through registration with the National Trademarks Register (OSIM) or through an international registration. The beneficiary of the license agreement might be authorised to use the trademark throughout the Romanian territory or the part of it, for all or for parts of the products or services, for which the trademark was registered. The license may be exclusive or non-exclusive. The trademark’s holder may revoke the right to use the trademark by the licensee who is in breach of the provisions of the license agreement.

Failure to register the license agreement with the OSIM results in the fact that the license is not binding upon third parties.

signaled by: Eugene Driga-

Starbucks Corp. dropped in Europe after the world's biggest coffee-shop chain said profit fell for the first time in five years.

Starbucks said fourth-quarter profit declined 5.2 percent to $117.3 million, or 15 cents a share. Excluding some costs, earnings were 17 cents a share, meeting the estimate of John Glass, an analyst with CIBC World Markets. Sales of $2 billion missed the average Thomson Financial estimate of $2.02 billion. Starbucks dropped $2.19 to $37.24 in Germany.

Pepsi brand is present on Romanian market since 1966. The current franchise system started in 1991 with the launch of bottler Quadrant Amroq Beverages (QAB), which produces and distributes the soft-drinks under PepsiCo trademarks along with its own products, in Romania and Rep. Of Moldova.
PepsiCo Romania recorded an increase of 26.2% in sales volume in the first quarter of 2006 vs. same quarter 2004, and an average annual growth rate higher than 38 % over the last 6 years, according to a research conducted by the American company Canadean in Q1 of this year.

PepsiCo is present on the Romanian carbonated soft drinks market with the largest offer of Cola drinks, reunited under PEPSI-COLA trademark (Pepsi, Pepsi Light, Pepsi Max, Pepsi Twist Lemon, Pepsi Twist Light Lemon, Pepsi X and Pepsi Capuccino), with 3 flavors in 7-Up line, and with Mirinda Orange and Everess Tonic completing the carbonated soft-drinks portfolio.

source: HOTNEWS.ro More>>

George
There are over 1000 restaurants and 300 coffee shops in the Romanian capital, where officially reside approximately 2 million people, according to real estate consultant Eurisko. In Paris thee are 30,000 restaurants and coffee shops, but the French capital has a populace of 10 million citizens.
source: Hotnews.ro
More>>

Q: How did you become a franchise pioneer in Germany?
Manfred Maus: In the 1960s I launched home & garden do-it-yourself store OBI. My idea was to consolidate the small to medium-size industries and family businesses by bringing them together under one brand. This was a means to help them in the long-term better compete with the bigger distribution groups. In this fashion, franchising in Germany came into being.

Q: Since that beginning, quite a lot has happened in franchising in Germany. Today people talk about a boom.
MM: I have followed the development of franchising very closely, and I think that in Germany today we have great opportunities of developing franchising so that it becomes one of the best entrepreneurial formats with which to grow independent businesses and create employment. The Deutsche Franchise Verband's (German Franchise Association) current objective is a campaign to create 200,000 jobs in franchising, in particular through the internationalisation of indigenous brands.

Q: What is your optimism based on?

Last version of the Romania Country Commercial Guide - 2006 Edition issued by the US Commercial Service
IMO specialists and Mrs Corina Gheorghisor from the US Embassy in Romania contributed for the franchise section in this guide.

You can download the Guide from the BUYUSA.GOV SITE (PDF, 1408KB)