ATFBank and KAF announced about the launching of joint program on franchising

/Kazakhstan today, October 21, 03/ - ATFBank and Kazakhstan Association of Franchising for the first time in Kazakhstan launched a joint program on financing franchise license purchase. Timur Isatayev, the Vice-Chairman of ATFB, and Andrey Zakharov, the President of KAF, informed about this fact today, on October 21 in Almaty. In their opinion, Kazakhstan is in the threshold "of rapid franchise development", which will contribute to the development of small and medium enterprises in the republic. According to T.Isatayev, the program "Franchising in Kazakhstan" will allow to financially independent SMEs to obtain funds for purchasing a license as well as working capital for its launching. The advantage of franchise (a type of a business, when one entity transfers to another legal or physical person a right to sell its products or services) for an enterprise of small or medium size according to T.Isatayev and A.Zakharov are lower interest rates and longer term in comparison to common financing terms. "The financing periods range from 5 to 7 years at rates lower than market ones", - the managing director of ATFB, Talgat Kuanyshev explained. Moreover, any franchise license to be purchased, or long-term assets such as realties or equipment to be acquired for its launching can serve as a collateral. As T.Isatayev highlighted, there are no limits under this program imposed by the bank. Within this program "the bank is ready to provide with infinite number of loans provide that it is a good and correctly structured projects", - he said In opinions of the heads of ATFB and KAF, franchising is of interest to Kazakhstani entrepreneurs due to suitability and advantages of running a business under this system, which is based on already tested, well-organized trading-technological processes, mechanisms of supply chain management, technology and promotion of goods. "We believe it will be demanded, and it is actually already demanded", - T.Isatayev is convinced. "At present time entrepreneurs need ideas more than capital", - A.Zakharov added. At the same time, they both noted that purchase of a license does not guarantee a 100% success, however, according to statistics and international practice, an enterprise that buys it is likely to stay in business with two times greater probability than an independent entrepreneur. As A.Zakharov informed, currently 50 companies do their job under this system in Kazakhstan. As a result at Kazakhstani market such well-recognizable brands as MaxMara, Bennetton, Baskin 31 Robbins and many other get promoted. At present time in the RK laws on complex entrepreneurship license and protection of intellectual property as well as Civil Code regulates the relations on running a business under franchise system. [2003-10-21]