Experts at Yakov and Partners analyzed the development of franchising and international retail regulation practices to identify which growth mechanisms may be most relevant for the Russian market in the coming years. According to the report “Key levers for retail development: trade regulation and franchising,” franchising is emerging as a key tool for capital-efficient expansion among retailers.
According to the report, since 2020 the number of franchising brands in Russia has increased from 2,800 to 4,300, while total market turnover has grown from RUB 2 trillion to RUB 3.72 trillion. Franchising is expanding due to rapid scalability, tax optimization, and cost-sharing mechanisms, notes Maria Vit, Expert at Yakov and Partners.
For Russian retail, franchising is becoming one of the primary scaling tools. Since 2020, the number of franchises in the market has grown by approximately 1.5 times, while franchisee turnover has increased by 1.8 times. Large Russian retail chains are consistently developing this area, viewing franchising as a strategic alternative to organic growth, which is constrained by high borrowing costs and antitrust barriers to further market share expansion
Maria Vit, Engagement Manager at Yakov and Partners
By the number of franchising brands, Russia already ranks fourth globally, after South Korea, China, and India. At the same time, its share of the global market remains around 1.9%, indicating significant growth potential. According to expert estimates, this figure could increase to 2.15% by 2029.
Global trends also confirm the long-term nature of this shift. Analysts forecast that the global franchising market will grow from $1.54 trillion in 2024 to $2.02 trillion by 2027, representing a compound annual growth rate (CAGR) of 9%. According to the study’s authors, this growth is driven by several factors, including rapid scalability, cost distribution, and optimization of ownership and management models.
For Russian retail, this model is particularly important as organic growth is becoming increasingly challenging. The Russian grocery market is growing slowly—no more than 2–3% annually in real (volume) terms. At the same time, the average operating margin of the three largest grocery chains declined by 1.2 percentage points between 2020 and 2025, from 7.2% to 6.0%. Overall, the Russian grocery retail market amounted to $286 billion in 2024—higher than Brazil ($231 billion) but significantly below the United States ($1.76 trillion).
For this reason, major Russian retailers are increasingly developing franchising as an alternative to organic growth, which is constrained by high interest rates and antitrust limits on market share expansion. In addition, established mature brands, including large grocery chains, primarily operate under a reverse franchising model: assortment, pricing, and store management remain under the franchisor’s control, while the franchisee receives an agency fee. This structure allows companies to maintain unified network standards while accelerating expansion, the report notes.
At the same time, franchising growth in Russia remains uneven. In monetary terms, it is primarily driven by mature companies with strong brands, while the decline in the share of non-food retail in franchising (from 22% to 12%) and food retail (from 7% to 5%) between 2020 and 2024 is largely attributed by the authors to increased competition from marketplaces.
In other words, franchising has already proven its effectiveness as a growth model, but its дальнейшее развитие will directly depend on how balanced the competitive environment is between traditional retail and platform players
Maria Vit, Engagement Manager at Yakov and Partners
Regulation as a condition for scaling
According to experts, as franchising becomes the primary expansion tool, regulation should not override market logic but rather create more predictable and fair conditions for scaling retail networks. The report’s authors note that in most of the countries analyzed—Brazil, China, Mexico, the United States, Germany, and Poland—governments do not rely on rigid direct regulation of market shares or player behavior.
Instead, they apply targeted measures, such as case-by-case antitrust review of transactions, monitoring price increases for socially important goods, temporary VAT reductions, voluntary agreements with retailers, and subsidies for producers.
In this context, the most critical area for regulatory fine-tuning is not shelf prices but the rules governing interactions between market participants. In all countries except Brazil, there is regulation of retailers’ contractual practices, while Germany and Poland have introduced direct bans on certain unfair trading practices.
For Russia, this area is particularly important, as the sustainability of the retail business model depends not only on brand strength, traffic, and assortment, but also on competition across sales channels, transparency of commercial terms, supply chain structures, penalties, marketing fees, and risk-sharing among participants.
Another key element for scaling retail networks is the antitrust framework. In Russia, a fixed maximum market share threshold of 25% is in place, whereas none of the comparable countries apply such a strict cap. Instead, they use more flexible mechanisms, such as presumptions of dominance and case-by-case analysis of M&A transactions.
In practice, this makes franchising not just a convenient but often a necessary growth model for Russian retail chains: when organic market share expansion is limited, partnership-based models become a natural channel for growth.
Another critically important area is e-commerce regulation. In most of the countries reviewed, specialized regulatory frameworks for e-commerce are already in place, and China has introduced a direct ban on algorithmic pricing. In Russia, however, the study highlights an ongoing regulatory imbalance between brick-and-mortar retail and digital platforms.
Against this backdrop, leveling the playing field between offline retail and e-commerce becomes a necessary condition for franchising networks to compete not only for customers but also for the economics of expansion.
According to experts, the importance of this issue will continue to grow alongside the development of the platform economy. By 2025, the number of B2B buyers on marketplaces in Russia exceeded 1.4 million, while the B2G online procurement market reached approximately RUB 12 trillion. At the same time, a полноценная B2G marketplace model based on large commercial platforms has yet to fully emerge in Russia, and the maturity of B2B solutions offered by Russian marketplaces remains below global benchmarks.
This suggests that competition between traditional retail, franchising networks, and platforms will intensify, making regulatory balance an increasingly sensitive issue, the report’s authors conclude.
Under these conditions, experts believe the most promising scenario for the Russian market is not tighter direct price controls, but targeted regulatory fine-tuning that supports competition, limits unfair practices, and creates a level playing field between traditional retail and digital platforms.
