8 April 2026

How to start a franchise business in Russia

8 April 2026

7 minutes

Investment parameters, legal requirements and steps for Indian entrepreneurs

Franchising in Russia is an important driver of regional economic development. Franchisees are granted access to a wide consumer base and can leverage a proven business model with predictable financial results. This article outlines the steps for launching a franchise business in Russia.

Why securing a franchise in Russia is attractive for Indian businesses

Over the past four years, the number of companies with Indian founders in Russia has more than tripled, rising from 312 to 1,030. Indian-owned companies now account for 1.6% of all foreign businesses in the country.

In May 2025, the Indian Small Business & Franchise Association (ISFA) and the Russian Franchise Federation signed a memorandum of understanding to collaborate on promoting franchising opportunities. The partnership includes measures that reduce legal barriers to launching and operating franchise businesses in both countries.

Russia’s franchise market is among the largest in Europe. The country has developed infrastructure to support growth, including specialised consultants, trade shows, industry associations and online platforms for selecting franchises.

Number of franchises in Russia

Source: franshiza.ru

Financial performance of Russian franchises in 2024

Source: franshiza.ru

Founder of communications agency Modifiers, Anton Utehin, explained that to expand their networks, many Russian franchisors engage with their partner communities through informal meetings, business clubs and support programmes. "Entrepreneurs value being part of a strong network, with direct interaction with the management team," he noted.

What franchises operate in Russia and what initial investment is required

Franchising is prevalent in the food service and retail sectors. In low-cost market segments, the most common franchise formats are order collection points, service companies, educational projects and small retail outlets. However, the market is much broader, with franchises in services, education, fitness, medical services and personal care demonstrating the most rapid growth.

Russian franchise market structure, 2025

Russian franchise market structure, 2025 (1)

Note: The total exceeds 100% because many franchises operate across multiple segments simultaneously.

Source: Russian National Academy of Business and Entrepreneurship

Initial investments start in the hundreds of thousands of roubles, equivalent to roughly INR 200,000–300,000. More capital-intensive formats require several million roubles initial investment, which is equal to INR 2–3 million or more, depending on the concept and region.

Growth in new franchise outlets today is driven by cities outside Moscow and Saint Petersburg, where demand for chain formats in retail, services and HoReCa remains strong.

"Many franchising networks in Russia are focused on regional expansion. For example, one network currently operates over 1,100 coffee shops in more than 130 cities and develops its model through local partners. In the network’s regional strategy, the profile of the franchisee is the crucial consideration. Experienced entrepreneurs who already know how to manage a business and help the network scale faster are sought out. This approach allows a single outlet to grow into a regional network," noted Utehin.

Franchise costs in Russia, 2026

Source: TopFranchise

Indian businesses can rely on Sber’s banking solutions to support their operations in the Russian market:

trade finance and settlement services
currency exchange and cross-border payments
corporate accounts and cash management

Niches that may be attractive to Indian businesses

Food service and fast food franchises

Advantages for Indian entrepreneurs include:

popularity of street food and fast casual formats
low entry threshold compared with full-service restaurants
creates an opportunity to adapt national cuisine to local tastes and market realities

Beauty and personal services franchises

This is the largest franchise segment in Russia, including:

beauty salons
dry cleaning and cleaning services
repair shops and auto service centres

These projects often require smaller investments and scale more easily through regional networks.

Understanding customer payment habits is essential when launching a business in Russia. See which payment methods Russian consumers prefer.

Education and children’s projects

This segment is promising for incoming partners thanks to:

India’s strong reputation in IT and engineering education
high demand for supplementary education in medium and large cities

Fitness, health and wellness franchises

Promising areas include:

yoga and wellness studios
functional fitness centres
medical and diagnostic services

E-commerce and delivery service franchises

Indian companies are increasingly entering the Russian market via e-commerce and online platforms, creating opportunities in order collection points, logistics services and last-mile delivery services.

Options for Russian market entry

Before choosing a franchise, it is important to determine the right format, assess the payback period and consider how best to manage a local team:

Single-unit franchise — purchase a single outlet to test demand and adapt a model locally. Typical payback period: 18–36 months in mass-market segments. Local team: operations manager and staff.
Master franchise — exclusive rights to develop a brand in-country, with the right to sell sub-franchises. Payback period: 3–5 years due to scale and royalties. Local team: development office, franchise sales, partner support.
Joint venture (JV) with local partner — joint enterprise with a Russian partner to share risks, gain access to channels and obtain regulatory support. Payback period: 8–36 months, depending on share structure and scale. Local partner handles operational management.

"Franchisors are increasingly opting to build a network in parallel to the company, rather than just opening a single outlet. In practice, this means supporting multi-franchisees, providing management training and assistance with scaling. Entrepreneurs view franchises not only as a start-up tool but as a platform for growth," says Anton Utehin.

Useful resources

These materials help to better understand the Russian market and explore available franchise opportunities:

Franchise directories: franshiza.ru, topfranchise.ru, Forbes Франшизы

How to choose a franchise in Russia

Foreign investors should start by selecting a franchisor and assessing the business model:

network age
number and geography of outlets in operation
actual revenue and payback indicators
franchise fee structure and royalties

It is important to compare the required investments with regional costs for rent, staff and equipment, using market benchmarks.

Do not overlook performing or ignore legal due diligence.

Checklist for registering a franchise business in Russia

Register a company in Russia. You must establish a legal entity, usually a limited liability company, or register as a sole proprietor. The company must be entered into the state register. It is impossible to conclude a franchise agreement without first registering a company or sole proprietorship.
Verify a franchisor’s brand rights. Make sure that the trademark and other intellectual property are officially registered in Russia and belong to the franchisor. Only then can they be transferred to you under a franchise agreement.
Sign a commercial concession agreement. This document sets out the subject of the agreement, the franchise fee and royalties, operating standards, quality requirements and agreement termination conditions.
Register the agreement. After signing, the agreement must be registered with the Federal Service for Intellectual Property, Rospatent. You will need to submit an application form, the text of the franchise agreement and proof of trademark rights. A state fee must also be paid.
Obtain confirmation of registration. The agreement becomes legally binding only after it is entered into Rospatent’s register. It can take up to two months for the agreement to be processed.
Register any changes to the agreement. If financial terms, territory or other material provisions are subject to change then these amendments must also be registered with the state.
Check the project’s tax structure. Before launching the business, it is important to review the tax regime, the method of royalty payment and the distribution of income. The tax structure must comply with Russian law and be economically justified to avoid issues with the tax authorities.