In Russia, there is simply an incredible number of supermarkets, branded stores and shopping centers. Therefore, it is not surprising that competition in the food trade is very high.
For a novice entrepreneur who wants to open a business in this direction, there is a huge risk. It lies in the fact that people prefer to go to a popular store that has been operating for many years than to trust an unknown new outlet.
This is the main reason why many new supermarkets close before they open during the year.
The Pyaterochka franchise is a good investment, because this name has already become a brand. It is difficult to find a person who has never heard of this trading network. In addition, the franchisor will help you promote the institution and teach you how to manage your business by personal example.
Pyaterochka – what you need to know about this network?
The Pyaterochka brand, founded by X5 Retail Group (also known as Perekrestok Trading House CJSC), is today considered the most successful and popular supermarket in Russia.
In general, X5 Retail Group includes Pyaterochka, Perekrestok and Karusel supermarkets, of which more than 5,000 have already been opened. All these outlets are engaged in food retail. In today’s article, we will consider only Pyaterochka, the franchise of which has been available since 2009.
What is a franchise: a real example in 3 steps
Please note that X5 Retail Group has developed a special system for working with partners – a reverse franchise. What does it mean?
The franchisee receives the right to use the trademark, in return he pays a one-time fee. But at the same time, there are no royalties, and even vice versa – the entrepreneur regularly receives remuneration from the “parent” company. The amount of this fee depends on the store’s monthly income. The higher the turnover, the higher the reward.
The size of the franchisor’s incentive is 13-17% of the income of the Pyaterochka store for a month of work.
Another positive point is that all products for each Pyaterochka supermarket are brought from the warehouse of X5 Retail Group. What does this mean for franchisees? The amount of purchase costs is reduced, you can count on special prices, discounts and even credit.
The only thing that X5 Retail Group does not supply is alcohol and tobacco products.
Company card
| commercial brand | “Pyaterochka” |
| Activity type | Realization (retail trade) of food products |
| Realization (retail trade) of food products | CJSC Trade House Perekrestok, X5 Retail Group. |
| How many points of sale are already franchised | Four five |
| Number of own points of sale | 2625 |
| What investments will be required from the franchisee? | 8-22 million rubles |
| total amount | From 1 million rubles |
| Royalty | Not |
| Monthly income | About 500,000 rubles. |
| Recovery period | About 2 years |
| Company contacts | • +7 (495) 502-91-24; +7 (495) 502-91-25 • E-mail: fr@x5.ru • Website: https://www.x5.ru/ru |
“Pyaterochka” franchise – conditions for cooperation between the parties
On what conditions are the representatives of CJSC Trading House Perekrestok ready to work and what do they promise in return for the franchisee?
| Franchisor’s guarantees | Terms of cooperation for new partners |
|---|---|
| All activities of the new supermarket will be controlled, the main office will help prepare a package of documents, obtain a work permit from local authorities and inspection services. | It is desirable to have your own shop. Otherwise, you will have to conclude a long-term lease agreement. |
| The latest software to help you manage your business. | A new representative of the Pyaterochka network must have a clean credit history and only positive feedback in business circles. |
| Developed base of reliable suppliers. | Supermarket area: • Total area — 400-1100 m2; • The area of the trading floor is 300-800 m2. |
| The franchisor will pay your representative a monthly fee: 13-17% of the income from your point of sale. | Availability of parking, as well as an equipped entrance for suppliers of goods. The scheme of the unloading unit involves working with large machines. |
| The new owner of the Pyaterochka network will receive corporate contributions, which will need to be directed to the salaries of employees, tax deductions, and utility bills. | Convenient location with good traffic: residential area, close to public transport, intersections, etc. |
| The franchisee operates the store and all business income generated must be transferred to the X5 Retail Group account. | The presence of 2-3 telephone lines, electrical wiring must be ready for heavy loads. |
In what issues will X5 Retail Group provide assistance?
Pyaterochka is a franchise that will not only give you the right to use the well-known name of this brand. The company is ready to provide assistance on various issues, not only when opening a supermarket, but also in the future.
Also, when buying a Pyaterochka franchise, you get assistance in purchasing all the equipment for the trading floor, as well as for administrative staff (accountants, cashiers, security guards). All equipment will be purchased from trusted stores, which means high quality and a long-term guarantee from the supplier.
All recruited personnel will undergo training, and from time to time employees may undergo additional certification and knowledge testing.
Advertising products (window design, brochures, price tags), branded clothing, packaging are developed and provided to the entrepreneur by the main office of Pyaterochka.
Under the franchise, among other things, you will be helped to obtain a license to sell alcohol and tobacco products.
And even that’s not all. The Pyaterochka franchise seller will help the “ward” entrepreneur solve the following tasks:
- You will evaluate the facilities, prepare a budget for repairs and purchase of equipment.
- Control over the work of Pyaterochka, opened under a franchise, will be carried out constantly, and not only in the initial period.
- The software of the point will be connected to the general system of X5 Retail Group, so the supermarket will be periodically computerized.
The Pyaterochka franchise will help new team members succeed. However, this does not mean that you can open a point of sale without experience and initial investment. In addition, the required amount is quite large.
The cost of the franchise “Pyaterochka”
The minimum investment for opening a Pyaterochka franchise store is 8–9 million rubles.
What is included in this amount:
| total amount | 1 million rubles |
| Premises reform | 2.5 million rubles |
| Shop uniforms and equipment for staff | 1 million rubles |
| Refrigerators and other technical equipment | 2 million rubles |
| Shopping | From 2 million rubles, depending on the volume of the store’s turnover |
Monthly, the franchisee’s account will receive a financial return from the company: this is 13-17% of the store’s monthly turnover.
This money should be spent only on specific items of expenditure:
- 5% goes to staff salaries.
- 1% – payment of utilities.
- 1% – loss, damage and other unforeseen expenses.
- 1.5% – other expenses of the Pyaterochka supermarket.
The franchisor promises new network representatives that they will receive an income of 500,000 rubles per month. Of course, many factors influence a specific figure: the scale of the supermarket, its location, attendance, how competently the store is managed, how efficiently employees work.
After reading the reviews about the Pyaterochka franchisee, one thing can be said: in the first month, you can not count on big profits, but after a few months of hard work, your monthly turnover can reach 1 million rubles.
What documents are needed to start a Pyaterochka franchise business?
The Pyaterochka franchise is a great start in business. But before discussing the purchase of trademark rights, the entrepreneur needs to prepare some legal documents.
First of all, you need to register an individual entrepreneur or open an LLC. With the registration papers and some of the other documents we list below, you can go to meet the franchisor.
By agreement, of course, because the franchise may not be sold to you if management decides that you do not meet their requirements (listed above).
When registering, you must specify the appropriate OKVED activity code: 47.
The list of documents that will be needed when buying a Pyaterochka franchise:
- Franchisee’s passport, NIT (original and copy).
- Certificate of registration of an individual entrepreneur or legal entity, extract from the Unified State Register of Legal Entities.
- Application (sample 26.2-1) on the transition to a simplified taxation system.
- You must have documents confirming that you are registered with the Pension Fund and the insurance service.
Pyaterochka grocery store franchise.
How to buy a supermarket franchise?
Why is the Pyaterochka franchise not for beginners?
Each business project has its own advantages and disadvantages for the entrepreneur. We spoke about the advantages of working with the Pyaterochka franchise company above. This includes ongoing support, staff training and assistance with equipment purchases. And what are the cons and risks you expect?
According to the terms of the agreement, even with a minimum turnover, the network franchisee will receive remuneration, that is, even with a general loss, he will have something to pay for utilities and pay salaries to employees.
At the same time, to open a point, you initially invest only your own money, and this is a very impressive amount – about 10 million rubles. If the store turns out to be unprofitable and closes, no one will return these finances to you.
The Pyaterochka chain is already a brand, these stores are known and loved. Therefore, at least some buyers will be found in any case. But still this “at least some” is not enough.
There is a risk that your turnover will be very low and will cause the store to close for the following reasons:
- Wrong place. Before signing a franchise agreement, you should discuss with company representatives exactly where the point of sale will be located.
Experts should analyze the potential traffic and, if it does not suit the franchisor, find another floor with more traffic.
To select a good location, you can turn to the opinion of potential buyers: conduct a survey-research where residents of the city/district would like to see the new Pyaterochka supermarket. - Sometimes there are problems with local governments, inspection bodies. But if you carefully follow the requirements of the SES, the fire inspection, pay taxes, the difficulties will be resolved as soon as possible.
All goods in the store come from the company’s warehouse, they are strictly controlled, so there should be no delays. All staff undergo training and internships, for any violation (rude treatment of customers, negligence, theft) – a warning, a fine and dismissal.
If all these moments are under the control of the business owner, then the business will be successful. But for an aspiring entrepreneur to take on such a burden, especially if he does not have experience in retail, this is something from the realm of fantasy. And it will almost certainly fail.
Therefore, Pyaterochka is a franchise that is best suited for experienced entrepreneurs who are ready to invest large initial capital in a business.
