Russia

The Russian Federation is located in Northern Asia bordering Europe to the West, the Arctic Ocean to the North, the North Pacific Ocean to the East, and Mongolia, Kazakhstan, and China to the South. It is almost double the size of the US and covers an area of 17,075,200 sq. kilometers making it the largest country in the world.  Russia’s total population is about 143 million and shrinking at about 0.02% with 73.8% living in urban areas.  The Russian capital of Moscow has a population of about 10.4 million with other major cities including St. Petersburg (4.6 mil), Novosibirsk (1.4 mil), and Nizhniy Novgorod (1.3 mil). The people are governed by federation and are an even split of non-believers, non-practicing believers, Russian Orthodox and Muslim. The primary language is Russian, but due to the enormous size of the country many minority languages are spoken as well. The local currency used is the Russian Rubble.

The Russian economy is a strong export economy based heavily on the exports of oil and other raw materials.  Corruption is a big concern with the Russian Federation and legal and economic reforms are still in progress with hopes to improve the attractiveness of foreign investment. Its main trade partners are Germany, Netherlands, China, Italy, Ukraine, Japan, US, Belarus, Turkey, and South Korea. Its primary imports are vehicles, machinery and equipment, plastics, medicines, iron and steel, consumer goods, meat, fruits, nuts, and semi-finished metal products. Exports consist of petroleum and petroleum products, natural gas, wood and wood products, metals, chemicals, and a wide variety of civilian and military manufactures. Russia’s GDP (Purchasing Power Parity) is $2.55 trillion and is growing at a real rate of 3.4% with an inflation rate of 5.1%. Russia ranked 112 out of 185 countries in the World Bank Group’s Ease of Doing Business Ranking mostly due to concerns with corruption and tight government controls on business.

Disclosure laws: Franchising Laws Overview 

• None.

Relationship laws: 

• Franchisor must:

• Provide franchisee with operations manual or other documentation

• Provide ongoing assistance

• Supervise the quality of the goods manufactured by the franchisee

• Franchisee must:

• Ensure that goods the franchisee manufactures conform to franchisor’s quality standards

• Conform with franchisor’s uniformity standards

• Provide to its customers all additional services that would be expected if the customer purchased directly from the franchisor

• The franchisor shall be “subsidiarily liable” for claims made by third parties against the franchisee relating to the quality of the goods and services sold by the franchisee.

• The franchisor is jointly and severally liable for claims against the franchisee as the manufacturer of goods sold under the contract

• If the franchisee has been in compliance, it has the right to renew the contract.

• The franchisor may refuse to renew it, provided it does not grant a franchise to a third party, for the same territory for three years

• If the franchisee dies, the franchise will be transferred to the franchisee’s heir, provided that the heir registers within 6 months.

• If the franchisor changes its brand to a new brand, the franchisee will have the option to terminate and may claim compensation for its losses.

• If the contract is not terminated, the franchisee may demand a reduction in fees.

• If the franchisor changes its brand to a new brand, the franchisee will have the option to terminate and may claim compensation for its losses.

Registration laws: 

• Registration is required.

Click the links below for articles with more information on Franchising in Russia

Doing Business in Russia (2012)

Franchising Laws - Russia (2010)

* CPI Score is published by Transparency International and relates to the perceptions of the degree of corruption as seen by business people and country analysts and ranges between 100 (highly clean) and 0 (highly corrupt).  

**Ease of Doing Business Ranking is determined by the World Bank Group and is ranked out of a possible 185 countries. www.doingbusiness.org  

Most recent statistics have been taken from the CIA World Factbook unless noted otherwise. 

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