The franchisor brands in different sectors both provide employment to 250 thousand people and offers a $ 43 billion market share in Turkey. Furthermore, the franchise sector showing a growth momentum day by day, received a blow by coronavırus. When franchisor brands unable to carry out their work during process, whose turned to take-away service could not get close to the turnover of a normal day. We talk this problems and solutions of Franchising sector with UFRAD President Assoc. Prof. Mustafa Aydın.
How did the coronavirus affect the franchise sector, as affect the whole world economy?
The retail industry and our brands were seriously affected by this process. Franchise brands are either in shopping malls or are big street stores in terms of their location. These are the places that will carry the brand. However, as is known, almost all of the shopping malls have been closed. Opened ones are working with %10 capacity. The people are afraid to go out, therefore street shops are faced with the same situation. The brands are grappling with serious problems in order to survive. They are unable to meet their obligations on both rent and salary for their employees.
If we look at the measures taken in Turkey on economic measures adequate? What kind of demands do you have as UFRAD?
We notified our demands to both the Ministry of Finance and Trade. We requested this situation to be regarded as force majeure. Rents can not receive at least 3 months. Another request of ours was for our employees. We especially demanded that their social rights be supported by the state. When the brands open their stores, there is need life line support in order to come alive of them. Our brands that have not any business for 3 months, would not catch their old turnover for more 3 months. The reset of this epidemic process will find the end of autumn. People will take to the streets nervously. For this reason, we want zero-interest support on behalf of brands. The brands are not only within national borders, also biggest power for international competition. You should also market a product you produce in the international arena. For this reaoson, you should keep alive the brands. Our goal is to export 500 billion dollars. Export should be done with brands. So, the state should keep alive this brands. If we kill them, we can neither compete in local nor international markets and if we can not compete, have to import everything.
You frequently make evaluations with industry representatives. What are your suggestions for brands to overcome the process with the least damage? What kind of steps should brands take especially in digitalization from now on?
This process will not reset, immediately. I announce to all sectors, they should make long-term plans. I mean, they should move this process will continue TO December,2020. Even if the stores opened, people do not run for shopping as before, and they will act nerveous. Now we have to prepare ourselves to go to the customers' feet. One of the way is digitalization. Now people will eat before they go to the store; will receive education before go to the universities. The world will no longer be squeezed between stone walls. Online shopping start to enter into sector. It forces us to digital transformation. Sector representatives must complete their digital infrastructure. The other issue is that they must make long term calculations. We may not be able to receive our receivables immediately. We should do the economic planning accordingly.
Does the post-virus franchise system transform? Considering the high rents, will brands meet with consumers only on the internet instead of opening a shop?
The brands that being forced continue, will choose this path. However, although people will order from digital platforms, they will want to buy certain products by going to the store and trying them by touching them. So both methods will continue. Street merchandising and the stores in shopping malls will survive, but their business will not be as busy as before. Because, we offer alternative to people. “We said, "It is possible to order from a distance, it is possible to have distance education." This alternative will emerge more strongly after the coronavirus.
The high rents of shopping malls were subject of debate in this process. You have also called to the shopping malls "Let no rent for 3 months, we expect 50 percent discount in the next 3 months". How does this process affect leases in shopiing malls?
As UFRAD, we have created a series of measures. We trasmitted these measures with the relevant ministries. We propose subjects of rent, providing social support to our staff and short-time working allowance for the agenda. This process will not end suddenly, even if shopping malls are opened. The businesses of brands will not open up suddenly, because people will approach with anxiety. We define that this situation is a force majeure with the opinions we received from lawyers. I would also like to call the property owners from here; please take steps for brands to live. If you kill the brands, how can you find tenants? Property owners must keep their customers alive. We tell them, think reasonable here. No rent for 3 months and 50 percent discount for the next 3 months. We have notified our Ministry of Finance in writing. However, doing an application by law does not suit our society. Property owners must fulfill this demand without waiting for the enactment of the law and by approaching with common sense. We need to continue this process in a logical and fair way. We shouldn't say 'I'll get my money, whatever you do'. We need to keep your customers alive. If you kill your customer, namely brands, you can neither find a brand to rent nor sell your product. Our government should support those working in the franchise sector. Brands are having trouble paying employees' wages as well as rents. We expect support from our state in this regard.
Besides being a business person, you are also an academic. We also want to touch education a little. How does distance education affect private schools and their staff?
With this crisis, MEB and YÖK quickly took action and transformed for distance education. This incident showed us how strong the infrastructure of educational institutions in our country. All of our educational institutions could quickly adapt to the system. Our friends have corrected the shortcomings of the students in order not to be harmed. Turkey was already not far from the online training. We were providing some of their programs as distance education. We took this even further.
Will education resume on after vırus? Or will there be a digital transformation in education as well?
Even if online education cannot dominate the entire education sector, it will find a place. Formal education has a completely different place. However, some lessons will be in distance education as an alternative. The distance education is an important part of education after coronavırus. If education in Turkey can not adapt this digital transformation, they can not alive.
Turkey have $ 5 billion input from international students in the past academic year. So, how coronavırus affected the education export?
There were 178 thousand foreign students in Turkey, this year. $ 5 billion input entered to Turkey thanks to these students in 2019- 2020 years. Some of this input is input into sectors such as real estate, some in retail, some in transportation and some in tourism. So what happened now, about 50 percent of these students left our country. Some of them are looking for ways to leave. Some could not pay their dues. Therefore there is a troubled process. Currently, approximately 2.5 billion dollars of this 5 billion dollars have entered the sector. This problem will continue in the next year. Because the effect of the virus will not end immediately. We cannot promote now. All universities were promoting by participating in fairs abroad. There is no promote at the moment. The number of foreign students coming to Turkey will decrease. Even take care of the current student is a great achievement. Next year, this entry will remain at $ 3 billion. We take measures in this regard. We requested an incentive from our Ministry of Trade. We asked the Ministry of Internal Affairs Immigration Administration to facilitate the residence of foreign students. We made an application to the Ministry of Foreign Affairs for visa convenience. Our goal in education exports is to provide 15 billion dollars input. The education economy in the world is 300 billion dollars.