Krasnodar, Russia (August 19, 2024): Magnit, Russia’s largest retailer by store count, is set to launch franchises across most of its retail formats, from ultra-small stores to “convenience plus” supermarkets. This new business model aims to accelerate the Company’s expansion while providing partners with a stable income and the opportunity to elevate their businesses with the backing of one of Russia’s retail leaders.

Currently, Magnit is in discussions with potential franchisees, with the first franchise stores expected to open this fall.

Magnit is offering partners a reverse franchise model, which allows franchisees to use the Company’s brand and business model. In this arrangement, franchisees will act as agents selling Magnit’s products and will be responsible for the operational management of their stores, receiving support and expert guidance throughout the process. To facilitate this partnership, Magnit will provide franchisees with comprehensive analytics, assist in evaluating the effectiveness of store locations and their potential financial performance, and offer training on assortment management and responsible pricing. Additionally, the Company will support marketing efforts and ensure integration with its IT systems, along with training for franchisee personnel. The franchise stores are expected to mirror Magnit’s own retail outlets in terms of product offerings, pricing, marketing strategies, exterior design, etc.

Magnit’s franchise portfolio includes a variety of formats, such as Magnit GO kiosks, Magnit Nearby ultra-convenience outlets, Magnit Cosmetic drogeries, the flagship Magnit Convenience stores, as well as Magnit Convenience Plus, a hybrid format that combines the consumer-relevant features of proximity stores and supermarkets. Looking ahead, Magnit plans to introduce a franchise for its hard discount brand, V1.

Magnit’s multi-format franchise model offers flexibility in choosing franchisees and retail premises, with no strict size requirements. Suitable retail spaces can range from 50 to 1,000 square meters. Potential partners include individuals and entities in possession of commercial real estate through ownership or long-term leases, be it independent entrepreneurs or regional retail chains. Depending on the store format, the investment required to open a franchise will start at around 2.5 million rubles, with an average payback period of approximately 18 months. The retail chain anticipates opening more than 1,000 franchise stores in the coming years.

Evgeny Sluchevsky, Magnit’s Chief Executive Officer:

“The development of franchising will enable Magnit to accelerate its expansion efforts and enter regions where it currently has no presence. To spearhead this initiative, we have established a dedicated team of seasoned managers with extensive experience in FMCG franchising, poised to create the best offering in the market. The high potential of Magnit’s franchise is highlighted by the numerous inquiries that we had been receiving from entrepreneurs and businesses long before the official start. This interest means that many prospective partners will now have the opportunity to collaborate with Magnit and elevate their businesses. Moreover, shoppers will also benefit from this expansion, gaining greater access to a diverse range of products and the attractive pricing that Magnit is known for.”

Anatoly Makarov, Magnit’s Director of Retail Chain Development, Real Estate and Maintenance:

“The franchise program of Magnit boasts several key advantages, including a strong brand and the unique expertise of one of retail majors. We are developing a multi-format franchise model that provides us with flexibility in selecting locations and offers our partners lucrative terms of cooperation, such as eliminating deposits for goods. Our franchisees can range from small businesses to regional retail chains looking to elevate their operations by partnering with a leader in Russian federal retail.”

For more information about partnership opportunities and to apply, interested parties can reach out to fr@magnit.ru.

Magnit introduces franchising opportunities for its core retail formats