Franchise in the mail
By Timothy Sifert
Joining the growing ranks of franchising systems in the country, Mail Boxes Etc. (MBE), the world's largest franchisor of retail shipping, postal and business service centers, plans to carve out a substantial local market position. It will provide shipping, postal, packaging and printing services to retail and business customers and will launch its franchising operations at the beginning of November.
The US-based MBE, which is wholly owned by shipping giant United Parcel Service (UPS), has set targets to open seven franchise stores per year, introducing operations via its pilot store in Katowice.
Company executives are optimistic about the country's business prospects, because of the lack of local entities that provide a "one-stop-shop" for retail and small and medium enterprise clients in need of printing, packaging, shipping and related services. According to Dariusz Babiarczyk, director of sales and marketing, there is a particular need for packaging services - whereby customers have their belongings professionally wrapped and sealed. What is more, there is no competition on the market.
But, of course, competition level is a good yardstick by which to measure the health of any market. As such, one of MBE's major competitors in the US, Nevada-based PostNet, also plans to set up shop in Poland and elsewhere in Central Europe.
"We are actively searching for new partners," says Axel Wenger, vice president of international development at Post-Net. "Next year we will certainly devote ourselves to local partners and evaluate the entrance strategy. We would definitely like to enter in the next year."
Wenger commented on Central Europe in general, but noted Poland as the largest market in the region, and sees it as a potential franchising hub out of which the company could service the region. MBE predicts less competition than might be expected in a market that includes Poczta Polska, EMS Pocztex, Fedex, UPS and DHL. But Babiarczyk says that the company plans to act as a partner with existing mail-oriented companies by, for example, acting as a broker for shipping services. At present, it has broker deals signed with EMS Pocztex, Fedex, UPS and it is planning one with DHL.
At the same time, it would directly compete with Poczta Polska in providing mailboxes. But, Babiarczyk says that MBE provides more services than the state-owned mail's PO Box system. Other than that, the law protects Poczta Polska's monopoly in certain areas that MBE would never be able to attack. Additionally, MBE is promoting its ability to offer a next-day shipment service in Katowice as late as 7 p.m. whilst other companies cease their services at 4 p.m.
Poland has a growing market of franchising systems, which include national and international players McDonald's, Kodak Express, EF English First and TelePizza. Franchising consultancy PROFIT System estimates that by year-end there will be 150 franchised companies in the country. While that's a far cry from the 671 counted in the UK in 2001, it reflects a substantial growth since the first was introduced in 1989.
According to franchisees, part of the reason franchises have been a relative success in Poland is that they allow entrepreneurs to employ tried and true business models as their own. Indeed, Babiarczyk says one potential MBE franchisee has owned a franchise in America and now wants to try his or her hand in Poland.
PostNet at present is looking for partners in Poland with as much as $350,000 in capital to start up a company and provide working capital. Potential partners, Wenger says, would have to have business expertise and a roster of contacts in the region.
