Franchising in Emerging Markets: Why Eastern Europe Is Gaining Global Attention

Franchising in Emerging Markets: Why Eastern Europe Is Gaining Global Attention

As global franchise networks search for their next big opportunity, Eastern Europe is fast becoming a magnet for international expansion. Countries like Poland, Romania, and the Baltic states (Estonia, Latvia, and Lithuania) are attracting high-profile brands looking to grow in dynamic, yet relatively untapped markets.

But why now—and why here?

A Strategic Region with Room to Grow

Eastern Europe sits at a unique intersection of affordability, location, and upward consumer trends. Unlike saturated markets in Western Europe or North America, many parts of Eastern Europe still offer significant white space for international franchises—especially in food service, fitness, education, and specialty retail.

Poland, the region’s largest economy, has become a particular hotspot. With a growing middle class, strong GDP growth (projected at over 3% annually by the World Bank), and increasing urbanization, Poland presents a fertile ground for scalable, consumer-facing businesses. McDonald’s, KFC, and Starbucks have already planted deep roots, but new players like Popeyes, Five Guys, and Domino’s continue to enter with enthusiasm.

“Franchise saturation is nowhere near Western levels,” said franchise consultant Mateusz Nowak from Warsaw. “Brands can still find first-mover advantage in key secondary cities.”

Cost-Effective Expansion

Compared to Western Europe, Eastern Europe offers lower operational and labor costs, which can dramatically reduce the investment needed to open and operate a franchise unit. For brands seeking to grow without burning through capital, this makes Eastern Europe an appealing proposition.

According to data from the European Franchise Federation, average startup costs in Romania or Bulgaria are 20–40% lower than in France or Germany. The workforce is highly educated, especially in cities like Bucharest, Vilnius, or Kraków, where English proficiency and digital fluency are high among young professionals.

A Taste for International Brands

Consumer behavior is also shifting rapidly. Millennials and Gen Z in Eastern Europe are increasingly drawn to global lifestyle brands—especially in food, fashion, and fitness. Whether it’s grabbing a quick burger from a U.S. chain or signing up for a membership at an international gym brand, younger consumers are embracing Western experiences.

Take Xtreme Fitness Gyms, a Polish-born brand that has expanded rapidly throughout the region. At the same time, brands like Burger King, Krispy Kreme, and Papa John’s are all accelerating growth in cities like Sofia, Tallinn, and Cluj-Napoca.

This trend is aided by social media, travel, and a general desire to “catch up” with global trends after years of economic and cultural lag behind Western Europe.

EU Integration & Business Reforms

Many Eastern European countries are now part of the EU, giving international franchisors a single market framework to operate within. That means access to consistent legal protections, IP rights enforcement, and harmonized trade rules. Even non-EU countries like Serbia or Ukraine (in process of alignment) are introducing reforms to attract foreign investment and ease business operations.

In Romania, for instance, new legal frameworks have made franchise registration and IP protection significantly smoother, encouraging brands like JYSK, Subway, and Intersport to scale rapidly.

Challenges Still Exist

Of course, no emerging market is without risks. While the long-term growth potential is substantial, international franchisors must navigate:

  • Currency fluctuations and inflation, especially in non-eurozone countries.

  • Cultural localization: what works in Paris might not fly in Poznan.

  • Infrastructure gaps in rural or less-developed areas.

However, many of these challenges are being offset by savvy local partners and robust franchise support structures.

What’s Next?

The next wave of expansion is likely to include:

  • Premium fast-casual dining: Brands offering healthier, more upscale dining are in demand.

  • Education and childcare franchises: As dual-income families grow, the need for after-school and early learning programs is rising.

  • Home and beauty services: From lash bars to interior décor consultancies, lifestyle franchises are seeing a boom.

Eastern Europe’s rising stars—like Poland, Romania, and the Baltics—are no longer “emerging” markets in the traditional sense. They are evolving into mature, strategically vital regions that global franchisors can no longer ignore.

Whether you’re a franchisor eyeing expansion or an investor seeking high-potential territory, now may be the time to look East.