Russia

The economic crisis that struck all post-Soviet countries in the 1990s was nearly twice as intense as the Great Depression in the countries of Western Europe and the United States in the 1930s. Even before the financial crisis of 1998, Russia’s GDP was half of what it had been in the early 1990s. Since the turn of the century, rising oil prices, increased foreign investment, higher domestic consumption and greater political stability have bolstered economic growth in Russia. The country ended 2007 with its ninth straight year of growth, averaging 7% annually since the financial crisis of 1998. In 2007, Russia’s GDP was $2.076 trillion (est. PPP), the 6th largest in the world, with GDP growing 8.1% from the previous year. Growth was primarily driven by non-traded services and goods for the domestic market, as opposed to oil or mineral extraction and exports. The average salary in Russia was $640 per month in early 2008, up from $80 in 2000. Approximately 14% of Russians lived below the national poverty line in 2007, significantly down from 40% in 1998 at the worst of the post-Soviet collapse. Unemployment in Russia was at 6% in 2007, down from about 12.4% in 1999.

Demographic Data

Economic Data

Cultural & Other Data

GDP (PPP, $bn)

2225

Capital

Moscow

Area (sq. km.)

17,075,200

GDP Real

Growth (%)

6

Other Large Cities

St. Petersburg, Novosibirsk, Nizhniy Novgorod

Population (million)

140

PerCap GDP ($)

15,800

Primary Language

Russian

Population

Growth %

-0.467

Prime Lending

Rate (%)

13

Urban

Population %

73

% Population

Under 15yrs

14.8

Inflation Rate%

13.9

Urban Growth %

-0.5

Population below

poverty line (%)

15.8

Unemployment%

6.2

Literacy

(% of population)

99.4

Agricultural Workers

(% of population)

10

Foreign Direct

Investment($bn)

491.2

Education spending

as % of GDP

3.8

Industrial Workers

(% of population)

28

Debt-External

($bn)

527.1

CPI Score

(1-10)*

2.1

Service Workers

(% of population)

62

Exports ($bn)

476

Corporate Income Tax %

20

Labor Force (mil)

75.7

Imports ($bn)

302

Ease of Doing

Business Ranking **

120

CURRENCY EXCHANGE RATE

05/28/09 $1 = 31.2 RUB

Franchising Laws Overview

Disclosure laws:

  • 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.
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