Franchising’s fans grow in Czechia, in Country Profile
The Czechia flag combines the white and red colors of Bohemia with blue from the arms of Moravia. It is identical to the flag of the former Czechoslovakia.
Location: The Czech Republic, which changed its short-form name to Czechia in 2016, is in central Europe, surrounded by Germany, Poland, Slovakia and Austria.
Language: Czech (official)
Total Population: 10.7 million
Government: Parliamentary republic
Religion: Nearly 90 percent say either their religion is unspecified (54%) or they don’t subscribe to a particular doctrine (34.5%). Just over 10 percent say Roman Catholic.
Economy: With one of the highest GDP growth rates (3.5%) and lowest unemployment levels (2.8%) in the European Union, Czechia is a prosperous market economy. But its dependence on exports—particularly automobiles, the country’s single largest industry—makes it vulnerable to decreases in external demand. Since the Velvet Revolution of 1989, when what was then called Czechoslovakia freed itself from communist control, foreign investment has played a significant part in boosting Czech productivity. The U.S. has played an important role in this regard, and as of 2015 was the third largest non-European investor in the country.
Ranking note: Czechia ranked No. 1 in Central and Eastern Europe in business sophistication and efficiency enhancers and number two for macroeconomic environment and innovation in the 2016/2017 Global Competitiveness Report. The country has a Tier 3, or “innovation driven” economy, placing it on the same level as Germany. As such, it is very receptive to leading edge U.S. technology products and services.
GDP (official exchange rate): $209.7 billion
Currency: Czech koruna (conversion rate at press time: 1 CZK equals $.049 USD).
Franchising in Czechia: Since the country’s accession to the European Union in 2004, franchising’s popularity and success continue to grow in the Czech market. In 2016 there were 280 franchised brands, 42 percent of them foreign, according to the Czech Franchise Association. The Czech legal system places no barriers to entry and operation of a franchise, and while the market for food franchises has slowed some, best prospects include healthcare, beauty and wellness services, real estate, and retail apparel/fashion.
Cultural notes: Typically more reserved than Americans, Czechs don’t always smile as a social greeting and a serious demeanor is regarded as a sign of respect for visitors and business. As a small country where industry leaders know each other well, word-of-mouth reputation is extremely important and news—good or bad—can spread quickly.
Ease of doing business ranking by World Bank: 30, down three spots from 2017.