Subject The article addresses the economic relations related to the development of franchising. Objectives The objectives are to identify key problems of using franchise for small and medium-sized businesses' development in Kazakhstan and possible solutions for its further application based on the NS factor model. Methods We applied a systems approach to generalize best practices, methods of comparative analysis and grouping. Methods of economic-and-statistical and structural-dynamic analysis were employed to assess the deliverables of franchise introduction in Kazakhstan and feasibility of applying the NS factor model to calculate its efficiency. Results We unveil the key reasons for a rapid growth of franchise, reveal international trends in the franchise market, which definitely influence the franchise sector of Kazakhstan. Conclusions Apparently, franchise is rather beneficial for Kazakhstan's economy as it contributes to solving many problems of the country, like priming of economy through promotion of entrepreneurship, increasing the number of active small and mid-sized business entities and accordingly, their share in the country's GDP, creating new jobs, developing foreign trade and attracting foreign investments through international franchise, etc. To analyze investment activities in the stock market and calculate operating efficiency, including franchise, we propose using the NS factor model. Another important factor, which helps foreign franchisers to enter the Kazakhstan market is the country's accession to the Customs Union and World Trade Organization.
Keywords: franchise, small and medium-sized business, start-up capital, investment, NS factor model
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