Why Food Franchises Are Thriving in Eastern Europe’s Secondary Cities

Why Food Franchises Are Thriving in Eastern Europe’s Secondary Cities

When people think of franchise growth in Eastern Europe, the focus often lands on capital cities—Warsaw, Bucharest, or Prague. But lately, the real story is unfolding elsewhere. From Cluj-Napoca in Romania to Gdansk in Poland and Novi Sad in Serbia, smaller yet dynamic urban centers are emerging as hotspots for food franchise expansion.

So, what’s behind this trend? And how can franchisors tap into these rising stars without getting lost in translation?

The Rise of the “Second City” Opportunity

Secondary cities in Eastern Europe have undergone major transformation in the past decade. Local governments have invested in infrastructure, tech parks, and cultural revitalization. As a result, these cities now boast growing populations, expanding middle classes, and increasingly cosmopolitan lifestyles.

Cluj-Napoca, for example, is often called the "Silicon Valley of Romania" due to its booming IT sector. That economic prosperity has fueled a surge in consumer spending—especially in food and dining. Similarly, Gdansk, a coastal Polish city with a rich history and vibrant tourism industry, has become a magnet for international brands looking to avoid the competitive saturation of Warsaw.

Fast Food and Casual Dining in High Demand

In these emerging urban hubs, food franchises—particularly fast food, fast-casual, and coffee chains—are flourishing. Consumers in these cities are looking for modern, affordable dining options that mirror Western trends, without needing to travel to the capital.

McDonald’s and KFC have already made strong moves in these markets. But newer entrants like Five Guys, Papa John’s, and regional upstarts like Green Taste (plant-based quick service) are now claiming market share.

“People want experiences they see online—on TikTok or Instagram—and they expect to find those same global names in their cities,” says Aleksandra Wisniewska, a food industry analyst in Gdansk. “It’s no longer enough for brands to be present in just the capital.”

Lower Costs, Higher Potential

From a franchising perspective, secondary cities offer significantly lower real estate costs and employee wages, making them a cost-effective option for expansion. For example, commercial lease rates in Novi Sad are often 40% lower than in Belgrade, but the city still has a robust student population and lively cultural scene.

Combine that with less competition, and you’ve got a highly attractive ROI scenario for early movers.

Moreover, local municipalities in cities like Cluj and Gdansk have shown willingness to support franchise businesses with streamlined permit processes and investment incentives, especially if those franchises create local jobs.

Local Tastes Meet Global Concepts

While these cities are open to international brands, franchisors must understand that localization is key. A “copy-paste” model that works in New York or London might fall flat without adaptation.

For instance, successful chains in Romania have found that menus featuring regional ingredients—like local cheeses or traditional sauces—perform better. Similarly, in Novi Sad, operators noticed higher sales when offering pork-free or vegetarian options, appealing to the city’s mixed demographic.

Franchisees who balance brand consistency with cultural flexibility often find the most success.

Tips for Franchisors Entering Secondary Cities

  1. Partner with local operators: They understand neighborhood trends, hiring needs, and bureaucratic nuances.

  2. Invest in pre-entry research: Survey consumer preferences, peak traffic times, and dining habits before setting up shop.

  3. Market hyper-locally: Leverage social media influencers, sponsor university events, and integrate with local festivals to raise visibility.

  4. Plan for long-term scalability: Cities like Cluj and Gdansk are growing fast—design operations to grow with them.

What Lies Ahead?

As capital cities reach saturation and rents skyrocket, secondary cities will continue to rise in relevance. We can expect to see:

  • More regional franchise formats taking off, like Balkan grill concepts, bakery cafés, and healthy meal prep services.

  • Tech-enabled delivery models tailored to smaller urban zones.

  • Smart expansion by brands using secondary cities as testbeds for innovation before scaling across the region.

Eastern Europe’s “second cities” are proving they’re not second-rate when it comes to franchise opportunity. For savvy brands willing to adapt, the rewards can be substantial—and long-lasting.

Got your eye on Eastern Europe? Secondary cities might just be your smartest first move.