Strongest Growth Sub-Sectors automotive, construction, child-related, fitness, pet care, senior home care and business service franchises.
Future Growth Areas Health & Beauty, Lifestyle and Entertainment franchise offerings.
Franchising in the U.S. 1997 to 2007 $1.53 trillion 50% 767,000 18 million $250 billion 30% 450,000 4 million Sales Revenue % Retail Sales Network Units Number Employed 2007 1977
International Franchising
U.S. Franchisors lead on International Expansion
20% of all American franchisors go global
Half of all units established are outside the U.S.
Enhance Reputation & Credibility In Domestic Market
Become a Multicultural Organization
Contribute to Economic Development in Foreign Countries
Why Europe?
Market Size 728m Consumers!
Growing Demand for High Quality Products and Services
Mix of Mature & Developing Markets
Demographics & Diversity of Cultures
Development of Retail Infrastructure
Availability of Local Finance
European Franchising Marketplace
7,000 Franchise Systems
With 250,643 Units
85% of Franchise Concepts are Indigenous
Growth - 33% over last 10 years.
Source: European Franchise Federation Survey 2004
Americas Top Franchises In Europe Source: www.franchisedirect.com ERA Real Estate 41 Subway 38 UPS Store/Mail Boxes Etc. 37 KFC 35 Century 21 31 ChemDry 27 Pizza Hut 25 Sylvan 18 Novus 16 Remax Intl Inc 8 Burger King 3 McDonalds 1 Company Ranking
D evelopment of Franchising By Country Source: U.S. Commercial Service 2007
Franchising Across Europe Source: EEF - 2004
Germany and UK lead on number of Domestic Systems followed by France, Italy and the Netherlands
Lead Exporters of Indigenous Brands France, Germany, UK
Lead Importers of Foreign Brands Denmark, Belgium, Austria
Highest Growth Markets include Sweden, Hungary, Spain, Netherlands and Ireland.
Greatest turnover recorded by Germany and the UK
Impact of American Franchises in Europe Source: U.S. Commercial Service - 2007
Legal Aspects of Franchising Country Specific Laws
France Statutory Disclosure Requirement
Italy Franchise Law 2004
Lithuania Statutory Franchise Regulation 2000
Romania Law regarding the legal status of a Franchise
Spain Specific Disclosure and Registration Legislation
Legal Aspects of Franchising Other Important Considerations
Check out Country-specific Laws by Industry Sector
Germany High Degree of Protection
Poland Polish Civil Code
Greece Lack of clarity (use of land & buildings)
Belgium New Franchise Law under consideration
Disclosure & Relationship Laws Albania, Georgia, Moldova and Romania
Relationship Law Belarus, Russia and Ukraine
Take a Strategic Approach Where to Go?
Establish Market Demand
Development of Franchising & supply of Franchise Investors
Economic, Political & Commercial Assessment GlobalVue
Degree of Cultural Diversity & Language Differences
Ease of Travel
Banking System Availability of local Finance
Communications & Technology
Competition Where are your competitors going?
Franchising QuickTake!
How to entry Europe?
Market Entry Strategy
Master License, Area Developer or Regional Developer, Multiple/Single Units?
Geography, market, product/service and resource issues
Nuances of Individual Countries
Seek Advice local Franchise Associations
Pilot Units a Recipe for Success
TOP TIPS
Adapt to Local Market
Invest in Market Research
Test Transferability & Receptivity
Invest in Pilot Project
Protect Trademarks
Refine Candidate Profile
TOP TIPS
Internationalize Materials
International Webpage
Formulate Realistic Fees
Encourage Prospects to talk to Franchisees
Conduct Due Diligence on Prospects
Devise Realistic Development Schedule
Hire Translators
TOP CONSIDERATIONS: Cultural & Business Differences
Introduction to signing.
Dont frighten prospects away.
Time for a sandwich?
Dont rush things.
Their email must be down!
THE CHALLENGES Barriers to Franchise Entry in Europe Source: NatWest Bank
EAST VERSUS WEST: Challenges in the EAST
Relatively smaller markets
Royalties higher than competitors
Actual and psychological distance
Availability of real estate
Lack of brand awareness
Experience required!
EAST VERSUS WEST: Challenges in the WEST
Difficult to obtain operating licenses
High cost of real estate
Local regulations can be strict
Entrepreneurial culture
Finding the right partner!
LEVEL OF OPPORTUNITY Source: U.S. Commercial Service 2007
GOOD
Austria, Belgium, France, Germany, Slovakia, Spain, Sweden, Switzerland, United Kingdom.
VERY GOOD
Greece, Portugal, Romania, Serbia.
HIGH
Finland, Ireland, Turkey
BEST PROSPECTS Source: U.S. Commercial Service 2007 1 Entertainment 2 Interior Design, Laundry/Dry Cleaning, Recruitment,Security & Environment 3 Training Services, Express Delivery 4 Automotive, Hotel, Travel & Car Rental 5 Apparel/Fashion 6 Health & Fitness, Cleaning, Maintenance 7 Real Estate, Senior Home Care, Children/Education 8 Beauty & Personal Care 10 Business Services 12 Food/Restaurant No. of Countries Sector
