How can you become a franchisee?
If you look at the success of the franchise company, the question arises of how you can become a franchise partner yourself. However, before you can start negotiations with a franchisor, you should first get an overview of the various concepts. The franchise profiles of the individual partners are informative here. In addition to the choice of industry, the requirements that you as a franchisee must meet are decisive for the selection. The success of the franchise company also depends on this.
If the choice has been made and the basic requirements are met by the franchisee, an entry fee is due, which must be paid to the franchisor. The entry fee covers, among other things, brand awareness and network development, which are guaranteed by the franchisor. In part, the fee also includes the cost of the training courses that are offered or assistance with starting up the company. The amount of the entry fee is usually based on the stage of development and the service package of the franchise system. Although the amount of the entry fee is freely negotiated between the franchise partners in practice, most franchisors attach importance to equal treatment of the company founders.
In addition to the entry fee, there are also license fees for the duration of the operational cooperation, which are to be paid by the franchisee. The ongoing franchise fees include the usage rights that are made available to you as the franchisee. The rights of use can relate to the sale of a brand or a product range or a complete concept. The rights of use give the franchisee access to everything that is trademarked by the franchisor. This includes, for example, logos, advertising slogans, manuals, recipes and much more.
Use franchise portals for founding
There are numerous portals on the Internet where you can find all information about franchising. You can find out which concept suits you best and which business idea you would like to implement. On portals such as Punkt Franchise , DUB , Franchise Portal or Franchise Direkt you can filter by category, required equity, location or project and thus find the optimal system for you. You will also find information on existing franchising systems and current issues relating to the franchise.
The fast food chain McDonald’s laid the foundation for the modern franchise, but many other companies followed in the decades that took advantage of this distribution opportunity. There are now numerous well-known franchise systems in Germany that have established themselves on the market. Below is an overview of the most popular systems:
An overview of successful franchise examples
The bakery was founded in 1982 in the North Rhine-Westphalian Schwalmtal. With more than 500 locations, the chain is one of the top-selling bakeries in Germany today. More than 95 percent of Kamps’ branches and bakeries are operated by franchisees.
BackWerk is considered to be the inventor of the self-service bakery. The bakery was the first to successfully use self-service in its branches. The franchise company now has more than 300 locations in Germany, Austria, Switzerland, the Netherlands and Slovenia.
In 2004 Alfred Enzensberger started the pilot studio in Munich. Within a few years, the founder succeeded in converting the Cleverfit concept into a franchise system. The chain now includes more than 200 studios throughout Germany and the company has been able to win over renowned athletes as advertising faces.
With an annual turnover of more than 1.5 billion euros and over 1,300 branches, the Fressnapf retail chain is one of the largest franchise providers in Germany. The Fressnapf company was founded in 1990.
Europcar occupies the leading position in Europe in the car rental sector. The sales network includes more than 500 locations in Germany alone. The franchise company is represented in around 140 countries and has a fleet of more than 250,000 vehicles.
How can you find the right franchise system?
According to electronicsencyclopedia, more than 1,000 different franchise systems are offered in Germany. Due to the large selection, the search for the right franchise system can sometimes prove to be difficult. Even if the choice has been made for the industry, it is important to compare the offers of the providers. The following questions, among others, are important:
- Does the franchisor’s service package match your own ideas?
- Can you meet the franchisor’s requirements?
- What are the future chances of the franchise system?
- How is the franchise company’s market valued?
- Are the current franchisees satisfied with the services?
If these questions can be answered positively, then the conditions of the franchisor and the company’s image also play a role. Membership in the Deutscher Franchise Verband eV is an indication of a reputable franchisor. There you will also find relevant information on the subject of franchises. There are quite a few interesting ways to set up your own business with a franchise without equity .
Future opportunities of the franchise concepts
Anyone who opts for a franchise company naturally also wants to be able to assess the future prospects of the system. Basically, it can be said that the franchise systems are in many cases much more competitive than other companies, as they can even compete with large competitors. In addition, the franchise is on the advance across all industries.
Furthermore, the advantages of the form of distribution speak in favor of the franchise system. The concept has proven to be extremely successful for many decades, especially in retail and catering. But the marketing of products is also much easier through franchising, as you benefit from a large network here. The modern franchise now also includes other forms, such as home-based business, which can be operated from home. The multi-unit franchise, in which the franchisee is given the right to set up several companies in one region, is also becoming increasingly common.
Regardless of whether you want to set up a franchise company or a classic business start-up. The step into self-employment is always associated with a certain risk. However, with the franchise you benefit from a tried and tested concept that is made available to you by the franchisor. In this context, you will also receive assistance in setting up the company, which will make it much easier to establish yourself on the market.
However, the franchise should not be viewed as an “easy way” to start a business. Like everything else, even the best system has its drawbacks, as we have already mentioned above. Should you nevertheless consider the franchise, then around 30 percent of the total investment costs should be raised from equity. If the share of own funds is lower, the entrepreneurial risk increases and a rejection by the franchisor and the credit institutions is more likely.