Trends of Franchising Focus Reading »

Trends of Franchising Opportunities

Franchising is profitable, provided you plan and partner with the right entities so as to leverage its true potential. Franchising, we recognize, facilitates expansion without the burden of huge outlays of capital.

Two types of franchising have gained popularity across the world, namely:

• Trademark franchising
• Format franchising

In trademark franchising, a franchisee acquires the identity of the franchisor through the product or trademark and functions as an independent distributor. In format franchising, the franchisor sells the franchisee a product/service within a set format. In this type of franchising, the franchisee does not enjoy autonomy in a wide range of areas such as working hours, product pricing, and supply of inputs, payments and promotions. Interestingly, during the mid-1980s, this form of franchising gained unprecedented growth across Europe, UK and the US.

Online Franchising Opportunities in Europe

Europe has always been a knowledge-centric, growth-intensive continent. Known for fostering a culture of innovation and a systematic utilization of its knowledge based assets, this is the most fertile region for online franchising opportunities spanning numerous region-specific domains. Affluent European countries like Hungary have become more conducive to franchising opportunities. In fact, 40% of franchises in Hungary are owned by foreign franchisors such as Kodak, Pizza Hut, McDonalds and so on. Studies on franchising trends in Hungary indicate that these foreign franchisors are earning solid revenue by selling sub franchises and setting lower franchise fees.

Further, the European Union (EU) has contributed significantly to boost franchising initiatives spanning many domains. The adoption of the Euro has triggered greater transparency in pricing and in establishing an efficient, competitive environment. Unlike in the US, some parts of Europe are affected by language and cultural barriers although the continent is a hotspot of dominant technology innovations.

Varied Legal Specifications for Franchising Across the World     

In today’s business environment, there are varied legal specifications that are set by most European countries. Countries like Spain, Romania and France require a franchise disclosure document to be delivered to the prospective franchisee before finalizing the franchise agreement. In fact, a failure to deliver the disclosure document is a quasi criminal offense in France, subjecting the violator to a hefty fine. In Australia, the franchise disclosure documents are highly extensive and exhausting.