The franchising of business concept is more than just a relatively simple way to help companies grow rapidly within their own countries; it is also an ideal tool for tapping foreign markets with established, successful systems. Today, there are more than 12,000 different franchise systems worldwide that are operated by over 800,000 franchisees.
The German franchising industry is also benefiting from this development; it has been growing more rapidly than the overall economy for years, and in 2015, it recorded gains of more than 4 percent. Germany’s large population and steadily growing purchasing power make it particularly attractive for foreign investors, who primarily have their roots in the service industry. Moreover, the German government views franchising as an engine that drives the establishment of businesses and livelihoods in Germany – a cause that it fully supports.
- Forecasts show, the turnover generated by the German franchising industry will already exceed EUR 100 billion in 2016.
- The number of franchising systems operating in Germany is still relatively low compared to other countries: In France, for example, the number of franchisors is 40 percent higher than in Germany.
- Around 20 percent of new systems in Germany come from overseas.
- The majority of the franchising concepts active in Germany have less than 50 partner companies and are often not represented throughout the country.
- Multi-brand franchising is still relatively unknown, but it will become more important in the future.
- Around three quarters of the German labor force has vocational training or a university degree. This allows franchisees and franchisors alike to find highly qualified personnel at all times.
- The industry in numbers
Torben L. Brodersen, Managing Director German Franchising Association (DFV) | © German Franchising Association (DFV) “The level of internationalization in the German franchising industry is still quite low in comparison to other European countries, which means that Germany offers numerous attractive market entry opportunities for foreign franchising systems.”
The industry in numbers.
- The turnover generated by the German franchising industry grew by 4.3% in 2015 to reach a total of EUR 99.2 billion.
- In 2015, almost 1,000 franchisors operated in Germany.
- Approximately 118,000 independent franchisees employed more than 686,000 people in 2015: an increase of more than 25% as compared to 2012.
- In 2015, 39% of franchise systems in Germany were in the service sector, followed by retail with a share of 31%, food service and tourism with 20%, and skilled trades with 8%.