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Franchising Opportunities

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    • FRANCHISING OPPORTUNITIES
    • ACROSS EUROPE
    • Mitchel Auerbach, Senior Commercial Officer
    • U.S. Commercial Service, Dublin, Ireland
    • Dillon Banerjee, Senior Commercial Officer
    • U.S. Commercial Service, Lisbon, Portugal
    • Trade Winds Forum
    • May 16, 2007
  • OVERVIEW
    • Franchising Today
    • International Franchising
    • Why Go International? Why Europe?
    • Franchising Across Europe
    • Legal Aspects of Franchising
  • OVERVIEW
    • Market Entry Strategy
    • Our TOP TIPS
    • East Versus West
    • The Challenges
    • The Opportunities
    • Best Prospects
  • OVERVIEW
    • Our Services
    • Export Success Stories Ireland & Portugal
    • Franchising Shows & Trade Missions
    • Useful Websites & Contacts
  • Franchising Today: U.S. Facts and Figures
    • $1.53 Trillion Dollars
    • Across 75 Industries
    • One in Seven Jobs
    • 50% Retail Sales
  • Exponential Growth
    • Growing Six Times Faster than U.S. Economy
    • 900 New Concepts in last 3 years
    • 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.
    • Additional 100 Expand Across Borders Every Year
    25,000 6,000 1,300 700 7-Eleven Subway UPS/Mail Boxes Etc. InterContinental Hotels
  • Why Go International?
    • Fast & Efficient Growth Expansion Strategy
    • International Demand for Products and Services
    • 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
  • Our Customized Services
    • Expert counseling for new to mature franchisors
    • QuickTake for Europe!
    • Franchising Gold Key
    • Single Company Promotions
    • Business Facilitation Services
    • Trade Missions
    • USA Pavilions at International Shows
    • Counseling & Matchmaking at Domestic Shows
    • Introductions to Local Franchise Associations
    • Webinars on International Market Opportunities
    • Regional Education & Development Conferences
  • EXPORT SUCCESS STORY PORTUGAL
    • In 2005, awarded a Master Franchise for Portugal
    • Initially planned to open 30 units in Portugal by the end of 2004 and 20 more in subsequent years.
    • As of April 2007, 54 units already opened.
  • PORTUGAL SNAPSHOT
    • 3% share of GDP
    • 1.2 % of total national employment
    • 63,000 jobs generated
    • 4,100 new jobs in 2006
    • 900 new units
    • 10,700 total units
    2006 IIF Franchising by Country
  • EXPORT SUCCESS STORY IRELAND
  • Franchising Shows & Trade Missions
    • September 2007 Russia
    • October 2007 - Italy, Ireland, & United Kingdom
    • November 2007 Ireland
    • March 2008 France, Greece & India
    • May 2008 Australia
    • October 2008 Asia
  • Websites
    • Franchising E-Market Express
    • www.buyusa.gov/eme/franchising.html
    • European Franchising Federation
    • www.eff-franchise.com
    • International Franchise Association
    • www.franchise.org
    • European Franchising Network (legal support)
    • www.europeanfranchising.com
  • Contacts Finola Cunningham Team Leader, Global Franchising Team U.S. Commercial Service, Dublin, Ireland Tel: +353-1-667-4753 Email: [email protected]
    • THANK YOU!
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