Franchising in GreeceFranchising in Greece
Dr. Aris IkkosDr. Aris Ikkos
JBR Hellas Ltd.JBR Hellas Ltd.Business ConsultantsBusiness Consultants
Franchising in GFranchising in Greecereece
JBR Hellas Ltd.JBR Hellas Ltd.2
A Brief HistoryA Brief History
• 1st franchise: mid-70s
• mid-80s: no more than a dozen
• current situation– more than 200 franchises
– more than 2.000 franchisees
– franchise sales: less than 5% of total
Franchising in GFranchising in Greecereece
JBR Hellas Ltd.JBR Hellas Ltd.3
Why franchise in Greece?Why franchise in Greece?
• High percentage of self-employment
• Fast growing economy
• Competitive market
• Idle cash
• Maturing Franchise Market
• Franchise sales: less than 5% of total
Franchising in GFranchising in Greecereece
JBR Hellas Ltd.JBR Hellas Ltd.4
Type of FranchisesType of Franchises
Restaurants21%
Food Retailing17%
Non-food Retailing23%
Home Improvement6%
Education9%
Health and Beauty Care - 5%
Clothing and Footwear
14%
Business Aids and Services - 5%
Franchising in GFranchising in Greecereece
JBR Hellas Ltd.JBR Hellas Ltd.5
Franchisees by TypeFranchisees by Type
Food Retailing15%
Non-food Retailing26%
Clothing and Footwear - 12%
Home Improvement15%
Restaurants22%
Education4%
Business Aids and Services - 2%
Health and Beauty Care - 4%
Franchising in GFranchising in Greecereece
JBR Hellas Ltd.JBR Hellas Ltd.6
Reasons for FranchisingReasons for Franchising
0%
10%
20%
30%
40%
50%
60%
70%Tested System
Growing Demand
Strong BrandAwareness
ExclusiveDistribution
Lack of FinancialResources
Other Reasons
Franchising in GFranchising in Greecereece
JBR Hellas Ltd.JBR Hellas Ltd.7
Pre-franchise ExperiencePre-franchise Experience
Same Year26%
1 year18%
2 years9%
3 years7%
4 years6%
> 5 years30%
5 years4%
Franchising in GFranchising in Greecereece
JBR Hellas Ltd.JBR Hellas Ltd.8
Life Cycle of FranchiseesLife Cycle of Franchisees
6-10 years15%
>10 years25%
<5 years77%
Franchising in GFranchising in Greecereece
JBR Hellas Ltd.JBR Hellas Ltd.9
Non-Domestic Operations (26%)Non-Domestic Operations (26%)
Subsidiaries30%
Other25%
Master Franchises45%
Franchising in GFranchising in Greecereece
JBR Hellas Ltd.JBR Hellas Ltd.10
Cost of Franchised Outlet Cost of Franchised Outlet (th. USD)(th. USD)
Business CategoryBusiness Category• RestaurantsRestaurants• Food RetailFood Retail• Clothing & FootwearClothing & Footwear• Home ImprovementHome Improvement• Non-food RetailNon-food Retail• Health & Beauty CareHealth & Beauty Care• Business Aids-ServicesBusiness Aids-Services• EducationEducation
Entry FeeEntry Fee
3,3 - 50,03,3 - 50,0
6,6 - 40,06,6 - 40,0
6,6 - 26,46,6 - 26,4
3,3 - 16,53,3 - 16,5
3,3 - 66,63,3 - 66,6
3,3 - 66,63,3 - 66,6
3,3 - 20,03,3 - 20,0
3,3 - 20,03,3 - 20,0
In. InvestmentIn. Investment
16,7 - 500,016,7 - 500,0
26,7 - 166,726,7 - 166,7
40,0 - 333,340,0 - 333,3
26,7 - 66,726,7 - 66,7
23,3 - 200,023,3 - 200,0
23,3 - 666,723,3 - 666,7
16,7 - 266,716,7 - 266,7
3,3 - 83,33,3 - 83,3
Franchising in GFranchising in Greecereece
JBR Hellas Ltd.JBR Hellas Ltd.11
Franchisor RemunerationFranchisor Remuneration
33.7
17.9
31.6
53.7
66.3
82.1
68.4
46.3
0 25 50 75 100
Commision onInvoiced Sales
Commission onGoods Orders
Royalties
AdvertisingLevy
YES NO
Franchising in GFranchising in Greecereece
JBR Hellas Ltd.JBR Hellas Ltd.12
Interest by CategoryInterest by Category
0%
10%
20%
30%
40%
50%Clothing
Food & Restaurants
Home Furnishings
Various
Business Services
Other
ForeignParticipations
Franchising in GFranchising in Greecereece
JBR Hellas Ltd.JBR Hellas Ltd.13
Top 10 (out of 35 subcategories)Top 10 (out of 35 subcategories)
0%
5%
10%
15%
20%
25%Espresso Bar - Cafe
Restaurants
Sandwich - Snacks
Coffee Restaurants
Women's Wear
Mobile Phones
Business Consultants
Cosmetics
Houseware
Men's Wear
Franchising in GFranchising in Greecereece
JBR Hellas Ltd.JBR Hellas Ltd.14
Professional StatusProfessional Status
Owner51%
Marketing9%
Other 6%
N/A28%
General Manager6%
Franchising in GFranchising in Greecereece
JBR Hellas Ltd.JBR Hellas Ltd.15
Ability to Invest (‘000 USD)Ability to Invest (‘000 USD)
17 - 5023%
100 - 23313%
> 2336%
N/A33%
50 - 10025%
Franchising in GreeceFranchising in Greece
Dr. Aris IkkosDr. Aris Ikkos
JBR Hellas Ltd.JBR Hellas Ltd.Business ConsultantsBusiness Consultants
Franchising in GFranchising in Greecereece
JBR Hellas Ltd.JBR Hellas Ltd.17
The Greek Franchise MarketThe Greek Franchise Market• Type of Franchises• Active Franchisees by Category• Arrangements of Non-Domestic Operations• Life-cycle of franchisees• Length of franchise agreements• Contract renewal - extension• Reasons for franchising• Establishing of Pilot outlet• Entry fee and Initial investment• Franchisor remunerationSource: ICAP - Arthur Andersen: Franchising in Greece
Franchising in GFranchising in Greecereece
JBR Hellas Ltd.JBR Hellas Ltd.18
Franchise Agreements DurationFranchise Agreements Duration
1 year4%
5 years24%
6 years6%
10 years34%
15 years5%
20 years8%
Other19%
Franchising in GFranchising in Greecereece
JBR Hellas Ltd.JBR Hellas Ltd.19
Contract Renewals - 1997Contract Renewals - 1997
Renewal54%
Non-Renewal46%
Franchising in GFranchising in Greecereece
JBR Hellas Ltd.JBR Hellas Ltd.20
Pilot OperationPilot Operation
After Franchising4%
Before or With Franchising
96%
Franchising in GFranchising in Greecereece
JBR Hellas Ltd.JBR Hellas Ltd.21
Profile of Potential FranchiseesProfile of Potential Franchisees
• KEM 99 Franchise Exhibition
• Athens, Jan. 29th - Feb. 1st, 1999
• 87 Exhibitors– 55 Greek– 22 International (USA, Italy, France, Canada)
• 15,000 visitors
• 5,700 questionnaires
Franchising in GFranchising in Greecereece
JBR Hellas Ltd.JBR Hellas Ltd.22
FindingsFindings
• Interest by Category
• Professional Status
• Age
• Origin
• Ability to Invest
• Ownership of Shop Premises
• Engagement with the Franchise Method
Franchising in GFranchising in Greecereece
JBR Hellas Ltd.JBR Hellas Ltd.23
AgeAge
Under 3022%
45 - 6015%
N/A14%
30 - 4449%
Franchising in GFranchising in Greecereece
JBR Hellas Ltd.JBR Hellas Ltd.24
OriginOrigin
Attica70%
Abroad and N/A1%
Rest of Greece29%
Franchising in GFranchising in Greecereece
JBR Hellas Ltd.JBR Hellas Ltd.25
Ownership of Shop PremisesOwnership of Shop Premises
N/A34%
Yes27%
No39%
Franchising in GFranchising in Greecereece
JBR Hellas Ltd.JBR Hellas Ltd.26
Engagement with FranchisingEngagement with Franchising
72
27
27
4
5
5
24
68
68
0 25 50 75 100
Franchisee
MasterFranchisee
Franchisor
YES NO N/A
Franchising in GFranchising in Greecereece
JBR Hellas Ltd.JBR Hellas Ltd.27
Source of Visitors’ ProfileSource of Visitors’ Profile
• Picture of Study
• 7 Categories• 35 Subcategories• Characteristics:
– Professional Status– Age– Origin– Ability to Invest– Shop Ownership– Franchise Engagement