Frequently Asked Questions

General questions about franchising

In this section, experts answer general questions most commonly asked which go beyond the specific subject areas listed above.


What are the future prospects of franchising?

Competition has increased sharply with the development from a seller’s market to a buyer’s market. Innovations and specialisations require up-to-date sales forms and the franchising sales form is particularly successful for marketing services and products which require explanations and service. Modern franchise systems are increasing in almost all branches. The American Ministry for Trade forecasts that the share of franchise systems in the retail trade turnover will increase to approx. 75%. The reasons for this can be put down to the advantages for the producers offered by franchising in comparison to the traditional marketing forms used by producers to reach final consumers namely via wholesalers / retailers or via their own retail outlets. Certain branches such as hotels and restaurants, wholesale and retail, as well as courier services and car rental companies would appear to be particularly suitable for expanding their businesses internationally.

A world franchise body known as the World Franchise Council (WFC) was set up in 1994 by the national associations, with the German Franchise Association assuming the directorship. The intention is to attain a world-wide harmonisation and consolidation of franchising.
 
According to the American trend analyst, John Naisbitt, franchising will develop into the predominant form of sales distribution throughout the world. However, franchising is faced with a period of dramatic alterations as a result of the rapid changes of the many framework conditions affecting it. The future shall belong to those franchisors who realise that they must be the entrepreneurial vanguard and who know how to exploit the opportunities offered by these changes. In the course of a period of polarization, those franchisors running an efficient system shall develop their business further by providing their partners with a centre offering a comprehensive system of services while other franchisors will be forced to reduce the extent of their performance to that of a licence system.

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