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 is Franchising?

The European Code of Ethics defines franchising as a system of marketing goods and/or services and/or technology, based upon a close and ongoing collaboration between legally and financially separate undertakings... » Read more


Where did the concept of franchising come from?

The term "franchise" was first used in France in the Middle Ages and referred to the exemption of customs duties and taxes as well as feudal lords partially relinquishing the vassal services of their subjects. » Read more


When did the first franchise systems come into being?

The first franchise systems began during the first stages of industrialization. The sewing-machine company, Singer, vested travelling salesmen with the right to sell their products on their own account and in their own name. » Read more


Who invented today’s ‘Business Format Franchising’?

The USA is considered to be the mother country of "business format franchising", from where the worldwide triumphal march of modern franchising began. » Read more


When did franchising really establish itself across the world?

Franchise systems could first really take advantage of its merits after the enormous consumer requirements of the post-war period had died down and customers once again started to be more careful in their choices. The breakthrough of modern franchising in Europe occurred in the 70s. » Read more


What makes a good franchisor?

Good franchisors must have experience in the sector in which the franchise is developed, as well as a sufficiently strong financial organisation and management skills to provide support and assistance to the franchised network... » Read more


What makes a good franchisee?

Franchisees must have a good level of personal initiative, sufficient enough to take on the responsibilities inherent to managing a business. » Read more


How are business tasks divided up between the franchisor and the franchisee?

Ideally, franchisors and franchisees are responsible for those functions and activities to which they are most suited as a result of their market position, their qualifications and their means. » Read more


What are the franchisor's undertakings?

Although franchise packages cannot guarantee profitability for the franchisee, the factors necessary for success should be taken into account in order to reduce the franchisee’s risk of failure. » Read more


What are pilot units?

These are units owned by the franchisor, which are used to check the profitability of the business under identical conditions to those which will subsequently be applied to the franchise network. » Read more


What is know-how?

Know-how is a body of knowledge acquired and tested by the franchisor, resulting from his experience; it constitutes the operational basis of a business. » Read more


How does the transfer process work?

The transfer of the system to the franchisee should be as straightforward as possible, thus allowing the franchisee to acquire the knowledge necessary in a relatively short time frame. » Read more


What conditions must one fulfil to establish a franchise in a given area?

Conditions will be indicated on a case by case basis by the franchise company » Read more


What are the different types of franchise?

There are various types of franchise. Generally speaking, a distinction can be made between industrial franchising and commercial franchising » Read more


What is multi-unit franchising?

Multi-unit franchising is a fixed term that has been used in the USA for many years now. The term is used to describe franchisees who own several outlets or shops. » Read more


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