Questions about selecting a franchise system

In this section, experts answer the questions most commonly asked by franchise candidates on how to search for and select a franchise system.

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What are the differences between a licence system and a franchise system?

When granting a licence, the services provided by a licensor are generally limited to transferring technical know-how, which may include how to manufacture a product, use specific software or the right to use patents or brand names. » Read more

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Does franchising reduce the risks of a business start-up?

Whilst those entrepreneurs who start up a business in the “traditional” manner have to first find customers through expensive marketing measures, franchisees generally benefit from working with a well-known brand, from the network’s market presence and from the confidence the customers already have in the brand. » Read more

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Are franchisees employees or self-employed?

Franchisees are, from a legal point view, independent entrepreneurs. The fact that they are legally independent can be seen by their entrepreneurial initiative and by the fact that they act in their own name and on their own account. » Read more

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Why do advertising fees have to be paid to franchisors?

Advertising fees are frequently the occasion for a special arrangement. The costs of marketing initiatives may either be included in the fixed royalties or be raised separately as a special advertising fee. » Read more

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What role do industrial property rights play in franchising?

A franchisor’s performance package normally includes the right of use to one or more commercial property rights which can involve protected trademarks, word/image signs, service brand names, patents, samples or copyrights. » Read more

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What does the service package offered by the franchisor consist of?

The service package offered by the franchisor generally consists of the franchise concept, the right to use industrial property rights (e.g. brand names, patents, industrial designs, copyrights), training courses and information for the franchisee, the offer to provide support measures as well as the obligation to continuously further develop the concept. » Read more

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What professional qualifications does a franchisee need?

In distribution franchising commercial knowledge or experience is mostly expected whilst in service franchising craftsmanship and other practical abilities are of primary importance. » Read more

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What exactly is a ‘franchisee profile’?

We call a comprehensive description of the necessary personal characteristics for running a business a franchisee profile. » Read more

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What is the best way to choose a franchise system?

Choose the systems which suit you best and have the companies send you the documents and information available. » Read more

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