The significance and development of franchising
Franchise systems unite the advantages of operating as a local business with the benefits of being a large-scale organisation with a well-known brand that can provide effective support to the franchise partner. As a result of this division of labour, the franchisee can focus completely on the franchising venture and achieve optimum sales results. The franchisor also handles many other aspects of the business that would ordinarily fall to a regular business owner such as shop design, logistics, advertising and quality management.
Although a well-known, established brand and a proven concept do reduce the franchise partner’s start-up risk, a successful franchise business owner cannot expect to have the same security that a salaried employee would have.
The franchise market is continuously developing. There are now around 1,000 franchise systems in Germany. Just how much potential franchise systems offer is evident in the USA because the US franchise sector accounts for 6 per cent of the country's gross domestic product. In Germany, it currently only contributes 1,6 per cent.
