Austrade discusses the possibilities in France
by
Austrade
When it comes to franchising, France leads the way in Europe, both in terms of number of systems and sales. There are now around 930 franchise systems in France turning over 43 billion (AUD 72 biIlion) - this constitutes 40 per cent of total European franchising activity. The franchise sector as a whole continues to expand in France and, since 2000, has experienced an average annual growth rate of 10 per cent.
While franchise businesses flourish in a range of industry sectors, the majority (60 per cent) are in retail. A trend in recent years has been the growth of the services sector. This trend is set to continue as a result of legislation introduced by the French government in May 2005 to facilitate the development and use of social and personal services employment. This should see new opportunities opening up for franchises providing services like "household duties, nursing and personal assistance at home, gardening, computer assistance, school tutoring and childcare.
Like Australia, most franchises operating in France are of local origin - foreign concepts represent less 10 per cent of the market. The majority of foreign systems (30 per cent) come from the USA particularly fast food concepts), followed by Italy, Belgium and Spain.
Australian brands, too, are not unknown in France generally enjoy a positive image. Australia’s senior trade commissioner in Paris, Kirsten Sayers, Australian businesses in seafood, casual fashion music & entertainment are doing well.
For Australian franchise systems looking to develop the French market, there are no major obstacles. But potential entrants need to bear in mind that the market is mature and highly competitive, so you need to be offering something new or have strong advertising and promotion to differentiate your concept from local (and other foreign) brands.
Foreign franchises must also comply with local laws governing fair trade and competition, and any legislation designed for specific industries. Franchising agreements are subject to laws governing commercial contracts and those governing sales or trademark licensing agreements in particular. Business practices are also regulated by a Code of Conduct drawn up by the French Franchise Federation (FFF) which covers the interests of franchisors and franchise owners and sets out disclosure requirements.
According to Karine Cupid, Austrade business development manager in Paris, the main challenges for Australian franchisors in France are:
- Establishing credibility;
- Identifying sources of financing;
- Working with the time difference;
- Bridging the language barrier; and
- Establishing a long-distance relationship based on mutual trust.
Karine's tips for entering the market, in addition to undertaking the usual investigations as to market potential for your product/service and bona fides with respect to potential partners, are:
- Have a good understanding of the franchisor's (your) obligations in the market.
- Seek professional advice concerning legal and tax issues at an early stage.
- Dedicate extra resources and time to penetrate the market. Negotiations with prospective franchise owners take time and can involve several return trips to France.
- Demonstrate what is unique about your franchise and what your franchise owner/business partner will receive in return for their investment.
This article appears courtesy of Austrade .
See the running a franchise and buying a franchise pages for additional information. 20.08.2007
Contact Austrade
Tel: 13 28 78
Fax: 02 9390 2083
