SPOTLIGHT ON GERMANY
Get your Deutsch on
Rolf Kirst on how to enter the German market
G
ermany, with its positive and buoyant economic outlook, presents a particularly attractive and sizeable market for overseas franchise brands
to break into. As ever, regardless of a country’s size, anyone considering entering a new territory should take into account the inherent cultural and legislative differences. The German franchise market counts
around 60,000 franchisees operating businesses from 1,000 franchise systems, of which approximately 12-15 per cent are imported brands. The main industries are services (45%) followed by trade (23%) and catering/restaurant business (15%), among other sectors such as health and fitness and tourism.
20 |
www.franchisornews.co.uk
Comprehensive market research and
thorough preparation are essential when entering new territory and Germany is no different. Consumers in Germany have particular idiosyncrasies in their shopping, eating and socialising habits, so retail franchises need to carry out thorough research in these areas to conclude in which areas their model, service and offering will need to be adapted. Carrying out extensive groundwork will save any franchisor expense and resources, and provide reassurance and security for a potential master licence holder. Naturally, a pilot store/business established by the franchisor in advance is ideal, but it is not essential. Worth considering is a pilot financed by the franchisor but managed by a German operator who will then go on to take up the initial or master franchise.
Security is important to a prospect in this
territory. One specific piece of knowledge that franchisors should be equipped with, regardless of whether they are master franchisee or a franchise joining the network, is that Germans are generally not risk takers. After all, Germany is the country with the highest number of insurance policies per capita – comprehensive cover is a definite requirement. Being aware of this relative risk aversion will help you understand why a German investor – although they may have the money for a new business – will not invest or risk everything even for what may appear to be the best concept in the world. It is advisable, therefore, to inspire confidence in a German investment base by supporting the starting phase with low fees or even with capital in the form of a joint venture.
Page 1 |
Page 2 |
Page 3 |
Page 4 |
Page 5 |
Page 6 |
Page 7 |
Page 8 |
Page 9 |
Page 10 |
Page 11 |
Page 12 |
Page 13 |
Page 14 |
Page 15 |
Page 16 |
Page 17 |
Page 18 |
Page 19 |
Page 20 |
Page 21 |
Page 22 |
Page 23 |
Page 24 |
Page 25 |
Page 26 |
Page 27 |
Page 28 |
Page 29 |
Page 30 |
Page 31 |
Page 32 |
Page 33 |
Page 34 |
Page 35 |
Page 36 |
Page 37 |
Page 38 |
Page 39 |
Page 40 |
Page 41 |
Page 42 |
Page 43 |
Page 44 |
Page 45 |
Page 46 |
Page 47 |
Page 48 |
Page 49 |
Page 50 |
Page 51 |
Page 52