What is Franchising?

Arrangement where one party (the franchiser) grants another party (the franchisee) the right to use its trademark or trade-name as well as certain business systems and processes, to produce and market a good or service according to certain specifications. The franchisee usually pays a one-time franchise fee plus a percentage of sales revenue as royalty, and gains (1) immediate name recognition, (2) tried and tested products, (3) standard building design and décor, (4) detailed techniques in running and promoting the business, (5) training of employees, and (6) ongoing help in promoting and upgrading of the products.

Definition according to BusinessDictionary

The current study commissioned by the Austrian Franchise Association shows that the franchising sector in Austria continues to grow steadily. The interviewed franchise partners also seem to feel confirmed in their decision for this business path.

 

Franchising is young and dynamic

The fact that the flourishing franchise scene is a rather young economic scene is shown by the fact that about 60% of the systems have only been active on the Austrian market since 2000 or later.

 

Franchising is predominantly Austrian

Perhaps surprisingly for many: franchising is also an Austrian speciality, as 60% of active systems were founded in Austria.

 

An overview

The 480 franchise systems in Austria have 11,700 locations and 9,400 franchisees.

In total, the franchise industry employs 87,300 people and generates a turnover of over 10,3 billion EUR.

 

Costs & fees slightly increased

The average investment sum for a franchisee at the start is just over 137,000 EUR, the entry fee is around 15,000 EUR.
About 20% of the franchisees pay a fixed fee and the rest a percentage of the turnover.

 

Wish fulfilled: Enjoy your work and be your own boss!

The main arguments for franchising are in particular communication and cooperation at eye level, being able to multiply success and using swarm intelligence.

 

Source: Austrian Franchise Association 2019


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