FRANCHISING

THE FRENCH FRANCHISE INDUSTRY IS AMONG THE LEADERS IN THE WORLD AND IS FIRST IN EUROPE. IT HAS BEEN GROWING STEADILY OVER THE LAST SEVERAL YEARS, AT AN AVERAGE ANNUAL GROWTH RATE OF 3 PERCENT. WITH 653 FRANCHISORS AND 32,240 FRANCHISEES AS OF JANUARY 1, 2002, THE FRENCH MARKET IS VALUED AT USD 27.32 BILLION AND ACCOUNTS FOR APPROXIMATELY 6 PERCENT OF THE TOTAL FRENCH RETAIL AND SERVICE MARKETS.
THE MAIN SECTORS OF THE INDUSTRY INCLUDE THE RETAIL SECTOR (55 PERCENT), THE SERVICES SECTOR (40 PERCENT) AND THE INDUSTRIAL SECTOR (5 PERCENT). CHANGES IN DIFFERENT AREAS OF THE FRENCH FRANCHISE MARKET REVEAL SIGNIFICANT CONSUMER BEHAVIOR TRENDS, AS WELL AS BEST MARKET PROSPECTS. THE SPECIFIC MARKETS SHOWING THE MOST POTENTIAL ARE GENERAL AND SPECIALIZED FOOD PRODUCTS STORES AND HAIR AND BEAUTY SALONS.
WHILE FRENCH ENTREPRENEURS ARE ATTRACTED TO FRANCHISING, AND CONTINUE TO LOOK TO THE U.S. FOR ADVANCED, PROFITABLE AND INNOVATIVE FRANCHISING FORMULAS, FRENCH FRANCHISES ARE STILL DOMINANT IN FRANCE. IN TERMS OF THE FOREIGN-OWNED FRANCHISE MARKET, U.S. COMPANIES DOMINATE WITH A 36 PERCENT MARKET SHARE. YET, SALES BY U.S. FRANCHISES ACCOUNT FOR ONLY 3 PERCENT OF THE TOTAL FRENCH FRANCHISE MARKET. FOREIGN-OWNED FRANCHISES IN FRANCE ARE MAINLY IN THE FAST FOODS, REAL ESTATE, EDUCATIONAL SERVICES, AND CAR SERVICES SECTORS. ALL WERE WELL-ESTABLISHED IN THEIR RESPECTIVE COUNTRIES BEFORE ENTERING THE FRENCH MARKET. HOWEVER, FEW ARE IN THE TRADITIONAL SIT-DOWN RESTAURANTS, HAIRDRESSING, OR CLEANING SECTORS. U.S. COMPANIES POSSESS SPECIAL ADVANTAGES, INCLUDING SUPERIOR KNOWLEDGE OF NETWORK DEVELOPMENT, DELIVERY SPEED, GOOD SERVICE AND COMPETITIVE PRICES. CONSEQUENTLY, THEY CAN EXPECT TO DO WELL IN FRANCHISE SECTORS NOT YET EXPLOITED, AS WELL AS IN ALREADY COMPETITIVE MARKETS, WHEN OFFERING A GOOD PRICE/QUALITY RATIO. THE MAJOR CHALLENGE APPEARS TO BE HIGH INITIAL FRANCHISE ENTRY FEES.
AUTHOR: ROSE-MARIE FARIA

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