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Franchising
Franchising can be defined as a business system in which a company Massive growth in franchising across Europe is forecast over the next few years as trade barriers, which used to obstruct business activity, disappear. Something of a boom is predicted by a number of companies who are preparing an onslaught on European markets, which are still relatively underdeveloped in franchising. France and Britain are the most franchised-developed countries, but even in these two only 10 percent of retail sales are made through franchised outlets. The most optimistic projections suggest that by the end of this decade Names like McDonald’s, Burger King, Kentucky Fried Chicken and, more recently, Domino's Pizza have already blazed trails across Europe. ‘We know of a number of US operators looking to use the UK as a foothold for moving into Europe’, says Stuart Brown a consultant with Hayward Franchising Services. ‘We expect considerable growth in cross-border franchising as a means of achieving international development. In most cases, companies need a local partner who knows the market place. Hence the expansion through master licences of franchising. Joint ventures are the name of the game’. In retailing, Body Shop has led the way in franchising in Europe. Having opened its first shop in Belgium in 1988 it now has more than 250 outlets in mainland Europe, from Finland to Portugal. Chairman Anita Roddick and her vision of local partnerships in other countries has made Body Shop one of the greatest retail successes since the war. Benetton of Italy used the method of granting master licences to similar Local market expertise is essential for best financial returns. There may The range of franchise opportunities is now myriad. Retailing used to To bring franchising to a wider public an increasing number of exhibitions are being held. The Blenheim Group is responsible for a number of these shows and their spokesman Cheryl Wallis says: ‘Cross-border franchising is on the up and up now that trade restrictions are disappearing. Our Paris show was particularly well received. We had 22, 000 visitors and 170 exhibitors, 12 per cent of whom were from outside France’. A number of French companies are poised to invade the UK via the franchise route. Cross-border franchising is definitely the name of the game from now on.
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