GF Issue 54

McDonald’s became one of the first international systems to try its luck with opening in what was then West Germany. Today, many franchise networks exist within the country; both of domestic origin, and from overseas. German consumers are familiar with the biggest global names, but ‘made in Germany’ is still seen as an international seal of quality. Foreign brands need to truly bring their A-game to compete with local talent. “Franchising in Germany is well-known because lots of people understand the model and now have the possibility to combine franchising with popular brands that they know; especially in the restaurant, trades, and fitness sectors,” explains Torben Broderson, CEO of the German Franchise Association. An appealing opportunity Germany’s franchise market is one of the largest in Europe, and this is down to a collection of factors, all of which have boosted domestic brands and also enticed large international franchisors to seek out German master franchisees. According to the country’s Association, the German labor force is the largest in Europe, and the overall business tax rate for companies is lower than many other European or North American regions. One of the biggest appeals of opening a franchise in Germany, however, is that the country doesn’t have specific franchising laws that govern how a business can operate, negotiate, and grow. This doesn’t mean that it’s a completely lawless market, of course; Germany forms part of a group of countries worldwide with the most comprehensive and advanced protection of intellectual property rights. But instead, Germany’s franchising culture is based on numerous good faith agreements, as well as rigid case law which has been successful in protecting both franchisors and franchisees for decades. “We have some compounded rules which altogether form not franchise laws, but several general rules from which case law is then deducted,” explains Dr. Benedikt Rohrßen, a partner at law firm Taylor Wessing. “Disclosure is a very important one that’s based on this idea of good faith between the parties. The courts ask the franchisors to have a level playing field of information with franchisees, so they disclose the most important issues which might affect the business or franchisee. “If not disclosed, as in many other countries, the franchisee may then later – during the progress of the franchise agreement – claim that they weren’t disclosed some points and “14,900 franchise brands currently operate in Europe” then subsequently withdraw from the agreement. In the worst case scenario, they may even claim damages.” When it comes to the kinds of things that franchisors must disclose, there isn’t a law which provides a standardized list. But Rohrßen insists that this isn’t a complicated process that should dissuade brands and shouldn’t differ from what they’d be used to in other Western countries. FRANCE: a resilient European hotspot Of all the European countries, France’s franchise community is among the most optimistic. The franchise scene has exploded over the previous decade, as an increasing number of French entrepreneurs recognize the benefits of the business model and more international franchisors bring their brands to this country’s diverse and exciting regions. In 2022, there were 1972 GLOBAL FRANCHISE.COM 69