GF Issue 54

the Americans, for example, so we’d prefer that the franchisor tries to understand the key figures and business plans that they’d need for French franchisees,” he adds. “Generally, it’s very difficult to explain this to American franchisors. The Europeans are more open to doing a franchise market study and understand its importance, but Americans are often very confident in their concepts and think that we must adapt to them.” Lack of regulation One of the biggest draws for franchisors coming to France is that the industry isn’t regulated under French law. Instead the franchise business model is governed by elements such as the French Commercial Code. The only registration requirement in France is that a franchisor must deposit and register its trademark that will be granted to franchisees. Under the French Commercial Code, franchisors must also provide franchisees with a pre-contractual information document at least 20 days prior to signing a franchise contract. This is very straightforward and doesn’t differ hugely from disclosure laws operating elsewhere in the world. “There is the need for disclosure between franchisors and franchisees,” says Zeitline. “They need to provide a dossier to franchisees three weeks before a contract is signed, which contains a lot of information about the brand. You have to provide a market study, your balance sheet, and around 15 other pieces of information to present exactly who you are to the franchisee. It’s not very difficult to fulfil, however.” This level of transparency between the franchisor and its franchisees is very important for entrepreneurs in France and something to be considered by all brands looking to enter the country. In fact, according to the Banque Populaire study, ‘network ethics’ is one of the first pieces of information that franchisees seek out when joining a franchise brands; with this figure sitting at 82% for retail franchisees inquiring about joining a new network. THE NETHERLANDS: Europe’s newly-regulated franchising hub The Dutch franchise industry is one of the largest in Europe, with both domestic and international brands finding success among its consumers for decades. According to the latest figures “Over 75% of franchise networks operating in Europe are homegrown, and we want that number to increase year on year” GLOBAL FRANCHISE.COM 71