17th survey by the French Franchise Federation and Banque Populaire
For more than 16 years, the French Franchise Federation, in partnership with Banque Populaire, has been reviewing key figures from the franchise industry. Several topics are covered in a series of episodes that we’ve shared on our social media channels, making this study a benchmark in its field. We invite you to review the highlights of this survey. This year, more than ever, franchise stakeholders have had to constantly adapt and reinvent themselves as they’ve faced the health crisis and shifts in consumer behavior and digital trends. Get started with Cerca Covid-19: The Franchise Industry Faces the Health Crisis The COVID-19 crisis has upended the operations of many businesses. In fact, between business closures, the shift to remote work, and a series of lockdowns, it was a huge leap into the unknown. The ability to adapt quickly in order to continue operating was absolutely vital for businesses to “survive” and limit revenue losses. Despite everything, franchising continues to create jobs: 6 out of 10 franchisees have created at least one job. The advantages of being part of a franchise network rather than operating as an independent business owner were therefore evident to 67 % of franchisees, who believe they weathered the coronavirus crisis better, particularly thanks to support measures provided by franchisors. These measures took the form of more regular communications (87%), the provision of new digital tools (58%), the development of new services for customers (44%), and more frequent meetings with other franchisees in the network (42%). During this period, an increase in communication within the networks was observed. This was notably reflected in at least one visit from a network coordinator (91% of cases). In addition to the measures implemented by the network headquarters, 86 % of franchisees implemented specific initiatives to best adapt to the crisis. Following the implementation of all these actions, one in two franchisees reported a positive impact on their business. Franchisees are therefore satisfied with the franchise model, and 90% of them recommend it. The fact that they are not left to fend for themselves during a crisis and receive support highlights the benefits of being part of a franchise network. Who are the franchisees? The world of entrepreneurship is increasingly attracting French people. In fact, nearly one-third of them want to start their own business, and 40% are interested in the independence as well as the security offered by the franchise model. It is worth noting that 72% of franchisees were employees before choosing entrepreneurship, 49% of them have a high school diploma or lower, and 54% have a two-year college degree or higher. Trust is key, as tenure is important; 6 out of 10 franchisees joined their network 10 years ago or more. Why invest in a franchise? The process of launching a franchise is relatively straightforward, as training takes about 36 days on average, and franchisee status makes it easier to obtain a loan from banks (62 % of cases). How much does it cost to start your own business? 37% Less than €100,000 21% Between €100,000 and €200,000 42% More than €200,000 This cost may vary depending on the franchise chosen and the necessary investments. Why do entrepreneurs choose franchising? The support and resources provided to grow the business (39 %) Benefiting from the reputation of a well-known brand (36 %) Limiting financial risks (25 %) Digital technology: a growth driver for franchises The coronavirus crisis has led to an extraordinary acceleration in the digital transformation of businesses. In fact, 97% of franchisees now use the “phygital” model—which involves “Web to Store,” meaning customers research a product or service online and make their purchase in a physical store. Along the same lines, “Click & Collect”—defined as the process of purchasing online and picking up the product at a physical store—has been implemented at 42% of retail locations, with 21% of French people using this service for the first time during the coronavirus crisis. More than half of French people would like their local stores to offer the option of shopping online. Contactless payments have also grown during this crisis (79% of franchises offer contactless payment), as have all forms of digital payment methods in stores, such as smartphone payments. (69% of franchises offer this type of payment.) Digital communication is central today, and businesses are increasingly active on social media.In fact, franchises are active on social media in 77% of cases and receive support from their franchisors in managing their social media presence in 7 out of 10 cases. Franchisees are committed to the local economy Franchising is an important driver of local economic development. Mindful of French consumers’ spending habits—for whom fair trade and local shopping are becoming essential factors—3 out of 4 franchisees have decided to set up shop in their own region and work with local stakeholders. Indeed, they aim to meet the needs of French consumers who prefer to shop at stores that support local production (66%) and are nearby (74%); short supply chains are highly valued by these consumers seeking more responsible purchasing choices. To address this unprecedented crisis, franchisees have 44% implemented solidarity initiatives. 63 % of these involve franchisees in the food sector. Franchisees invest in the franchise model. When launching a franchise, the two professional groups most frequently consulted to support the project are accountants and certified public accountants (70 %), followed by[…]
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