Franchising is a trade formula born in America in the ‘30s that extended in Europe between the '50s and the '80s. This franchising formula gives the opportunity to start up a new business with a limited investments, but great commitment and enthusiasm. Its recent development and the need for safeguarding both franchisee and franchisor have made it imperative to develop in Europe (2790/99 EEC Regulation) and later in Italia (Law 129/2004 “Regulation on trade affiliation”) laws that regulate franchising in all its aspects.
In 2007 franchising has grown in Italy by 7.8% in trademark numbers and 7.2% in selling points. Presently, there are 880 shop signs on the National territory. In Europe, the West has witnessed the greatest development of this trade formula, namely: France, Spain, The United Kingdom and the Netherlands, besides Italy. In Eastern Europe it is still developing, but the growth trend is very fast thanks to important International trademarks entering the market. There are about 5000 shop signs in Europe, growing at a double-digit pace. The driving business in franchising is food: Autogrill, Finigrill, Mc Donald’s, Spizzico, King Burger.
The franchisor offers franchisees not only the licence to use the trademark, but also a whole package of several services: location research and evaluation, selling point design, business and financial plan; product range; permanent training; marketing and advertising/media planning. The expenses incurred by the franchisor in the start-up stage, as well as those generated during the whole franchising contract period are covered by an entrance fee, to be paid prior to opening the selling point and a royalty on the sales.
Downloadable documentation:
"Norme per la disciplina dell’affiliazione commerciale"Legge 6 maggio 2004, n. 129 (PDF, 22Kb)