Beruflich Dokumente
Kultur Dokumente
BREAKING INTO
EUROPEAN UNION
MARKETS
Jason Stirland
Professor John Stanworth
David Purdy &
Stewart Brodie
International Franchise Research Centre Special Studies Series Papers 1-16 Web Versions 2010 p.1
LIABILITY DISCLAIMER 10 London: A Capital City For Franchisee
Recruitment, (Mills, Stanworth &
The information and analysis in each report Purdy), 1997
is offered in good faith. However, neither the
publishers, the project sponsors, nor the 11 The Effectiveness of Franchise
author/s, accept any liability for losses or Exhibitions in the United Kingdom,
damages which could arise for those who (Chapman, Mills & Stanworth), 1997
choose to act upon the information or
analysis contained herein. 12 Franchising: Breaking Into European
Union Markets, (Stirland, Stanworth,
IFRC Special Studies Papers 1993-2001 Purdy & Brodie), 1998
5 The Blenheim/University of
Westminster Franchise Survey: A
Comparison of UK and US Data,
(Stanworth, Kaufmann & Purdy), 1995
6 Developing a Diagnostic
Questionnaire as an Aid to Franchisee
Selection, (Stanworth), 1995
7 Franchising as a Source of
Technology-transfer to Developing
Economies, (Stanworth, Price, Porter,
Swabe & Gold), 1995
International Franchise Research Centre Special Studies Series Papers 1-16 Web Versions 2010 p.2
FOREWORD CONTENTS
Now, with this latest research from the Fig 6 Number Of Irish Outlets: EU 'Aspirants'.....p8
International Franchise Research Centre, we
are perhaps moving towards a better Fig 7 Current Trading In EU Countries:
understanding of this dichotomy. EU 'Activists' ..............................................p9
This research project has looked below the Fig 8 New/Early Target Countries.......................p9
surface, and sought to explore the
contradictions between the aspirations of Fig 9 Languages Spoken By Staff ....................p10
many UK franchisors, compared to the
reality of taking their franchise systems Fig 10 Sector Of Franchise.................................p11
overseas – a not inexpensive exercise in
terms of cost and other resources. In Fig 11 Did/Will UK Banks Provide
particular, I hope the experience of those UK Extra Finance For Expansion ? ...............p12
franchisors who have already expanded into
the EU is of value to other franchisors Fig 12 Intention To Operate Additional Bank
wishing to follow their lead. Accounts In Other EU Countries..............p12
Survey Questionnaires............................................p15
Estonia
Latvia
Denmark
Lithuania
Ireland Russia
Belarus
U.K. Neth.
Poland
Germany
Belgium Ukraine
Czech
Lux. Rep. Slovakia Moldova
Sources (July 1998): What is the European Union ? (EU ‘Europa’ site: europa.eu.int/en/eu/states.htm)
European Union Timeline (Political Resources for the European Union [PREU]: www.cunliffe.demon.co.uk/Politics/EU.timeline.html)
Magellan Maps (Europe.art)
59%
Proportion
of Sample
27%
14%
EU 'Activists' - Already active in the EU EU 'Aspirants' - Planning to be active in No current plans for EU expansion
(beyond UK/Eire) the EU within 3 years (beyond UK/Eire)
50%
38% 50%
18% 44% 45%
40%
35%
30% Proportion
20% of
25%
30% Sub-sample
20%
(EU Activity)
More than 66% 15%
10%
5%
33% - 66% 0%
EU 'Aspirants'
Less than 33%
EU 'Activists'
be planning an entry into the EU market This compared with only 26% of aspirants.
within the next 3 years. None of those actually in Europe had used a
'Joint Venture' strategy of entry, compared
For instance, over half (57%) of those with 19% of aspirants. Three-quarters of
already in the EU had staged a direct entry. aspirants intended to involve other parties
57%
55%
60%
26%
43% 50%
40%
Proportion
of
30%
Sub-sample
19% 20% (EU Activity)
Direct
10%
Master 0%
0%
EU 'Aspirants'
Joint Venture
EU 'Activists'
44%
17%
34%
45%
33%
40%
34% 35%
30%
Proportion
14% 25% of
20% Sub-sample
Over £50,000
(EU Activity)
11% 15%
£20,001 - £50,000 10%
11% 5%
£10,000 - £20,000 0%
EU 'Activists'
46%
40%
18% 50%
45%
40%
13% 13% 35%
30% Proportion
51 or more
11% 25%
of
21-50 4% Sub-sample
9% 17% 20% (EU Activity)
11-20 8%
15%
17% 10%
6-10 6%
5%
1-5 Franchisees 0%
None EU 'Aspirants'
EU 'Activists'
81%
Proportion
of Sub-sample
17%
3%
of collaborative exercise involving another 44% for those already in the EU. Overall,
major party. 48% of aspirants were anticipating spending
£20,000 or less, compared with only 22% of
Perhaps the results of this current research, franchisors already in the EU.
which inform us that, for whatever reason/s,
indigenous UK franchisor exporters Current Size
eventually find arguments for direct
management more persuasive than those for Figure 5 illustrates the number of UK
'Joint Ventures' or 'Master Licences', might franchisees claimed by firstly systems
inform future debate in this area and alert already operating in the EU and secondly
'Aspirants' that exporting into the EU usually those intending to launch a presence within
means direct action. the next 3 years. Interestingly, there were a
number of systems active in the EU that had
Costs Involved no franchised outlets in the UK. Nearly half of
the aspiring systems were bunched in the
In business, new projects seldom turn out to 21-50 franchisees size group. Perhaps the
be less costly than planned and frequently most expected statistic is the 40% with 51 or
run over-budget. Figure 4 shows stark more franchisees which we see for systems
differences in the costs claimed by those already active in the EU.
already active in the EU and the cost levels
expected by those aspiring to EU entry within Previous research into franchising indicates
the next 3 years. For instance, 34% of that, for many systems, financial break-even
aspirants felt that they could stage EU entry occurs somewhere along the 21-50 outlets
at a cost of less than £10,000 compared to continuum. A substantially larger proportion
only 11% of franchisors already active in the of EU export 'Activists' than 'Aspirants' had
EU. passed that point.
Ireland 56%
Germany 52%
France 43%
Spain 34%
Italy 26%
Proportion of Sub-sample
71%
66%
47%
80%
39%
70%
42% 63%
21% 60%
50% Proportion
Germany 34%
of
40%
France Sub-sample
30% (EU Activity)
Italy
20%
Spain
17% 10%
Other 0%
Ireland EU 'Aspirants'
EU 'Activists'
61%
50%
43% 70%
24% 60%
35%
50%
37%
13% Proportion
French 40%
of
Spanish 10% Sub-sample
30%
22% (EU Activity)
German
20%
Italian 10%
13% 2%
No foreign language skills 0%
EU 'Activists'
25%
10%
19%
13% 3%
Specialised Services 6%
Food Franchisors 19%
Health & Beauty 6% 3%
Motoring Services
Home Care Services 35%
10%
Distribution Services 30%
Leisure & Travel Services
0% 6% 25%
Business Services
20% Proportion
Walk-in-Retail 3% of
15% Sub-sample
Cleaning Services
0% 10% (EU Activity)
Property Care Services
5%
Delivery & Haulage
0%
Estate Agents
Fast Print EU
'Aspirants'
EU
'Activists'
Sectors BANKING
84%
90%
90%
80%
70%
60%
Proportion
50% of
40% Sub-sample
30% (EU Activity)
16% 20%
10%
No 0%
10%
EU 'Aspirants'
Yes
EU 'Activists'
70%
63%
60%
37%
44% 50%
56% Proportion
40%
of
30% Sub-sample
(EU Activity)
20%
10%
No 0%
EU 'Aspirants'
Yes
EU 'Activists'
92%
95% 100%
90%
80%
70%
60% Proportion
of
50%
Sub-sample
40%
(EU Activity)
30%
20%
8% 10%
Local banks in franchisees’ own country 0%
5%
EU 'Aspirants'
UK banks
EU 'Activists'
94%
100%
100%
90%
80%
70%
60% Proportion
of
50%
Sub-sample
40%
(EU Activity)
30%
20%
6% 10%
No 0%
0%
EU 'Aspirants'
Yes
EU 'Activists'
95% 100%
90%
80%
70%
60% Proportion
of
50%
Sub-sample
40%
(EU Activity)
30%
20%
10%
3%
Yes 0%
5%
EU 'Aspirants'
No
EU 'Activists'
At the present time, how complete is your UK Which method/s did you use when expanding
1 Network?
8 into the EU?
< 33%................................................................. A Direct Franchising .............................................. A
33-66%............................................................... B Master Franchisees............................................ B
> 66%................................................................. C Joint Venture ...................................................... C
In what other European Union (EU) countries Approximately how much did you anticipate
2 are you currently trading?
9 spending on your initial EU expansion plans?
Eire..................................................................... A < £10,000 ........................................................... A
France................................................................ B £10,000 - £19,999 .............................................. B
Germany ............................................................ C £20,000 - £50,000 .............................................. C
Italy..................................................................... D > £50,000 ........................................................... D
Spain.................................................................. E
Other .................................................................. F 10 Approximately how much did you actually
spend?
Please indicate the number of franchisees < £10,000 ........................................................... A
3 you currently have operating in each of the £10,000 - £19,999 .............................................. B
following EU countries: £20,000 - £50,000 .............................................. C
Eire..................................................................... ____ A > £50,000 ........................................................... D
France................................................................ ____ B
Germany ............................................................ ____ C Did you obtain the required extra finance
Italy..................................................................... ____ D
11 from your UK bank?
Spain.................................................................. ____ E Yes ..................................................................... A
U.K. .................................................................... ____ F No....................................................................... B
Other (Total elsewhere in EU)............................ ____ G
a) Following the introduction of the single
What NEW countries are targets for 12
4 expansion within the next 2-3 years?
european currency, do you intend
transferring your main UK banking to a bank
Eire..................................................................... A in another EU country?
France................................................................ B Yes ..................................................................... A
Germany ............................................................ C No....................................................................... B
Italy..................................................................... D
Spain.................................................................. E b) If NO, would you intend operating
Other EU (please state) ..................................... F additional banking accounts in other EU
countries?
For your existing staff, how adequate is their Yes ..................................................................... A
5 foreign language competence for your No....................................................................... B
existing overseas markets?
Adequate - no training or new staff anticipated.. A 13 Do you anticipate that your present UK bank
Borderline - training/new staff possibly needed . B will be able to provide the services you will
Inadequate - training or new staff needed.......... C require to support your future EU expansion
plans following the introduction of the single
In which languages are your existing staff currency (eg Euro-designated accounts to
6 skilled to an acceptable level? collect fees)?
French................................................................ A Yes ..................................................................... A
German .............................................................. B No....................................................................... B
Italian.................................................................. C
Do you anticipate your future EU franchisees
Spanish .............................................................. D 14 being financed by:
Other European exc. English (please note) ....... E Local banks in their own country........................ A
How long have you been trading in the EU UK banks............................................................ B
7 (excluding UK and Eire)?
< 12 months ....................................................... A
12-23 months ..................................................... B
International Franchise Research Centre - Special Studies Series Paper
NAMENo.12 15
24-36 months ..................................................... C
RESPONDENT (Franchisor): .............................................................
Within what timescale do you intend to Approximately how much do you anticipate
1 expand your franchise network into the
8 spending on your initial EU expansion plans?
European Union (EU)? < £10,000 ........................................................... A
By 2001.............................................................. A £10,000 - £19,999 .............................................. B
After 2001........................................................... B £20,000 - £50,000 .............................................. C
> £50,000 ........................................................... D
At the present time, how complete is your UK
2 Network? Do you intend obtaining this extra finance
< 33%................................................................. A 9 from your present UK bank?
33-66%............................................................... B Yes ..................................................................... A
> 66%................................................................. C No....................................................................... B
David Purdy is a researcher supporting the Finally, we wish also to acknowledge the
Future of Work Research Group and its support of the participating firms, without
interest in franchising. He has also whom the survey would not have been
specialised in small business research since possible.
1985, and publications include authorship of
'Risk Capital for Small Firms', commissioned
by the Small Business Research Trust. He
has also co-authored studies investigating
Small Business Management Development
and Teleworking.