Franchise systems appear to be crisis-proof

A new study of the Austrian franchise landscape shows that franchise systems continue to be in high demand and on a growth trajectory and represent an option for many to successfully navigate the path to self-employment.

The Austrian Franchise Association (Österreichischer Franchise-Verband) has commissioned a new study. It has showed that in Austria currently about 495 franchise systems with a total of 9,600 franchisees are active at 12,000 locations employing 87,700 people. In the past fiscal year, these companies were able to generate a turnover of 10.8 billion euros. 50% of the franchisors surveyed reported a turnover of more than 5 million euros. Compared with the figures of the last franchise study, a renewed upward trend - despite the Corona crisis - can be recorded in the scene. 81% of the franchise systems surveyed stated that they had weathered the Corona crisis well.

In terms of size, the restaurant industry ranks fourth in terms of franchise size, preceded by the grocery, other services, and construction sectors. The construction, grocery, and restaurant sectors account for a total of approximately 45%.

On average, the entry fee for franchisees was around 18,500 euros and the necessary initial investment around 140,000 euros. On average, the franchisor charges seven percent of sales as a monthly fee.

The survey also showed that 24% of franchise systems are in the start-up or development phase and another 50% are in the expansion phase. 74% are thus growing and 17% of the systems have already reached the maturity phase. The consolidation or closure phase plays no role, with 2% in each case.

Net sales are to be increased in 79% of franchise systems. 91% also plan to take on new franchisees and only 20% of the systems want to part with one or more partners. This means that the 2,300 intended new franchisees are offset by 224 planned separations.

Despite Corona, new hires also show economic momentum. 79% of the systems have hired new employees in the last 12 months and 73% plan to do so in the next 12 months. This means 15 employees per system and a total of 7,500 new hires.

The franchise landscape is of great importance both globally and locally. Three quarters of the systems come from Austria and almost two thirds operate internationally. In terms of internationalization, an increase of 17% is targeted for the next year, and from the current 62% of systems operating internationally, the aim is to increase this to 79% in the future.

As regards women in the franchise, currently the proportion of female franchise partners is 22%, but this is predicted to increase to 26% in the near future. At 27%, the proportion of female managers still has room for improvement, and special development programs for women are intended to support this. The topic of equality is anchored in the corporate philosophy of 52% of the systems, and women and men are paid equally in 76% of the systems.