Facts & Figures

Berlin, 16/01/2020
 

Franchise Statistics 2019

Strong franchise market particularly attractive for international solutions

• 4.2% more franchise partners
• Number of operations by 2.3%
• Significant revenue growth 5.1%

The latest franchise statistics once again show a positive development of the franchise economy. According to these statistics, the approximately 960 franchise systems nationwide had a total of 133,424 franchise partners in the past year, an increase of 4.2% from the previous year. Overall, the 171,824 (+2.3%) franchise operations employed approximately 717,000 employees, which represents a slight increase of 0.2%. These figures attest to growth and ongoing development within the German franchise economy. This is demonstrated even more clearly by the development of total revenues: At 129 billion euros, this figure increased again by 5.1% compared to the previous year.

 

Growth in partners and revenue generate international interest

The surveyed franchise systems were again able to significantly increase partner development. While the number of franchisees was 128,000 in 2018, this group grew by 4.2 percent in the past year to over 133,000. Extrapolated to the entire franchise economy, this means that about 5,500 more people set up their own businesses under an existing umbrella brand than in 2018. The positive growth of total system revenue was even stronger. This figure grew once again in 2019, increasing 5.1% to reach 129 billion euros.

"The current analysis of the past year indicates solid development in our sector and therefore dynamic growth", according to Torben Leif Brodersen, Managing Director of the German Franchise Association. "These numbers have pulling power, as demonstrated by the considerable interest among foreign brands in becoming part of our agile franchise market. We observe this every day in the growing frequency of international enquiries", Brodersen explains.

 

Franchise founders: Core target groups consolidate

The target groups sought out by franchisors to successfully multiply their business ideas are also surveyed in the annual statistics: At 25%, salaried professional and managerial staff remain in first place, followed by independent entrepreneurs (23%), existing franchisees (22%) and internal employees (13%).

The topics conversion, that is, the integration of existing companies into a franchise system, multi-unit franchising (one partner with multiple locations) and changing sides, i.e. employees becoming partners, remained the focus of expansion. "For a number of years now, we have noticed an increasing openness for alternative target groups within system headquarters. This indicates a flexible reaction to evolving circumstances. Only relying on classical founders would not be nearly enough in the long term", Torben Leif Brodersen asserts. "Instead, creative approaches are needed to keep the rate of expansion from flagging. More and more focus is being placed on existing partners and in-house employees", Brodersen states.

 

Service sector remains number 1

The service sector consolidated its ranking and increased by three percent to 43%. It is followed by trade, in second place with 29% (+4%). The restaurant and leisure sector declined slightly to its current standing of 20%. The craft sector, with only 8%, also decreased. The sector data indicates that there is a lot of momentum behind the unchallenged leader. Whether this ranking is sustainable will become clear in surveys for future years.

 

Labour market strained in the franchise economy as well

While the number of operations and partners continued to increase, the number of employees remained at nearly the same level as the previous year, growing by a mere 0.2% to 716,935. "Stagnating employment figures demonstrate that the franchise economy is also affected by the labour shortage that exists in many areas", according to Brodersen's analysis of the numbers. "On the other hand, the success evidenced by the growth in partners, operations and sales attests to the agility and innovative attitude within franchise systems. After all, a number of practical examples show how digital solutions can successfully manage the lack of employees in headquarters and franchisee operations", Brodersen asserts.

 

About the design of the study:

The franchise statistics for 2019 were collected online from 11 November to 16 December 2019. 276 members of the German Franchise Association and 684 non-members were contacted via email. The response rate was 9%. Prof. Dr. Achim Hecker (Digital Business University of Applied Sciences) was engaged to conduct and analyse the study.

 

About the German Franchise Association:

The German Franchise Association represents the interests of the German franchise economy in the national and international business environment. It was founded in 1978 and is based in Berlin. The German Franchise Association is a quality association representing both franchisors and franchisees. More than 360 members are currently organised in the association. In 2019, around 960 franchisors active in Germany, with 133,000 franchisees and nearly 717,000 employees in almost 172,000 operations achieved revenues of approximately 129 billion euros.

 

Press contact:

German Franchise Association e.V.
Head of Press and Public Relations
Antje Katrin Piel
Luisenstr. 41, 10117 Berlin
Tel. +49 (0)30 278 902-12