Good news for start-ups who want to become self-employed with a franchise system. The German Franchise Association has examined the mood within the member systems in franchising in its current Franchise Climate Index (FKI). That result is impressive: After a brief low in the Corona year 2020, the mood in franchising rose again in the first half of 2021 to the pre-Corona value.
Franchising is considered success model. This is not surprising, after all, sales in the German franchise industry have been growing continuously for around two decades. While this was still 39 billion euros in 2004, by 2020 it was already around 135 billion. This corresponds to a sales increase of 346%. Even the pandemic could not harm the upward trend in franchising. Because the franchise industry increased its sales by 4.6% in the Corona year 2020.
Good mood in franchising despite Corona
The crisis resistance of franchise models can not only be seen in the increasing sales figures, but also in the good mood among franchisees and franchisors. Because after a significant low in the second half of 2020 (122%), the FKI for the first half of 2021 shows a significant increase of 145% – even up to the level of the second half of 2019 (before the pandemic).
In more detail, 20% of the franchisors surveyed stated that the mood before the pandemic in the surveyed franchise systems particularly positive was. 56% reported a good mood. For comparison: currently 20% of those surveyed also find the mood excellent and at least 44% good.
The franchisees see this somewhat more critically. While their mood before the crisis was excellent or good at a very high level of 69%, this is currently only 48%.
Success model franchising also strong in the crisis
Furthermore, the participants were asked about the crisis security of franchise models. Here, 93% stated that franchising was special crisis-proof business model to estimate Compared to the last survey at the end of 2020, this value has only dropped by three percentage points. In addition, at 60%, more than half of the franchise systems experienced little or even positive effects from the pandemic. These values show that despite the crisis, franchising is still an attractive and robust business model for founders and entrepreneurs.
Retail franchising systems are among the winners of the pandemic
Another part of the study looked at how the pandemic-related restrictions were affecting the mood in the individual franchising sectors influence. As a result, 33% see the effects in retail as negative, while 58% rate them as rather positive. Around 8% of those surveyed take a neutral view of this. In the service sector, 41% see the impact as negative, while 45% perceive it as positive and 14% as hardly noticeable. In the catering, leisure and sports sector, these are: 42% negative, 46% positive and 12%. According to the study, there are no negative consequences of the pandemic for franchising systems in the trades, 57% perceive no effects and 43% even experience the effects as noticeably positive and very positive.
Conclusion: Use franchising successfully as a crisis-proof business model
The FKI study clearly shows that the franchising model is becoming increasingly attractive and has proven to be surprisingly stable, especially in times of crisis. If you want to start your own business, you will find it in franchising optimal conditions before – even under adverse circumstances. The combination of self-employment with a proven business idea and the support of a franchisor is often less risky than starting a new company with your own business idea. For this reason, franchising offers particularly favorable conditions, especially for business founders who want to set up their own business for the first time or for career changers who may have already started up in another area.
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