France is the leading country on the European franchising market, and it has doubled the quantity of its networks in the last two decades. In particular, there has been increasingly more international franchises coming into the country, all seduced by a favorable legal framework and by the access to innovation, support, training as well as by the support from within the network, which is provided to franchisees in France.

Why start up in France
For seven years now, the CSA Institute has been measuring the evolution of the franchising environment in France by way of an inquiry conducted for the French Franchising Federation (FFF), the Banque Populaire Group and the Figaro Economie Magazine. In 2010, that inquiry was realized in the form of 400 telephone calls to franchisees (for the total amount of over 51 000 employees) and, as far as franchisers were concerned, interviews with directors of 156 franchising networks (out of 1360 established in France).

Based on the results of that inquiry, the CSA Institute made a positive conclusion for the development of the franchising environment in France. In fact, during the period of recovery after the crisis, a promising growth of franchises hoped for in 2009 proved to be viable in 2010. The turnover of franchisees reaches 510 000 euros in 2010 against only 440 000 euros in 2009. The number of salaried workers for a franchised sales point passed from 6 in 2009 to 7 in 2010. 48% of the franchisees interviewed created at least one job since June 2009, whereas only 42% did that in the entire year 2009. 72% of the franchisees think they are optimistic.

France is a country of diversification
France has for a very long time been preferred for franchising by international franchising companies. Different brands developed in the country, which have now become very important in the French economy. Among these big players, there are pioneers like Phildar from the Mulliez Family, created in 1903 and developed as a network since 1956. Other brands managed to accelerate their growth in the 1980s. You can point out among them such brands as Yves Rocher, Accor, Laforêt Immobilier, Troc de Lille, Midas, la Brioche Dorée, Carrefour, or Casino.

Segments covered by franchising become more diversified as time goes by. The development of franchising in the 70s and 80s mostly involved the segments of personal equipment, house decoration, hotels, restaurants and hairdressing.  Today these segments still hold an important place in the economic weight of franchising together with mature networks which remain dynamic and which are year after year joined by new players. Brands and sales points in the fast food and nutrition area under franchising have known a particularly remarkable growth for several years in a row.

At the same time, the strong growth of services for individuals and companies contributes to change the proportion since 2001. Thus, the segment of services for individuals passed from 2.6% in 2001 to 10% in 2009 and reaffirmed its strong development.
There is yet another positive moment: the segment of real estate preserves its stability and the number of networks remains constant, while the number of franchised sales point has gone down somewhat.

A favorable legal environment
Franchising in France is governed by the Doubin Law from the 31st of December, 1989, on the development of commercial and craft companies and improvement of their economic environment both legal and social. This law stipulates that the franchisee, if he/she uses the brand and know-how of the franchiser, is still legally independent and acts on his/her own behalf.

It is, nevertheless, possible to introduce into the franchise contract a clause about the exclusive character of the brand or the product itself. The exclusive character of the brand forbids presence of more than one shop in a particular area. It is the case, for example, of the Petit Bateau or Séphora brands. The products offered, on the other hand, can be offered in the same area in a shopping center for general public, like Monoprix.  The exclusive character of the product is a more protective measure to the extent that it limits the competition for certain products in a particular area.

Yet the most interesting clause of a franchising contract is that remuneration can turn out to be very appealing. Indeed, according to the network, the contract envisages one entry ticket which can reach tens of thousands of euros, as well as bonuses in accordance with turnover figures achieved. These bonuses are usually around several per cents. Certain franchisees have come to construct small empires thanks to this system, sometimes multiplying the number of franchises. The premium of a franchisee in some networks can be even higher than that of the franchiser. Thus, if a product or a service offered becomes successful among the target clients, such a franchising contract might become highly lucrative for a franchisee in France.

Favorable factors for franchising in France
26% of the franchisees interviewed as part of the inquiry implemented by the CSA Institute identified two major challenges they might face in the future: behavior of the clients finding new competitors and implication of new technologies. Thus, innovation is among the important factors of motivation for franchising networks to the extent that it should help them remain competitive in the future commercial environment. The electronic commerce has the same logic and has become extremely popular in the last years. One third of the franchisees are part networks which have their own systems of electronic commerce. Finally, the initial and subsequent training remains more than ever the cornerstone of the franchising system and allows the franchisees to preserve competitiveness against actual commercial developments.

Conclusion: international franchises should not hesitate to start up in France
France, which is often criticized for its allegedly little profitability from a company's standpoint, actually offers multiple advantages to both franchisers and franchisees.