Why Are There No European Franchises?

[Admiral Yi]

Are there any?  I got to thinking about KFC and McDonald's and such, their international presence and the thought crossed my mind that they're all American based.  I can think of big Yuro corporations that operate around the globe, but none on the franchise model.

Is this because of tax codes?  Lack of entrepeneurial spirit?

(This could be a short thread.)

[PRC]

They are product / culture based rather than franchise based?

Feta, Champagne, Burgundy, Bordeaux, Bratwurst, Beethoven, Fish n Chips, etc?

[garbon]

They are product / culture based rather than franchise based?

Feta, Champagne, Burgundy, Bordeaux, Bratwurst, Beethoven, Fish n Chips, etc?

Hi, Mart.

[Syt]

Are there any?  I got to thinking about KFC and McDonald's and such, their international presence and the thought crossed my mind that they're all American based.  I can think of big Yuro corporations that operate around the globe, but none on the franchise model.

Is this because of tax codes?  Lack of entrepeneurial spirit?

(This could be a short thread.)

How does Aldi work overseas? Franchise? Or corp?

[PRC]

Hi, Mart.

What an insult!  You've wounded me, Ma'am.

[DisturbedPervert]

Do you just mean restaurants?  There's stores, like Tesco and Carrefour.

[garbon]

What an insult!  You've wounded me, Ma'am.

[Admiral Yi]

How does Aldi work overseas?

What's an Aldi?

[Admiral Yi]

Do you just mean restaurants?  There's stores, like Tesco and Carrefour.

But owned by the parent company, no?

[DisturbedPervert]

But owned by the parent company, no?

I don't know.  Tesco here is joint with a company called Lotus, but I guess not individually franchised.

[Syt]

How does Aldi work overseas?

What's an Aldi?

http://en.wikipedia.org/wiki/Aldi

But apparently not a franchise thing.

[Martinus]

Do you just mean restaurants?  There's stores, like Tesco and Carrefour.

But owned by the parent company, no?

Carrefour is at least partially franchised. No idea about Tesco.

[Martinus]

Yi, I think you are also overestimating the popularity of US-based franchises in Europe. Sure, McDonald's and KFC are rather wide spread (but not as much as in the US - for example living in Brussels, I haven't seen a single one of these; and in Warsaw, after the initial post-communist boom, they are beginning to lose money), but others didn't really take a foot hold (for example Burger King totally flopped, Starbucks also didn't take a hold outside of the UK etc.)

I read an article about this recently, actually, and based on what I read, I'd say that the relative lack of franchises in Europe is not because none wants to build a franchise network, but because European small enterpreneurs are not too hot about the concept of belonging to a franchise network. Apparently, the perceived benefits of belonging to a franchise are much less than the demands franchise owners are placing on the franchisees (this is the reason why several US franchises which tried to enter Poland, retreated after several years). Besides, especially, when it comes to food industry, belonging to a franchise may be more a curse than a boon in Europe.

[Admiral Yi]

Yi, I think you are also overestimating the popularity of US-based franchises in Europe. Sure, McDonald's and KFC are rather wide spread, but others didn't really make a foot hold (for example Burger King totally flopped, Starbucks also didn't take a hold outside of the UK etc.)

[/quote]
I was actually thinking about KFC in Pakistan and McDonald's in China.

[Martinus]

Yi, I think you are also overestimating the popularity of US-based franchises in Europe. Sure, McDonald's and KFC are rather wide spread, but others didn't really make a foot hold (for example Burger King totally flopped, Starbucks also didn't take a hold outside of the UK etc.)

I was actually thinking about KFC in Pakistan and McDonald's in China.
[/quote]
Ok. But I thought we were talking about franchises in Europe?

The fact that both US franchises and European franchises are doing worse in Europe suggests that it's less the fact that "Europeans can't build a franchise network, and Americans can" but that "Europeans don't want to belong to a franchise network".

The appeal of a franchise brand is not enough for most SME to justify paying a big license fee for the use of the franchise and giving away a lot of control over how their business is run; and in many cases, customers perceive a franchise (when it comes to food industry at least) as lower quality, actually.

Now, numerous European retail chains or gas station chains are run as franchises, at least partially. Most mobile operators also have distribution networks that run as franchises.