Franchising can be described as licensing scheme or the allocation of the right of use of a brand and a concept. But this, too, sounds more like a question mark than an answer at first glance. Simply speaking: it's a concept where you have one company "lending" its business idea to others. The company that developed the business idea in detail and then tested and optimised it is referred to as the franchisor. The start-up that adopts the mature business concept from the franchisor is called the franchisee. The risk for the franchisees is thus manageable: they start their business with a concept that has already stood the test, benefit from an already established brand recognition and don’t need to develop any marketing concepts as they can use the ones that are already available. Moreover, they can share experiences with other franchisors as only shared experience is an empowering experience and learning from other people’s mistakes is not as painful as making the mistakes oneself. The franchisors can thus fully focus on what really matters: their own customers.
Those who reflect about franchising immediately think about names such as McDonald's, Starbucks and Subway. But you can also find franchising concepts in the sports and real estate markets, in skilled crafts & trades, or in the nursing agency industry.Being a franchisee usually means that you have a strong desire for self-employment and that the business risks are minimized for reasons which are rather obvious. The German Franchising Association (DFV) prepared a study which showed: those who start a company via a franchising model are more successful than independent business start-ups.
Franchising for independent traders
METRO, too, has been offering franchising models for small and medium-sized traders in a total of nine countries since 2010. The traders get the opportunity to manage a professional format under a recognized brand. In each of the nine countries the respective franchise brand has a different name - in Russia it is called Fasol, in Poland Odido. The store design, too, is different. This is of course attributable to the different preferences in the respective countries. Not only the brand serves as a guarantor for the end consumers’ trust, but also the choice, diversity and freshness of the products convince both traders and end consumers.That way, METRO supports one of the key target groups of its wholesale business: independent traders.The traders are not required to pay franchise fees. In return for the franchise they commit themselves to source a certain percentage of their products from the wholesaler METRO.