Franchising is a partnership in which the franchisor licenses a proven business concept — brand, products, processes, marketing — for fees; the franchisee runs the location as a legally independent entrepreneur. Typical are an entry fee (often €5,000–50,000), an ongoing franchise fee (usually 3–10% of net revenue) and a marketing levy (1–4%). In return you get system strength — paid for with entrepreneurial freedom.
Enter revenue and fee rates — the annual system costs appear instantly.
These fees must be earned within the business model — in exchange, you save own spending on brand building, recipe development and baseline marketing. The honest question: does the system bring more revenue/efficiency than it costs?
| The system delivers | You give in return |
|---|---|
| Known brand from day 1, proven concept, operations manual | Entry + ongoing fees, revenue share |
| Purchasing terms, supplier network, product development | Purchase obligations with system suppliers |
| Marketing, campaigns, local visibility standards | Freedom of design and assortment (standards are mandatory) |
| Training, controlling benchmarks, expansion support | Reporting duties, audits, system loyalty over the term |
Varies widely: small concepts from ~€20,000–50,000 own funds, full-service restaurants well into six figures (total investment incl. fit-out often €250,000+). 20–30% equity share of the total investment is common.
Undecidable in general: franchising lowers start-up risk and accelerates ramp-up, but permanently costs revenue share and freedom. Strong own ideas and marketing competence favour independence; wanting to "buy" processes and brand favours the system.
Only on the contract's terms — 5–10-year terms are common, often with investment obligations at renewal. Negotiate exit, sale and buy-back clauses BEFORE signing, not during a conflict.
Legally yes — with full entrepreneurial risk plus system duties. Beware contracts that effectively dictate every decision: then you carry employee-level freedom at entrepreneur-level risk.