| |
| Greece
Franchise Statistics |
Paper
presented at International Bar Association World Conference
Profile
of the franchises
Franchising first appeared in Greece in the mid-70s. Until
the late 80s, there were no more than a dozen of Greek franchises.
Today, 10 years later and as we approach year 2000, Greek
franchises are estimated at around 250 and franchised outlets
at around 4460. However, the potential for franchising in
Greece is enormous. Despite the recent growth, retail sales
through franchised outlets, do not exceed 5% of the total.
At
the same time, the Greek economy offers the following unique
characteristics, which make franchising very attractive:
-
it
has the highest percentage of self employed people across
Europe and possibly one of the highest worldwide - 50% or
higher. The Greek business culture, therefore, welcomes
the idea of managing your own business;
-
it
is one of the fastest growing economies in Europe with a
growth rate of about 4% which, after the recent economic
restructuring measures, is forecasted to rise to 5 or 6%
by year 2000. Moreover, due to the same measures, Greece
has secured its place in the European Monetary Union EMU,
along with the associated benefits of one strong currency
and free capital movements;
-
on
the other hand, the Greek market is moving fast from being
a "seller's market" to becoming a "buyer's
market". Proof of this is the increasing price and
quality competition which has driven many traditional stores
out of business;
-
It
is, therefore, no longer the case of finding the initial
capital to open a shop that will guarantee success, Professional
marketing and organizational principles must be applied,
services traditionally offered by the franchisor;
-
there
is a lot of idle cash seeking profitable investments, as
evidenced by the rise in the Greek stock exchange.
Most of
this cash lies in the hands of self-employed people who:
-
on
the one hand have high rates of consumption and are an excellent
clientele of retail chains;
-
and,
on the other hand, use it to exploit new business opportunities
as interest rates fall (down from a tax-exempt 20% on government
bonds as recently as 5 years ago, to a taxable 7-8% currently);
-
the
idea of a "franchise fee" for joining a franchise
chain and acquiring the necessary know-how is becoming increasingly
acceptable.
It
should, therefore, come as no surprise that the 1st I 2nd
Greek International Franchise Exhibitions, KEM 99 and KEM
2000 respectively, attracted 87 I 140 exhibitors, including
22 I 33 international participations, and approximately 15.000
I 18.000 visitors. This really substantial interest proved
that Greek franchising is past the stage of infancy and into
the stage of rapid development. This is also confirmed by
a recent study about franchising in Greece 1:
-
a
prospective franchisee can set up his franchise with as
little as 20 thousand Dollars and as much as 800 thousand
Dollars or more. Similarly he can run his own shop with
as little as one assistant or set up his fast food eatery
with 50 or more employees;
-
the
initial franchise contract duration usually is 5-10 years
but can be as short as 1 year or as long as 20 years or
more;
-
a
considerable number of franchisors, although to a different
extent depending on the sector, participates in the investment
of the franchisees or actively supports them in seeking
finance;
-
existing
franchises cover many areas from fast food to sports centres
and from toiletries and cosmetics to foreign language centres.
The breakdown of the greek franchise industry is:
| |
Breakdown
of Franchises by Activity
|
| Type
of Activity |
in
Total |
among
Greek |
among
Foreign |
| |
|
|
|
| Restaurants |
21,1% |
18,6% |
28,0% |
| Food
Retailing |
16,8% |
20,0% |
8,0% |
| Clothing
and Footwear |
13,7% |
12,9% |
16,0% |
| Home
Improvement |
6,3% |
8,6% |
0,0% |
| Non-food
Retailing |
22,1% |
25,7% |
12,0% |
| Health
and Beauty Care |
5,3% |
5,7% |
4,0% |
| Business
Aids and Services |
5,3% |
2,9% |
12,0% |
| Education |
9,5% |
5,7% |
20,0% |
| |
|
|
|
| Breakdown
between Greek and foreign franchises |
73,7% |
26,3%
|
Profile of the franchisees
In what follows, we present extracts from a study carried
jointly with KEM SA, the organisers of KEM 99, the 1st International
Franchise Exhibition in Greece 2.
This study profiles the visitors of KEM 99, i.e. profiles
potential franchisees, as this was registered by the almost
6,000 visitors that answered the questionnaire that was provided.
The full study will be presented in Athens in mid-September
and, therefore, a complete presentation of its results will
be made at the conference.
KEM
99 took place at the Athens Exhibition Centre between January
29th and February the 1st, 1999. The exhibition took place
under the auspices of the National Confederation of Greek
Trade and the Franchise Association of Greece.
Eighty-seven
exhibitors, including twenty-two foreign participations from
Italy, France, U.S.A and Canada, participated in KEM 99. The
exhibition attracted approximately 15.000 visitors.
The
visitors, during their admittance to the exhibition centre,
were asked to fill in a questionnaire. From the 15,000 visitors,
almost 6,000 filled in the questionnaire, making it possible
to draw safe conclusions.
Herebelow, follow some indicative findings:
-
Visitors
expressed a lot of interest in Food & Restaurants and
Business Services. There was also a significant interest
for Foreign Participations;
-
The
majority of the visitors stated as their profession Business
Owners or General Managers in companies;
-
Among
the visitors, the largest age group was that of 30-44, while
second came the under 30s;
-
The
majority of visitors were capable of investing 20,000 -
100,000 USD, while a sizeable proportion of visitors stated
that they were in position to invest considerable amounts
exceeding a 250,000 USD;
-
A
very large proportion of the visitors owned shop premises;
-
Finally,
a very large percentage of visitors were interested to acquire
a master franchise.
1
ICAP - Arthur Andersen: Franchising in Greece:
Development and Prospects, 1998
2 KEM
SA - JBR Hellas Ltd.: KEM 99 -1st Intemational Franchise Exhibitio
n, Visitors' Profile, Forthcoming
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