Denmark – Franchising Denmark - Franchising
Overview
• Franchising as a business model is common in Denmark, albeit not to the same degree as in the United States. At least 200 companies are currently operating franchises and the vast majority of these concepts are homegrown. The most well-known and widespread franchises of American origin operating in Denmark are McDonald's, Burger King, KFC, Domino’s Pizza, Hertz, Avis, and 7-Eleven. More recent entries from the United States are Starbucks and Carl’s Jr. The most successful U.S. franchises in Denmark are typically in the fields of car rental, quick-service restaurants or management services. In general, franchising can be found in a large range of Danish industries, e.g. retail, transportation, personal services, property services, hotels, and restaurants.• The recent economic downturn has hit franchising on a number of levels. The slow pace in consumer spending improvements has affected businesses, especially franchises operating within the retail sector, just like the slowdown of the housing market has led to the closing of a large number of real estate franchise units, yet master franchises find it difficult to secure financing. This proves a challenge when trying to obtain master licenses in Denmark.
Best Prospects.
• Regardless, Denmark presents good opportunities in the areas of already proven franchise success, such as quick-service restaurants. This market is especially open to concepts that cater to a healthy lifestyle. As most new franchises are home grown, any new player (that is not already well-known to the Danes) must be able to prove its unique features to be seriously considered by potential master franchisees. Since Denmark is a rather small market for many franchise concepts, willingness to offer regional licenses, e.g. in two or more Nordic countries, is a common way to attract serious investors. No-frills concepts require little in the way of start-up costs and which can be driven by a one-person operation have also proven very successful with Danish entrepreneurs.
Opportunities
• Overall, the economic climate in Denmark is open to franchise opportunities, as most areas of business are transparent and well-regulated. Denmark is a small country, however, with a total population of 5.7 million people. Companies may find that launching large-scale franchise operations is not feasible given the small market size.Resources
• PS 4 FranchisePartner• Franchise-Consult
For more information, please contact Aleksander Moos, Commercial Specialist
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