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The Italian franchising market 1
General trend
After the peak growth rate in the first half of the 1990's, the sector has kept growing at a considerable pace also in the following years, in terms of number of brands, franchisees and total turnover (Tables 1-3)
Tab 1. Number of franchisors
| Year | 1990 | 1995 | 2000 | 2001 | 2002 | 2003 | 2004 |
|---|---|---|---|---|---|---|---|
| Franchisors | 230 | 436 | 562 | 606 | 628 | 665 | 698 |
| Growth rate | - | 89,5% | 28,8% | 7,8% | 3,6% | 5,9% | 4,9% |
Tab.2 Number of franchisees
| Years | Growth rate on previous year |
|---|---|
| 2000 - 2001 | 16,2% |
| 2001 - 2002 | 6,6% |
| 2002 - 2003 | 6,0% |
| 2003 – 2004 | 3,1% |
Notwithstanding the weak GDP growth in the last four years, the number of franchisees increased from 36.547 in 2001 to 43.199 in 2004 picking up by 3,1% in the last year.
Tab. 3 Franchising turnover
| Years | Turnover in mil. € | Growth rate on previous year |
|---|---|---|
| 2001 | 13.849 | - |
| 2002 | 14.666 | +5,9 % |
| 2003 | 15.413 | +5,1% |
| 2004 | 16.583 | + 7,6 % |
Even though the Italian franchising system has traditionally shown a higher fragmentation rate in comparison with other major franchising markets, since 1995 the average number of franchisees per brand has been growing steadily until 2002, showing that the chains established in the country are on average consolidating their position (Table 4).
Tab. 4 Fragmentation rate = Average number of franchisees per brand
| Year | N. of brands | N. of franchisee | Average |
|---|---|---|---|
| 1995 | 436 | 19.440 | 45 |
| 1996 | 465 | 20.706 | 48 |
| 1997 | 486 | 23.173 | 48 |
| 1998 | 502 | 26.274 | 52 |
| 1999 | 536 | 28.127 | 52 |
| 2000 | 562 | 31.439 | 56 |
| 2001 | 606 | 36.547 | 60 |
| 2002 | 628 | 39.315 | 63 |
| 2003 | 665 | 41.901 | 63 |
| 2004 | 698 | 43.199 | 62 |
Sector analysis
In terms of turnover the two dominant franchising sectors in 2004 were “Variety retailing” and “Services”: together they have generated about 55% of the franchising turnover in Italy (Table 5).
Other sectors generating a considerable turnover were “Clothing/fashion” and “Non food retailing”, generating together about 27% of the national franchising turnover.
Even though “Services” holds only the second position in terms of turnover, it's by far the most important sector in terms of number of franchisors and franchisees (Table 6).
This sector shows therefore a much smaller turnover per franchisor if compared to “Variety retailing”.
Tab. 5 The most important franchising sectors by turnover (mil. €)
| Sectors | 2002 | % share | 2003 | % share | 2004 | % share |
|---|---|---|---|---|---|---|
| Variety Retailing | 4.515 | 30,7 | 4.619 | 30,0 | 5.086 | 30,7 |
| Services | 4.305 | 29,3 | 4.356 | 28,3 | 4.222 | 25,5 |
| Clothing/fashion | 1.843 | 12,5 | 2.162 | 14,0 | 2.690 | 16,2 |
| Non food retailing | 1.625 | 11,0 | 1.689 | 11,0 | 1.809 | 10,9 |
| Others | 2.378 | 16,2 | 2.587 | 16,7 | 2.776 | 16,7 |
| Total | 14.666 | 100 | 15.204 | 100 | 16.583 | 100 |
Tab.6 The most important franchising sectors by number of franchisors
| Sectors | 2002 | % share | 2003 | % share | 2004 | % share |
|---|---|---|---|---|---|---|
| Services | 293 | 46,6 | 297 | 44,7 | 300 | 43,0 |
| Clothing/fashion | 150 | 23,8 | 157 | 23,6 | 169 | 24,2 |
| Non food retailing | 71 | 11,3 | 77 | 11,6 | 84 | 12,0 |
| Homewares | 39 | 6,2 | 43 | 6,5 | 49 | 7,0 |
| Hotels and catering industry | 36 | 5,4 | 41 | 5,9 | ||
| Variety retailing | 19 | 3,0 | 25 | 3,8 | 25 | 3,6 |
| Others | 56 | 8,9 | 30 | 4,4 | 30 | 4,3 |
| Total | 628 | 100 | 665 | 100 | 698 | 100 |
The fastest growing sectors in terms of turnover in 2004 have been ”Clothing/fashion”, “Homewares”, “Hotel and catering industry” (Table 7). “Homewares”, “Hotel and catering industry” and “Variety retailing”, have shown the highest rate of growth in terms of number of brands (Table 8).
Tab.7 Fastest growing sectors in terms of turnover
| Sectors | 2003 (Mln Euro) | 2004 (Mln Euro) | % change |
|---|---|---|---|
| Clothing/fashion | 216 | 269 | 24,5 |
| Homewares | 56,7 | 70,4 | 24,2 |
| Hotel & catering industry | 59,5 | 69,5 | 16,8 |
Tab.8 Fastest growing sectors in terms of number of franchisors
| Sectors | 2003 | 2004 | % change |
|---|---|---|---|
| Homewares | 43 | 49 | 14,0 |
| Hotel & catering industry | 36 | 41 | 13,9 |
| Variety Retailing | 77 | 84 | 9,1 |
Consulting companies, associations and institutions
Quadrante Srl is one of the leading Italian consulting companies in the field of franchising. Every year Quadrante Srl issues an updated analysis of the sector in Italy:
Quadrante S.r.l.
Via San Gregorio 53
20124 Milano
Italy
Tel: +39 0266982005
Tel: +39 026705298
Fax: +39 0287390943
www.annuariodelfranchising.it
www.quadrantefranchising.it
gbonani@quadrantefranchising.it
Assofranchising is the organisation representing Italian Franchising. A founder member of the E.F.F. – European Franchise Federation - Assofranchising is the only Italian member.
Assofranchising (Associazione Italiana del Franchising)
Viale Majno, 42
I-20129 Milano
Tel. 0039/02/29003779 - 02/36569461
Fax. 0039/02-6555919
E-mail. assofranchising@assofranchising.it
Web. www.assofranchising.it
Federazione Italiana Franchising is an organisation offering information on several economic, legal end regulatory franchising issues:
Web. www.fif-franchising.it
www.infofranchising.it
Comprehensive and informative Web-site on Franchising in Italy : it contains very interesting information on the sector's exhibitions, it gives a good overview on existing brands and offers updated news and interviews on a number of issues concerning franchising.
www.betheboss.it is an international on-line meeting point for franchisors and franchisees. The website gives franchisors the opportunity to promote their profiles and to look for the appropriate franchisee; on the other hand franchisees can enter, for free, a comprehensive database of franchisors and look for the right business opportunity.
www.annuariodelfranchising.it
Comprehensive on-line directory of Italian franchising brands
Media and promotional channels
The promotion of a foreign brand on the Italian market should be carried out, among others, attending the key sector exhibition, which takes place yearly in Milan and by implementing an advertising campaign on specialised magazines.
Main Italian exhibitions
Expo-Trade
Expo Cts
Via Govone Giuseppe, 66
Milano
Tel. 0039 02349841
E-mail. expo@expocts.it
E-mail: franchising@expocts.it
Web. www.franchising . expocts.it
Dates: 21 st –24 th of October 2005 (once a year)
Roma Expo Franchising
Gruppo Publimedia Srl
Via Monterotondo, 14 - 00199 Roma
tel: 0039 06 86 200 792
fax: 0039 06 86 200 990
e.mail: franchising@gruppopublimedia.it
www.gruppopublimedia.it
Dates: 7th . 9th of April 2006 (once a year)
Specialised magazines
AZ Franchising
JRP Srl
Via Quarnero 1
I-20146 Milano
Tel. 0039 02467781
Fax. 0039 0246778111
E-mail. info@jrp.it
Web. www.azfranchising.it
News and discussion forums on some economic, legal and regulatory issues concerning franchising.
Millionaire
Via Ariberto, 3
I-20123 Milano
Tel. 0039 02 83303466
Fax. 0039 02 83303426
Web. www.millionaire.it
The magazine offers a wide range of news, discussion forums and success stories targeted to small start-up companies
- The statistics have been extracted from “Il Franchising in Italia – Proiezioni 2002/Proiezioni 2003”, Quadrante Srl - Franchising and Management Services [back]