Franchising in Germany: What is it like?

Franchising is an internationally successful business model. A multitude of companies are already running franchise networks in a variety of different national markets and by doing so, have been able to successfully position their brands. Nevertheless, there is still a great deal of potential available when it comes to expanding franchise networks into Germany.

The Federal Republic of Germany is home to the strongest and most stable economy in Europe. While many nations in the world experienced times of economic insecurity and the European Monetary Union suffered a crisis in the last decade in particular, Germany was able to prove the sustainability of its economic system. On top of this, Germany also demonstrated that it is a particularly ideal location for franchise systems in all sectors.

The German Franchise Association has set itself the target of supporting franchise systems from outside of Germany in entering into the German market and accompanying them in all stages of this process. The “International Committee” has been created within the Association to focus on this objective. The German Franchise Association itself boasts a tightly-knit international network. We therefore invite you to come and discover and conquer the German market for your franchise system and to make the most of the outstanding conditions available in our country. Are you planning to expand into Germany and need local consulting support? The Franchise Association will be happy to answer your initial questions. In addition, the Association has associated experts – consultants and lawyers – who provide specific support. An overview can be found here: Download PDF

2023 ends with a stable plus

Despite an ongoing recession and political uncertainties in Germany, there is a stable growth in the franchise industry. Last year, the approximately 910 franchise systems had a total of around 147,300 franchise partners, representing a 2.3% increase compared to the previous year. The number of employees in the approximately 190,181 franchise businesses has risen by 2.1% to a total of approximately 831,443. Particularly noteworthy is the significant increase in the total revenue of the franchise industry by 3.8% to 147.6 billion euros.

The sectoral spread: Services remain in first place

The service sector retains its position at the top, with 48%. Remaining in second place is gastronomy and leisure, with 19%. Trade places below them at 19%. Craft, with 14%, remains fourth. This ranking shows that the service sector has continued to develop its top position. In addition, the movement of previous years that brought these sectors to their current positions seems to have stabilised.

German Franchise Industry, breakdown by industry

Franchise climate index (FKI) shows: the mood is at the end of the year better.

Twice a year, the FKI assesses the economic climate within member systems. After a low point of 126% in the second half of 2022, the mood recovered to 135% at the end of 2023. The actual climate perceived was somewhat better than expected - probably due to current social and economic uncertainties. The overcome Corona crisis, good cooperation with partners and trust in the franchise model have a positive effect on the business climate. Factors that have a negative impact include the tense financing climate, bureaucratic hurdles, a lack of franchise partners and the ongoing recession.

Our members

We unite around 300 franchise brands and help them find new partners and grow. The complete list is currently available only on our website in German. Feel free to use Google Translate, until we get all our pages in English, too. 

Our brands