Franchise Business
Document Sample
fact sheet
Guidelines for starting a franchise business
Franchising has been a What is Franshising was approximately 300, the majority of
well-established concept in Franchising means that someone who has which is of Swedish origin. Comprising
Sweden since McDonalds first started his own company and has mana- some 15,000 franchise units, employing
arrived in the 1970’s to spread ged to achieve a successful business will 100,000 persons, the total turnover of
throughout the country. let one or more company owners use the Swedish franchising is approximately
company name and the business concept USD 12 billion (2006). About half of the
in exchange for some form of compensa- franchisees are active in retailing, however
tion. It is a long-term cooperation between consulting and restaurants are also
two business partners. The cooperation is common fields of business.
regulated by the franchising law and by a
franchising agreement signed by the two Top ten franchising systems in Sweden
Company Number of franchise units
parties. Franchising can be described as a
Posten Sverige AB 2,800
sort of sale permission and it may be practi- Svenska Turistföreningen 309
ced almost within any sector where products Svenska McDonald’s 235
and/or services are being marketed. There- Sibylla/Nordic fastfood 229
fore franchising is not a business entity but JCA Aktiebolag 217
AB Svenska Pressbyrån 160
rather a way of doing business.
Elkedjan 156
Färgtema 132
Characteristics Gröna Konsum 122
• The franchise agreement is set up bet- Tema Sportia AB 110
Electrolux Home Svenska AB 106
ween two independent parties, who will
Däckteam 100
continue to be independent legally and
economically. Source: Swedish Franchise Association
• In the agreement the franchisor will grant
the franchisee the right to use a company A large majority of franchising systems
name, a trademark and a system. The has started since 1990, and the number is
experience and know-how of the franchi- expected to increase in coming years.
sor is often also offered to the franchisee’s
disposal. The franchising law
• The franchisee will commit himself to As of October 1, 2006 there is a specific
the policy of the operation in order to Swedish franchise disclosure law. The law
strengthen the picture of a group of stores contains provisions on the obligation of a
with a standardized structure, quality and franchisor to give a prospective franchi-
service. see certain information before a franchise
• Normally the franchisee pays an “entry agreement is entered into. The law covers
fee” and after that a royalty that is usually all franchise agreements in Sweden, both
based on a percentage of the turnover. domestic and foreign, both Master Fran-
chise Agreements and Unit Agreements,
Franchising in Sweden both new agreements and renewal of old
Please note that the contents of this fact sheet
should be regarded as an overview of current con-
At the beginning of 2006, the estimated agreements.
ditions in Sweden. These may change and thereby number of franchising chains in Sweden
render descriptions of laws and other frameworks
inaccurate. In all individual cases we request that
advice always be sought with relevant authorities,
organizations and businesses on specific issues.
Published in September 2007
Invest in Sweden Agency P.O. Box 90 SE-101 21 Stockholm, Sweden
Phone: +46 8 402 78 00 Fax: +46 8 402 78 78 E-mail: isa@isa.se www.isa.se
fact sheet
For more detailed information please contact:
Definition of franchise agreement 7. Information about the term of the
A franchise agreement is according to this agreement, conditions for modification, Swedish Franchise Association
law an agreement by which an entrepreneur prolongation and termination of the (Svenska Franchiseföreningen)
Sofierogatan 3A, SE-412 54 Göteborg
(the franchisor) agrees with someone else franchise agreement, as well as the
Phone: + 46 31 40 55 10, Fax: + 46 31 81 10 72
(the franchisee) that the latter against economic consequences of termina- info@franchiseforeningen.se
compensation paid to the franchisor shall tion. www.franchiseforeningen.se
use the special business idea of the fran- 8. Information on how a dispute as to the The Swedish Franchise Association promotes
the franchising business concept and has
chisor for the marketing and sale of goods agreement shall be tried and what shall
approximately 100 member companies.
or services. As further conditions for an apply as to the liability for the cost of
agreement to be considered a franchise such a trial. Effectum Franchise Consulting
agreement according to this law, is that the Vasagatan 11, SE-111 20 Stockholm
Phone: +46 8 652 12 00, Fax: +46 156 17572
franchisee under agreement shall use the Other laws to be taken into consideration
info@effectumsweden.se
distinctive trade marks and other intellectual when setting up a franchising business: www.effectumsweden.se
property rights of the franchisor, as well as • The contract act Effectum is experienced in helping companies
cooperate on the occasion of recurrent con- • Intellectual property legislation and organizations to develop their franchising
business.
trols of the observance of the agreement. • The agency act
• The competition act Franchise Group AB
Obligation of the franchisor to inform Danderydsgatan 11, SE-114 26 Stockholm
In reasonable time before a franchise Registration of a company Phone: +46 8 464 75 00, Fax: +46 8 349 325
agreement is entered into, a franchisor shall In order to carry out the franchising business info@franchisegroup.se
www.franchisegroup.se
in writing give the franchisee the informa- the franchisee has to register a company.
Franchise Group is Sweden’s leading consulting
tion that is needed in consideration of the The legal company form, such as limited firm within franchising.
circumstances with respect to the implica- liability company or trading company is
tions of the agreement and other conditions. often stipulated in the agreement. The FranchiseNet i Skandinavien AB
Sofierogatan 3A, SE-412 51 Göteborg
The information shall be clear and under- procedures for starting a company are the
Phone: +46 31 40 72 00
standable. It shall at least contain: same for the franchisee as for others. info@franchisenet.net
www.franchisenet.net
1. A description of the franchise activity FranchiseNet is a link between franchisers
and franchisees. The website contains
that the franchisee is to run.
information about franchise-related issues.
2. Information on other franchisees with
which the franchisor has concluded an Advizor
agreement within the same franchise Kungsgatan 50, SE-111 35 Stockholm
Phone: +46 8 410 646 00
system and the scope of their activity.
info@advizor.se
3. Information on the compensation that www.advizor.se
the franchisee shall pay the franchisor Advizor has experienced consultants assisting
and other economic conditions for the business chains in the retail and service sectors.
franchise activity.
Advokatfirman NOVA
4. Information on the intellectual property Contact: Anders Fernlund
rights that will be granted the franchi- Grev Turegatan 14, SE-114 46 Stockholm
see. Phone +46 8 566 366 00
5. Information on the goods or services that anders.fernlund@nova.se
www.nova.se
the franchisee is obliged to buy or rent.
6. Information on the prohibition to com- MAQS Law Firm
pete that will apply during or after the Contact: Mango Kask
time for which the franchise agreement Box 7009
SE-103 86 Stockholm
will last.
Phone +46 8 407 09 00
mango.kask@se.maqs.com
www.maqs.com
Invest in Sweden Agency, ISA, attracts and facilitates foreign direct investment in Sweden. Responsible to the Ministry 2 (2)
for Foreign Affairs, ISA informs about Swedish advantages and assists foreign companies with facts, advice and
contacts when considering setting up business in Sweden. ISA cooperates with a national and international network.
