Franchise in Poland is a very popular way of doing business among Ukrainians and other foreigners. There is a huge number of franchise concepts available on the market, which provides great opportunities to choose the most suitable niche for earning, based on experience, expectations, financial capabilities, and other factors. Currently, there are over 63,000 companies in Poland operating under the franchise model. What is it, and how is this type of entrepreneurship structured? Let’s figure it out. Especially since this is a very relevant topic for many migrants from CIS countries who wish to start their entrepreneurial journey in the Republic of Poland.
What is a franchise?
In short, a franchise is a way of doing business according to the rules and requirements dictated by a specific brand (franchisor). It offers an idea, a ready and already proven concept, support in its implementation and development, and in return, receives money from each attracted partner (franchisee). An important point is that the relationship between the two parties in such a business model is built on partnership conditions, which benefits everyone: the entrepreneur adheres to the terms outlined in the contract and starts earning with the help of a well-known brand, while the brand itself increases its market presence and overall profitability.
To buy a franchise in Poland, in most cases, an initial fee is required. This is a kind of payment for the signage, marketing and mentoring support for beginner entrepreneurs, as well as the general care provided by the franchisor for the new partner at each stage of the business. Sometimes, instead of the initial fee, the franchisee pays a monthly fixed fee or a commission based on the turnover. It all depends on the franchise system.
To buy a franchise in Poland, most of the time, you need to invest your own funds in renting and renovating the premises (if necessary). In turn, the entrepreneur can count on the franchisor’s help in finding the optimal location, providing legal support for the lease agreement process, and equipping the premises according to the brand’s standards.
Before signing the contract and becoming part of a particular franchise network, the potential entrepreneur should learn as much as possible about franchising. Initially, one can familiarize themselves with the advantages and disadvantages of this business model to expand their basic knowledge.
Franchise in Poland: Advantages
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More confident start – there’s no need to create your own development plan, independently study market needs in the chosen niche, or learn from mistakes and losses. A franchise in Poland provides a ready-made solution with necessary instructions for operation. Additionally, there’s the opportunity to use developed patents or trademarks and an existing contact base.
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Reduced initial costs – private businesses require not only intellectual but also financial investment. To promote a brand requires far more resources, including advertising and developing a marketing strategy. Franchising itself guarantees much higher customer trust from the outset. Customers are more likely to choose a brand they already know. Moreover, banks are more willing to provide loans to entrepreneurs who join an already established brand.
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Free training – franchisors often organize special training sessions for new partners and their employees. This allows the necessary knowledge to be acquired without having to pay for additional education.
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Lower risk of failure – being part of a well-known network statistically reduces the chances of failure. This is especially important for people without experience who are starting their first business. Franchisors care about their partners, as their failure can negatively affect the franchisor’s reputation. Therefore, working for your own profit, you can count on ongoing consulting, marketing, and legal assistance. The franchisor will help select the most suitable office/premises and ensure the necessary visual identity, graphic design, and other formalities related to opening the business.
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Simplified delivery system – depending on the type of business, the franchisor may provide the necessary range of products. This means there’s no need to search for suppliers or negotiate with them, or buy products from wholesale warehouses. On the other hand, franchisees are often required to order goods from specific suppliers, which ensures a better price and guaranteed quality.
Franchise Disadvantages
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Dependence on the franchisor – franchising in Poland involves working in strict adherence to a set of standards and requirements. All of these are outlined in the contract, along with penalties and consequences for violations by the entrepreneur. To monitor the process, franchisors reserve the right to audit the franchisee’s business, and they also have access to all the partner’s documents.
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Limited opportunities – franchisees are generally required to work according to the parent company’s standards. Every new initiative by the entrepreneur must be approved by the franchisor, making it very difficult to implement one’s own ideas within this model.
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Franchise payment – at the beginning of the collaboration, there is a payment for the use of the trademark, logo, business idea, ready-made contacts, technical developments, etc. Some companies also require additional regular payments, such as a percentage of profits or contributions to a marketing fund. The franchisor may also apply penalties outlined in the contract for violations of certain rules.
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Contract for a specific period – when joining a franchise, there’s no guarantee that the franchisor will want to extend the contract once it expires. However, this could have its advantages: the entrepreneur will have time to analyze whether this type of business is suitable for them, and if they lose interest or don’t achieve the expected profit, they can terminate the partnership without additional costs.
These are the main pros and cons of working with a franchise in Poland. It’s difficult to point out everything objectively, as often the same aspect might be beneficial for some and a loss for others. Each franchise network is unique, so many advantages and disadvantages will depend on the type of cooperation, the business sector, and the entrepreneur’s individual expectations.
Franchise Types
There are two most common types of franchises: retail (or distributive) and service.
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Retail (Distributive) Franchise
This type involves the sale of specific goods provided by the franchisor. Examples include stores, gas stations, pharmacies, where the franchisee sells products under a well-known brand following specific standards. -
Service Franchise
This mainly refers to the food and beverage business (cafes, restaurants, etc.), as well as banking, financial, or other service points. The franchisee receives the necessary technical tools, access, and instructions to provide specific services under the franchisor’s brand.
How much does it cost to buy a franchise in Poland?
It’s difficult to precisely determine the total startup costs as they depend on many factors. The initial fee to start a franchise can range from several tens of thousands to a million zlotys. In addition to this, entrepreneurs will incur costs for rent, renovation, obtaining various permits, certificates, etc.
To buy a franchise in Poland, three main types of expenses need to be considered:
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Initial payment — this is a one-time fee paid during the signing of the contract. Its amount is determined individually for each brand. Some companies do not charge this fee from their partners, but caution is advised when signing the contract and thoroughly reviewing all the terms.
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Ongoing fee — this is a monthly fee for using the trademark license and for the support provided by the franchisor. The amount may be fixed for the entire contract period or may vary depending on the income received during a particular month.
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Contribution to the joint marketing fund — almost every company offering a franchise has a separate fund for advertising and promoting its brand. Therefore, each franchisee is required to contribute a certain amount. Only new franchisees may be exempt from this fee for a few months.
The above financial obligations represent the absolute minimum for any franchise agreement. However, the list of expenses does not end there.
Other expenses to consider:
Once you become a franchisee, you will need to deal with the following business-related expenses:
- Rent/purchase and renovation of premises
- Contributions to social insurance
- Tax payments
- Hiring and training employees
- Purchasing equipment for operation
- Business insurance
- Utility payments
- Car purchase/rent
- Additional advertising
However, despite all these expenses, starting a business in Poland through a franchise can be much easier and more profitable than launching your own idea from scratch. Of course, there are franchises with substantial financial thresholds, but there are also those that do not require large amounts of money to start. The franchise market in Poland is so rich in offers that you can easily find the most optimal options for you within a reasonable price range.
Most popular franchises in Poland:
- Żabka — chain of small supermarkets
- Carrefour Express — chain of 24-hour grocery stores
- Abc — chain of grocery stores
- Lewiatan — chain of small grocery stores
- Livio — chain of small grocery stores
- Groszek — chain of grocery stores
- Delikatesy Centrum — chain of small grocery stores
- Intermarche — chain of supermarkets
- McDonald’s — chain of fast food restaurants
- Subway — chain of fast food restaurants
- Al Capone — chain of liquor stores
- Esotiq — chain of women’s clothing stores
- Rossmann — chain of cosmetics and cleaning products stores
- Godan — party and event supplies store
- Ziebart — car restoration services
- Epaka.pl — postal and courier services
- Monetia — money transfer services
- Orlen — chain of gas stations
As we can see, the leaders of franchises in Poland are mostly networks of grocery stores and food establishments. However, recently educational concepts have also gained popularity among franchisees. Each year, over 2,000 new franchise locations open in various sectors in Poland, which indicates the strong prospects of this business model.
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