How to franchise your business in Europe

To franchise your business in Europe, prove the concept in a pilot unit for at least a year, turn the know-how into an operations manual, build a financial model that works for the franchisee after fees, register your trade mark, prepare disclosure content for each target country and have a local lawyer draft the agreement. Only then do you build the sales kit and talk to candidates. The order matters: each step produces inputs for the next, and skipping one usually shows up later as a dispute with a franchisee.

Below is the sequence we follow, who does what at each stage and where European rules change the plan.

Step 1. Check that the business can be copied

Franchising sells a repeatable result. Before anything else, answer three questions with numbers:

• Does the unit make money without the founder working in it every day?
• Can the product or service be delivered to the same standard by people you trained in weeks?
• Is there demand in the target city or country, and who already serves it?

If the third question is open, start with a market analysis of the target country before spending on documents.

Step 2. Run a pilot unit

The European Franchise Federation's Code of Ethics says the franchisor shall have operated a business concept with success in the relevant market, for at least one year and in at least one pilot unit, before starting its franchise network in that market. Italy writes a similar idea into law: Law 129/2004 requires the franchisor to have tested its business formula on the market before setting up a network.

Note the phrase "in the relevant market". A brand from Ukraine or Canada with ten units at home is still new in Germany. Buyers and their advisers will ask how the concept performs locally. The article on the pilot unit covers what to measure.

Step 3. Build the franchisee financial model

This is the step owners most want to skip and the one that decides whether the franchise sells. The model shows the franchisee's investment, monthly P&L, break-even and payback, using:

• your real unit data (sales by month, cost of goods, staff hours);
• local costs in the target market (rent, wages, utilities, taxes);
• the fees the franchisee will pay you.

Your own unit often hides costs: the founder's unpaid time, an old lease, equipment bought years ago. The franchisee will pay full price for all of them.

Step 4. Set the fee structure

Entry fee, ongoing royalty, marketing fee and any charges for supplies, software or training. Each fee should be tied to something the franchisor delivers. The financial model from step 3 tells you how much the unit can carry. Details are in franchise fees and royalties.

Step 5. Write the operations manual

The manual is the written form of your know-how: opening a unit, daily routines, recipes or service scripts, quality standards, suppliers, staff roles, reporting. Regulation (EU) 2022/720 defines know-how as practical information that is secret, substantial and identified, and the Dutch Civil Code uses the same three words in its definition of a franchise formula. A manual is how you show it is identified. See the guide to the operations manual.

Step 6. Protect the brand

A franchise licenses your brand, so the brand must be yours in the target market. An EU trade mark is filed with the EUIPO and gives one registration for all member states. The EUIPO lists the basic fee for an electronic application at 850 € for one class, 50 € for the second and 150 € for each further class. Check for conflicting marks before filing; an earlier conflicting right in a single member state can block an EU-wide application.

Step 7. Prepare disclosure content for each country

There is no EU-wide disclosure law. Several countries set waiting periods between handing over information and signing:

Other countries, including Spain, Belgium and Sweden, have their own rules, and Germany and Poland rely on general civil law. The full table with links is in disclosure laws by country.

We prepare the business content of the disclosure: the description of the network, the financial information, fees, obligations and support. The lawyer turns it into the document required in that country.

Step 8. Have the agreement drafted locally

The agreement fixes territory, term, fees, standards, support, reporting, non-compete and exit. EU Regulation 2022/720 sets limits on non-compete clauses that count for the block exemption. A franchise lawyer in the franchisee's country drafts it from your commercial terms. Our guide to the franchise agreement lists the clauses and the points to agree before the lawyer starts.

Step 9. Build the sales kit and recruit

Once the documents are in place:

• an investor deck and one-pager built from the same figures as the financial model;
• a franchise landing page with a qualification form;
• an FAQ for candidates;
• lead generation campaigns in the target country and language.

Every number in the sales material must match the disclosure. The EFF Code requires recruitment advertising to be free of ambiguity and misleading statements. On the Fast Coffee project we removed income promises and a "guaranteed money back" line from the franchise site for exactly this reason.

Who does what

Common mistakes

• Selling the first franchise to a friend before the documents exist. The relationship survives until the first bad month.
• Copying a franchise agreement from another brand. It carries their fee logic and their country's law.
• Translating the home-market package word for word. Costs, wages and consumer habits change, and so do the numbers.
• Promising territory exclusivity before mapping the market.

Next step

If you are weighing a European launch, start with a paid 30-minute consultation (100 €) or a written readiness review (from 200 €). We look at your units, numbers and target countries and tell you which of the nine steps you can skip and which need work. The full service is described on the franchise development in Europe page.