18 September 1970. This is the birth date of Italian franchising. Since then, a lot of ground has been covered, so much so that today a total turnover of 26,154 million euro is estimated for Italian franchising.
But what is meant by franchising and what is the relationship with the world of eCommerce?
Let’s try to clarify.
What is a Franchise
Borrowing Assofranchising‘s definition, franchising, or commercial affiliation, is a contractual formula for the distribution of goods or services between an entrepreneur, franchisor or franchisor, and one or more entrepreneurs, affiliates or franchisees, who are legally and economically independent of each other.
In other words, the franchisor grants the franchisee the use of its business formula, including the right to exploit its know-how, trademarks and distinctive signs, together with other services and forms of assistance enabling the franchisee to run its business with the same image as the franchisor.
The numbers of franchising in Italy
According to the data of the latest Assofranchising Italy Report conducted in cooperation between Assofranchising and the Permanent Observatory on Franchising of Rome’s La Sapienza University, there are 56,441 franchised outlets, for a total of 980 franchisors and a total turnover of 26,154 million euro.
The sectors in which this formula is most widespread are services (24.5%), clothing (19.3%), catering (18.3%), specialised trade (12.8%), care and wellness (11.2%), home (4.8%) and, finally, large-scale distribution (4.4%).
An interesting figure also concerns franchises in the field of logistics, which now account for about 2% of the total.
The advantages of franchising
Opening a franchise business offers countless advantages, including the opportunity to enjoy know-how, distinctive signs and the necessary assistance from the franchisor.
Opening a franchise shop, therefore, is equivalent to expanding an already established and successful business, following the standards of the parent company, with simplified management, reduced costs, lower business risk and easier access to credit.
Online franchising
With the development of the eCommerce sales channel, the franchising formula has also evolved, making it possible to run an online business through this method. The main advantage of this business lies in the very low initial investment required from each franchisee. Many brands, in fact, make it possible to run a full-fledged eCommerce dropshipping business.
Dropshipping franchising is a recent form of business that develops online and in which the franchisor company acts as a supplier and courier of the goods, without the need for a warehouse or physical shop. When a customer places an order online from the entrepreneur’s eCommerce site, the entrepreneur in turn orders from the franchisor’s site, which in the meantime will send, by courier, the parcel to the customer, at its own expense, guaranteeing return.
In Italy, one of the leading dropshipping franchises is MBE Worldwide. With over 2,900 Service Centres in 53 different countries and more than 560 franchised outlets in Italy alone managed by independent entrepreneurs within a Franchising agreement, MBE is in fact the world’s leading platform in offering outsourced solutions in the fields of eCommerce, shipping, logistics, and printing and marketing services to support small and medium-sized enterprises and individuals.
Thanks to dropshipping, therefore, the complications associated with managing an eCommerce business – and logistics in particular – are reduced, since the management of warehousing, stock and orders is entrusted to a third-party company that directly handles relations with suppliers.
In this business model, logistics plays a key role.
GEL Proximity for Franchise Networks
Thanks to the support of technology developed by GEL Proximity, it is possible to enable networks and chains of shops by easily connecting them with the world of online shopping. In this way, the retail world is ‘networked’, adding to the network of more than 45,000 Pick-up Points and Lockers already active throughout the country, thus making it possible to expand offers to current customers and make contact with potential new ones.
And that’s not all. The platform also includes a number of functionalities specifically designed for Click & Collect.
GEL Proximity is a real alternative to traditional Home Delivery Logistics, to offer eCommerce customers more sustainable and flexible delivery and return options within a network of Franchised Stores. In fact, it is possible to upload and enable a physical network of shops on the GEL Proximity interactive map – but also to customise the radius of Proximity logistics services and enable other third-party Points of Sale by presiding over areas of territory where one’s own Retail network is not present. The benefits of ‘networking’ the physical space are obvious: a concrete increase in walkability, cross-selling actions and direct customer management, control over in-store shipping processes.
If you have a Franchising network and are interested in ‘networking’ it, contact us here.
