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Different forms of franchise in Belgium

If you’re interested in the property market and are considering starting your own agency, you will undoubtedly be familiar with the franchising system. This business model is not exclusive to the property industry, and a number of different franchising options exist, specific to a variety of industry, with textiles and restaurants being some of the more common examples. The franchising system involves a partnership with a top brand – known as the franchisor, and an independent business or agency, known as the franchisee. As franchising is used in a variety of different fields, the exact nature of the franchising model will vary accordingly. Here, therefore, are some different types of franchising model used in Belgium outside the real estate market.

Manufacturing, retail and industrial franchising

To start, let’s take a look at the different types of franchise in Belgium that have less in common with property franchising. These three types of franchise – in the manufacturing, retail and industrial sectors – all share a focus on the production and sale of physical goods. In a manufacturing franchise, goods are produced by the franchisor and then marketed via a network of franchised points of sale. In a retail or distribution franchise, on the other hand, the franchisor assumes the role of a central procurement function and buys goods that are produced by third-party manufacturers. In this case, the franchisee focuses on distributing the goods for sale. Finally, industrial franchise models do not focus on a specific product, but on an entire production operation, whereby the franchisee produces the goods in accordance with the franchisor’s instructions. Nevertheless, this does not necessarily mean that franchisees only focuses on technical aspects of manufacturing: they can also handle the distribution of the finished products.

Service franchising in Belgium

As property franchising does not focus on the production or distribution of physical products, it is a service franchise. In this type of franchise, the franchisee delivers a service in accordance with the franchisor’s instructions. Nevertheless, these pure service franchises should be distinguished from services involving the delivery of products that are directly linked to the services in question. In both cases, the franchisee markets an original concept created by the franchisor for the service industry. The success of the business therefore depends, to a great extent, on the franchisor’s skills and expertise. Property franchising in Belgium falls firmly within this category, and because there are no products that are directly related to the service, property franchising uses a purely service-related franchise model.

“Master franchises”

The final type of franchise is known as a “master franchise.” In this type of franchise, a franchisee obtains the rights to a specific territory (such as an entire country like Belgium) with the right to enter into sub-agreements with its own franchisees. This means that the master franchisee acts both as a franchisee to the major brand and as a franchisor to its sub-franchisees within its defined territory. On the one hand, it is obliged to account to the franchisor for the status of its territory, but also performs all the normal functions of a franchisor for the franchisees it is responsible for. This type of franchise is special because it can be applied to any of the various franchising models described above, from manufacturing, retail and distribution through to industrial or service franchising. It also requires a much more highly developed infrastructure than a normal franchise operation, as well as more extensive financial resources.

Status of Belgian property franchising

That’s a short summary of all the different franchising options in Belgium. So, if you’re interested in becoming a franchised estate agent, you should focus your research on the franchised services model, and pure services in particular. Because you won’t be selling or reselling any goods, there won’t be any logistics and delivery issues to address in relation to these goods. On the other hand, becoming a franchised estate agent enables you to benefit from the major property brand’s approved concept, experience and brand recognition. As the quality of your franchising experience depends heavily on your franchisor, choose the right franchisor with care, ensuring that you take your first steps towards becoming a franchisee with all these issues in mind.

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Engel & Völkers
Licence Partner Regional Office Belgium

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