You are interested by real estate franchise, but are you aware of the different forms of franchise? As franchising is a system of partnership between an independent company, called the franchisee, and a large Belgian company, the franchisor, this model can be applied in many sectors. That is why there are different forms of franchises in different sectors. If you are thinking of starting out in a real estate franchise and opening your own independent agency, it is best to know them in more detail. So here is more information on the different models of franchising that can be found in Belgium.
Production and distribution franchises are both based on the production and sale of products. These types of franchise are very widespread, and this is also the case in Belgium. In a production franchise, as its name indicates, goods are produced by the franchisor, either under the company’s own name or under the franchised brand. The franchisee then sells the franchisor’s products.
In the case of a distribution franchise, it could be said that the franchisor plays the role of a central purchasing hub. In this case, the goods are produced by third-party companies. The franchisor’s know-how essentially consists in their method of purchase. Franchisees thus benefit from the distributor-franchiser’s capacity for centralised purchasing. These purchases can also be carried out in consultation with the franchised companies.
An industrial franchise can appear to resemble a production franchise. However, in this case the franchisor exports an entire production unit to Belgium. This enables them to decentralise their production through their network of franchisees. Unlike the production franchise, in an industrial franchise the franchisees themselves produce the goods according to standards set by the franchisor.
However, this type of franchise is not based on the technical aspect of production alone, since the franchisee is also responsible for the distribution of goods, all under the franchised brand. It therefore goes without saying that in an industrial franchise, both the franchisor and the franchisee are industrial enterprises. A type of license and the delivery of raw materials are therefore frequent elements in this type of franchise.
Another key type of franchise is the so-called service franchise. In this case, unlike Belgian industrial, production and distribution franchises, the franchisor sells an original concept and not specific products. Under the franchisor’s instructions, the franchisee provides services in compliance with this proven concept. The success of the franchised company therefore depends, to a large extent, on the know-how and the success of the franchisor’s model.
A distinction is also to be made between a product-related service franchise and a pure service franchise. In the first case, the franchisee sells a product that can be delivered by the franchisor, as in the case of catering franchises. A pure service franchise does not sell products delivered by the franchisor. This is, for example, the case of the Belgian real estate franchise.
The last type of franchise can apply to all the forms of franchise mentioned above. We talk of a master franchise when a franchisee obtains the right to create licensing partnerships with other franchisees. It thus fulfils a double function: on one hand, they are the franchisees of their franchisers, and on the other hand, they act as the franchisor of their own franchisees. Franchisors often establish a master franchise to cover a country, as in Belgium.
Those are the different forms of franchise to be found in Belgium. As mentioned above, the real estate franchise is a pure service franchise. Thanks to its proven concept in Belgium and its expertise as a franchisor, Engel & Völkers is a reliable franchisor for your future franchised real estate agency. Learn more about our system and the licenses that are still available by clicking on this link.