Is your Franchise Fit for Spain?
Alicia Serralta, Editor, Franquicia Directa
If you want to start franchising in Spain, you need to know that you will face more legal barriers than in most countries, such as the United Kingdom, to get your business off the ground. To start franchising in Spain, you should include the product/trade name franchising, as this can be easily transferred while the legal differences between your home country and Spain can cause you some trouble if you want to stay with the same business format.
In Spain, the franchise system is regulated by the Royal Decree 419/2006 of April 7, where it is said that every company that wants to act as a franchise should be registered in the Franchisors Registry. The prior Royal Decree has been amended by 201/2010 of 26 February changing some aspects about this registration so the franchising activity should be communicated to the Registry within three months after the beginning of the activity. There are also certain rules and principles (including agency laws), contained in the Spanish Civil Code 1889 and Commercial Code.
According with these laws, the franchisor should deliver a pre-contractual disclosure document at least 20 days before the execution of a contract or the payment of any fee by the franchisee. This document should include the register number; description of the franchisor's experience, the date the business became a franchise, the franchise network's development and level of investment required, as well as a general description of the franchise (explaining the system, its know-how and the technical assistance that the franchisor will provide).
According to a Spanish Franchise Association (AEF) report, there are 919 franchise brands in Spain, of which 172 are from foreign countries. The report states that there are 42 French franchise brands, 41 US and Canadian brands, 9 brands from UK and Ireland and 4 German franchises operating in Spain. All of these brands have been operating in Spain for a long time and have adapted to the needs of Spanish consumers.
Below we have ranked the franchise industries that are best-positioned to succeed in Spain, based on the number of establishments and turnover figures.
- Food (supermarkets, restaurants, pubs, fast food, catering, specialised shops, etc.)
- Travel Agencies
- Health and Beauty
- Courier Franchises
If you need financing help while entering your business in Spain, you can go to Banco Sabadell, a member of a European assistance network that has been helping franchise chains develop in Europe since 1988.
Finally, Eduardo Abadía, manager of the Spanish Franchise Association (AEF), recommends you to get in touch with your country’s embassy in Spain to know more about the steps you need to start your franchise in Spain.
- International Expansion by U.S. Franchisors, (1996) Washington, D.C., International Franchise Association Education Foundation, Inc.
- "Franchising: Selecting a Strategy for Rapid Growth," Long Range Planning, 24 (August), 74-85 (1991), Hoffman, Richard C. and John F. Preble.
- “European franchise disclosure laws”, October 2009
- Ministry of Industry, Tourism and Commerce, Spanish Government
- Franchising in Spain, Field Fisher Waterhouse,
- Spanish Franchise Association (AEF),
- Financing Franchising, Antónia Štensová, PhD., University of Economics in Bratislava, BIATEC, Volume XII, (2004)