Online stores in the world of franchise; 'much to gain'

Research conducted on behalf of Koelewijn & Partners and Franchise+ reveals that franchise organizations in the Netherlands vary greatly in their approach to e-commerce activities. This variation is not only evident in how an online store is presented to the consumer but also in the agreements made with franchisees regarding this aspect. Some notable conclusions are:

• The cooperation and support of the franchisee are crucial for a successful online store. Therefore, the franchisee should have a (direct) financial interest.
• Franchisees having their own online stores without coordination usually leads to undesired internal competition and a weaker brand image.
• Many customers prefer picking up ordered products in-store, which happens surprisingly often.
• The allocation of e-commerce revenue is done based on customer location (service areas), collected orders, or customer preference. In the latter case, service or additional sales can occur through the involved branch.
• Franchise models can leverage physical stores in the competitive landscape by focusing on cross-channel retail, connecting online and offline stores.

When setting up an online store alongside existing physical stores, a franchisor should consider customer preferences and the economic interest of their franchisees. It is important to choose a central approach in consultation with franchisees, with the franchisor initiating and maintaining control. It is recommended that franchisees maximize their share of the e-commerce revenue. Conversely, franchisees should also contribute to the investments and costs of e-commerce. Together, the physical store and the online store will form the franchise that an entrepreneur operates.

If you are a franchisor or franchisee interested in learning more about your options, please contact info@koelewijn.nl or call: 035-5485946