Franchising confirms to be increasing in Italy
The 2020 Assofranchising survey, referred to 2019, confirms that in Italy franchising is one of the main sectors of Italian economy, with an average yearly increase of 5%. This is due to a number of reasons, such as that in Italy franchising has grown relatively later than other countries. The economic crisis caused by the Covid epidemic has been impacting deeply all also in Italy, but is having a limited effect on franchises, compared to other commercial activities. In this article we examine the main data concerning the franchising sector in Italy.
1. In 2019 franchising has further grown in Italy, according to the 2020 Assofranchising survey
Franchising has been constantly developing in Italy over the last 30 years, and is increasingly becoming a profitable investment, also for foreign franchisors.
According to the 2020 survey made by Assofranchising the main Italian franchising association), referred to the year 2019, franchising is confirmed to be healthy and constantly growing. In fact, franchising is one of the main sectors of Italian economy, with an average yearly increase of 5%.
In brief, the Assofranchising survey shows that all the main franchising performance indicators in Italy are in sharp growth:
- 56,441 stores (2,555 stores opened in 2019);
- 217,150 workers employed in the networks (10,359 new jobs created);
- 980 brands active;
- 100 foreign franchises active, of which 71 master franchisee of foreign franchisors and
- 29 foreign franchise operating directly with franchisees;
- 26 billion Euros of total turnover (up by + 4,5% compared to 2018).
These positive numbers regarding franchising in Italy are not surprising, for number of reasons:
- in general, franchising, being a model based on cooperation and risk-sharing, has a stable advantage over other business models in market competition;
- Italy represents an important world market, with nearly 60 million people, most of whom have a high standard of living compared to many other countries;
- in Italy, franchising has grown relatively later than other countries; being relatively new, there are wide market possibilities and, therefore, huge investment opportunities, also for foreign franchises, in a wide range of different commercial activities and services (such as food&beverage, health, education, fitness, etc.);
- the Covid epidemic, although it has been impacting deeply all sectors and activities also in Italy (as well as all over the world), is having a limited effect on franchises, compared to other commercial activities, given the characteristics of the franchising model that make it easier for franchisees – rather than other independent entrepreneurs – to face the effects of such crisis.
We will examine these data more in detail in this article.
2. Franchising in Italy continues to increase also in 2019: the main indicators
According to the Assofranchising 2020 report, the franchising sector in Italy records a 4.4% increase in active franchise networks – defining as such the franchise networks consisting of at least 3 points of sale, including direct and franchised – is healthy and constantly growing, confirming to be one of the best formula for trade in the Italian market.
In particular, as shown in the following table 1), in 2019 there were in Italy 980 active franchise networks, increased of 19 units compared to 2018. Of the total existing networks, 90% were born in Italy, while 10% are foreign networks. Out of this percentage, 7% of foreign franchise brands are active in Italy through Italian Master franchisees, while the remaining 3% by operate directly with Italian franchisees.
Table 1): franchising networks active in Italy in 2019
| Value
absolute |
Value % | |
| Active networks | 980 | 100% |
| Italian networks | 880 | 90% |
| Master franchisees of foreign franchisors | 71 | 7% |
| Foreign franchisors operating directly with franchisees | 29 | 3% |
Source: Assofranchising Italia 2020 Report
As shown in the following table 2), the franchise networks’ turnover in 2019 amounted to €. 26,153,789,500, increased of 4.4%. The number of the points of sale in Italy is also growing (+ 4.7%) as well and those opened abroad (+ 1.8%); this highlights the propensity and openness to international markets of franchising. The number of employees in the Italian franchising system is also growing (+ 5%), while the average number of employees per points of sale remains unchanged.
Table 2): Main indicators of the franchising system in Italy, 2018-2019
| Indicators | Measure | Reference year | Reference year | Difference 2019 on 2018 | |
| 2018 | 2019 | Absolute value | Value % | ||
| Turnover | N° | € 25.041,16 | € 26.153,79 | € 1.113 | 4,4% |
| Active franchise networks | N° | 961 | 980 | 19 | 2,0% |
| Franchising points of sale (PVF) | N° | 53.886 | 56.441 | 2.555 | 4,7% |
| Italian points of sale abroad | N° | 10.845 | 11.035 | 190 | 1,8% |
| Italian franchise networks abroad | N° | 174 | 178 | 4,0 | 2,3% |
| Master franchisees of foreign franchisors | N° | 72 | 71 | -1,0 | -1,4% |
| Foreign networks directly operating with franchisees | N° | 28 | 29 | 1,0 | 3,6% |
| Employees employed in networks (PVF) including the franchisee | N° | 206.791 | 217.150 | 10.359 | 5,0% |
| Average size of franchise networks (points of sale) | N° | 56,1 | 57,6 | 1,5 | 2,7% |
| Average size of Italian franchise networks abroad (franchise stores) | N° | 62,3 | 62,0 | -0,3 | -0,5% |
| Average employed per franchise point of sale | N° | 3,8 | 3,8 | 0,0 | 0,3% |
Source: Assofranchising Italia 2020 Report
Table no. 3) demonstrates how franchising in the last four years in Italy has consolidated the indicators in terms of turnover (+ 12.2%), points of sale (+ 12.5%) and employment flow generated (+ 15.6%) The data relating to the number of active franchise brands are also positive increasing by 3.5%.
Table 3) – Franchising overall volume of growth 2015 – 2019 in Italy
| Indicators | 2019 vs 2015 |
| Turnover | 12,2% |
| Active franchise networks | 3,5% |
| Franchising points of sale (PVF) | 12,5% |
| Employees employed in franchise networks including the franchisee | 15,6% |
Source: Assofranchising Italia 2020 Report
3. Geographical distribution of franchising in Italy
Analyzing the distribution of franchising in Italy from a geographical point of view, the Italian territory can be divided into four macro-areas:
- North-West Italy, where most of the franchisors are concentrated at national level (359; 37.8%); in particular, in 2019 there was an increase of + 2.6% compared to 2018, with 9 new franchisors;
- Center Italy, that remains unchanged in the ranking, with 200 franchisors (21% of the total franchise stores in Italy);
- North-East Italy, the third area in terms of number with 198 brands (20.8% of the total number of franchise brands in Italy);
- South-Islands Italy, last in the standings with 194 franchisors, equal to 20.4% of the overall franchise brands in Italy.
As it is shown by table 4), the Italian regions hosting the largest number of franchisors are Lombardy (277) and Lazio (108), followed by Veneto (91), Campania (88) and Emilia Romagna (85).
Table 4): Subdivision by Regions
| Region | Franchisors No. | Franchisors per Areas |
| Piemonte | 70 | North-West: 359 – 37,8% |
| Valle d’Aosta | 1 | |
| Liguria | 11 | |
| Lombardia | 277 | |
| Veneto | 91 | North-East: 198 – 20,8% |
| Trentino Alto Adige | 8 | |
| Friuli Venezia Giulia | 14 | |
| Emilia Romagna | 85 | |
| Toscana | 55 | Center: 200 – 20% |
| Umbria | 12 | |
| Marche | 18 | |
| Lazio | 108 | |
| Sardegna | 7 | |
| Abruzzo | 14 | |
| Molise | 3 | |
| Campania | 88 | |
| Basilicata | 4 | South, Islands: 194 |
| Calabria | 10 | |
| Puglia | 44 | |
| Sicilia | 31 | |
| Total | 951 | 100% |
Source: Assofranchising Italia 2020 Report
The following table 5) shows the franchise points of sale In Italy, divided by single region. The data confirm the regional primacy in the number of franchise stores of Lombardy (9,182), followed by Lazio which, compared to other regions, records the largest percentage increase compared to 2018 (+ 6.1%), while Sicily is in third place with an increase in stores of 4.6% compared to 2018. The Southern area of Italy is the first in terms of number of stores (17,788, up by + 4.8% compared to 2018). In terms of profitability, in 2019 the South area generates the best result, for a total of €. 8,074,678,080 followed by the North-West which in the same period produced € 7,628,601,976; the Center and the North-East are placed immediately after, registering however a very high incidence on total production.
Table 5): Franchise points of sale, breakdown by region
| Region | Points of sale | Region | Points of sale |
| Lombardia | 9.182 | Sardegna | 1.880 |
| Lazio | 6.539 | Liguria | 1.577 |
| Sicilia | 4.970 | Marche | 1.551 |
| Piemonte | 4.634 | Abruzzo | 1.370 |
| Campania | 4.329 | Friuli Venezia Giulia | 1.109 |
| Puglia | 3.918 | Umbria | 988 |
| Veneto | 3.843 | Trentino Alto Adige | 865 |
| Emilia Romagna | 3.418 | Basilicata | 663 |
| Toscana | 2.851 | Molise | 435 |
| Calabria | 2.102 | Valle d’Aosta | 216 |
| Total points of sale | 56.441 | ||
Source: Assofranchising Italia 2020 Report
4. Franchising in Italy: description of the different production sectors
The following table 6) indicate the breakdown by macro-product sectors of the franchisors and the relative distribution by Area in Italy. In particular:
- The Clothing sector remains substantially stable, with a total of 189 active networks, in increase compared to 2018 (187), of which more than 33% are located in the North-West area.
- the Services sector, which constitutes 24.4% of the total number of brands in Italy, recorded a good trend compared to previous periods (+ 1.7%), thanks to the increase in the number of active networks (+4 units ).
- the specialized trade sector, which represents a share of 12.7%, recorded an expansion of 3.3%, with a total of 125 active networks compared to 121 in 2018.
- the Catering sector, which represents an 18.3% share, continues to expand, increasing by 7 units, with an increase of + 4.1%.
- the Beauty sector, which represents a share of 11%, is up 1.9% compared to previous periods.
- the Home sector, which represents 4.8%, remains stable compared to the previous year with a total of 47 networks active in the Italian territory.
the GDO sector represents only a small portion of the total franchising system (4.4%), but has the greatest impact on the total turnover (35.6%), given that the sum of production between GDO food and non-food large-scale distribution generates over 9 billion euros; in 2019, the number of active networks remains unchanged (43).
Table 6): Sectorial breakdown of the networks active in Italy
| Commodity dimension | North- West area | North-East area | Center area | South area | Foreign Networks | Total 2019 | Total 2018 | Difference |
| Clothing | 63 | 40 | 31 | 47 | 7 | 188 | 187 | 1,1% |
| Services | 89 | 41 | 51 | 50 | 8 | 239 | 236 | 1,3% |
| Specialized trade | 44 | 21 | 34 | 24 | 1 | 124 | 121 | 3,3% |
| Catering | 63 | 53 | 28 | 32 | 3 | 179 | 172 | 4,1% |
| Beauty, personal care e well-being | 41 | 9 | 32 | 23 | 5 | 110 | 108 | 1,9% |
| Home | 16 | 13 | 10 | 6 | 2 | 47 | 47 | 0,0% |
| GDO | 21 | 14 | 6 | 2 | 0 | 43 | 43 | 0,0% |
| Other | 21 | 7 | 8 | 8 | 3 | 47 | 47 | 0,0% |
| Total | 359 | 198 | 200 | 194 | 29 | 980 | 961 2,0% | |
Source: Assofranchising Italia 2020 Report
5. Franchisee’s investments, points of sale’ surface, contract duration
As regards the initial investment that the Franchisee must make to start undertaking the business on the network, table 7) shows a near equity in the percentages of active networks whose initial investment is less than 100,000 euros. Among these, there is a particular concentration in the businesses that require between 10,001-20,000 euros (17.9%) and 50,001-100,000 euros (19.2%).
Table 7): Franchisee’s initial investment
| Initial investment | % |
| 0-10.000 € | 15,5% |
| 10.001-20.000 € | 17,9% |
| 20.001-30.000 € | 13,8% |
| 30.001-50.000 € | 17,3% |
| 50.001-100.000 € | 19,2% |
| 100.001-150.000 € | 5,8% |
| 150.001-300.000 € | 6,5% |
| > 300.000 € | 4,0% |
| Total | 100% |
The extension of the surface includes the exhibition area but also warehouse spaces or service rooms, which in any case affect both the aesthetic and functional level of the structure. The points of sale with an area between 0-20 m2 are those that are least present in the franchising system (1.2%). Small surfaces (between 21 and 60 m2) are the most widespread and growing compared to 2018, going from 38.5% to 39.7%. On the other hand, the number of points of sale decreased between 251 and 500 m2, passing from 12% to 10.3%. Full data are shown in Table 8).
Table 8): Extension of the stores
| Average surface | % |
| 0-20 m2 | 1,2% |
| 21-40 m2 | 18,6% |
| 41-60 m2 | 21,1% |
| 61-80 m2 | 14,1% |
| 81-100 m2 | 12,3% |
| 101-150 m2 | 9,1% |
| 151-200 m2 | 4,5% |
| 201-250 m2 | 2,6% |
| 251-500 m2 | 10,3% |
| > 500 m2 | 6,2% |
| Total | 100% |
As regards the duration of the franchise contracts in Italy, table 9) shows that in 2019, about 74% of contracts have a duration between 3 and 5 years, a figure substantially unchanged compared to 2018. Contract duration between 7 and 10 years goes from 4.6% to 8%.
Table 9): Duration of the franchise contract
| Duration of the franchise contract | % |
| 3 years | 28,7% |
| 4 years | 5,1% |
| 5 years | 40,4% |
| 6 years | 15,2% |
| 7 – 10 years | 8,0% |
| > 10 years | 1,6% |
| undetermined 1% | |
Total 100%
Avv. Valerio Pandolfini
On this topic you may also be interested in the article: “Franchising in Italy: 2019 confirms Italy as an increasingly attractive market for international franchise brands, but keep attention to the feasibiliy plan!”
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The information contained in this article is of a general nature and is not to be considered an exhaustive examination of the various issues, nor is it intended to express an opinion or provide legal advice. Specific legal advice must be provided with regard to individual cases.
