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April 2026
Franchising opens up new opportunities – and brings challenges, also as an additional business area. An overview of what tradespeople should know beforehand.
Adopt what others have already successfully implemented.A proven concept, professional marketing, and business support. That's the Basic idea of ​​franchisingFranchise systems exist for almost every trade. Anyone considering a second source of income should do their research. Here are the most important questions and answers.
What kind of "second source of income" do you want: Should the franchise be an additional business for your existing company? Or should it become the second pillar of your self-employment: a second business?
Those looking for an additional business have fewer options.Most franchise systems are designed for full-time employment.", says Jan Schmelzle from German Franchise Association in Berlin. According to his estimate, around one-third of franchise systems are suitable as an additional business for companies.
Whether as an additional business or a second pillar of support: "Franchising is not a sure thing.", says Paul Meyer from Leer. He founded the franchise system in 1995.One. Everything. Clean."co-founded and led for many years. Today he is known as..." independent strategy consultant He passed on his experience in acquiring solvent private clients to craft businesses.
Operations management
Operations management
Operations management
Meyer is skeptical about franchising as a second source of income."The company size is often insufficient to intensively market two business areas simultaneously. Franchising requires constant commitment and attention."
But despite all the challenges, it is the advantages and strengths that make franchising attractive. Meyer sees three main advantages:
- Professional marketing: Target group marketing is crucial for success – and established franchise systems have a great deal of experience in this.
- Business management support: Franchise services such as advertising planning, cost accounting, and benchmarking allow businesses to better manage their marketing and optimize their overall operations. "Businesses that consistently use these tools achieve above-average results," says Meyer.
- Exchange with like-minded people: In a system with exclusion of competitors, companies meet partners who openly discuss successes, mistakes, and their figures. "When I see in a business comparison that others are achieving higher hourly rates, it's incredibly motivating," says the strategy consultant.
"The biggest advantage is the proven business model."This is something," adds Jan Schmelzle from the German Franchise Association. "Franchisors have thoroughly tested their concepts." Because only if the system works do both sides earn money.
These advantages come at a price for franchisees:
- Entry fee: It usually ranges between 5.000 and 25.000 euros and secures access to the system, according to Schmelzle.
- Investment costs Existing businesses can often utilize their existing infrastructure. However, depending on the business's initial situation and the system's focus, additional investments in machinery, tools, vehicles, or even the business premises may be required. Not to be forgotten are the costs associated with branding, such as vehicles and workwear in the system's corporate design.
- Franchise fee: During operation, a fee is charged, which, according to Schmelzle, usually amounts to a percentage of net sales. "Depending on the industry, this can range between 2,5 and 20 percent." The franchisor uses this fee to finance the system headquarters and its services.
- Additional fees: Additional costs may be incurred for services such as marketing or IT services.
Schmelzle advises getting a precise overview of the costs."This is part of the preliminary discussions, and franchisors must provide transparent information."
You'll also find this out in the preliminary discussions: "During the pre-contractual clarification phase, the franchisor must provide insight into their figures," says Schmelzle. This includes comparative business analyses (BWAs) from franchise operations of the same size at similar locations. These are real figures from actual businesses, not doctored averages, the expert emphasizes.The franchisor must not present false figures – otherwise he has a liability problem."
However, the comparison has one drawback: "Some systems require a pre-contract fee for disclosure."This is credited upon conclusion of the contract," reports Schmelzle. This is how the systems protect themselves to some extent from prying competitors.
Tip from Jan SchmelzleOn the internet you can find many franchise systems and information on whether a system is suitable for full-time employment or as a side business.
You can conduct research on these websites: franchiseverband.com and franchiseportal.de
As a franchisee, you invest a lot of time and money in this partnership – just like the franchisor. This investment needs to pay off. Therefore, quick exits are not planned..
"Franchise agreements are long-term contractual relationships with a fixed start and end date," explains Schmelzle.A typical term is five years.The decision regarding renewal rests with the business. "This is a unilateral option for the franchisee," the expert emphasizes. Normally, the contracts are renewed every five years.
It is very difficult for a franchisee to get out of the contract before that point.Ordinary termination during the contract period is not possible."Schmelzle emphasizes that extraordinary termination is only possible in cases of serious breach of contract. Grounds for termination would include, for example, the franchisor failing to provide agreed-upon services or the franchisee not paying their fees."
If the franchise is only a second source of income, the additional business simply disappears, says Schmelzle. It becomes more complex when the franchise is the core business of the craft business.The expert compares the exit to a business succession: As the owner, do you want to sell the entire business, including the franchise, to a successor – including the team, equipment, and property? Or do you only want to transfer the franchise and continue running the core business independently?
All scenarios are possible. "Then, as with any succession, the parties sit down together to determine the current value," says Schmelzle. It's a complex process. Therefore, he advises business owners to consult an auditor or tax advisor..
However, there are two differences compared to a typical succession in the trades:
- Less risk in the search for a successor: The search is easier, especially if it involves a successful business within a successful system. Furthermore, the franchisor assists in finding and selecting suitable successors. Finally, the franchisor can also acquire the franchise and then find a successor themselves.
- Fewer surprises in company valuation: Some business owners in the skilled trades only discover the true value of their company when they are looking for a buyer. Franchisees, on the other hand, receive an assessment of their company's value from the franchise system in every annual review, according to Schmelzle. This isn't the same as a concrete valuation before a takeover, but it does provide a starting point.
Here you can download the document "Top 20 in Franchising" as a PDF!
Tip from Paul Meyer"Anyone who wants to successfully run a second business needs consistent controlling with separate analyses," says the strategy consultant. Otherwise, there's a risk of inadvertently subsidizing one business with the other.
Challenges for established craft business owners1. Target group and orientation
Meyer sees the biggest problem when a craft business wants to expand into a new business area with a different target group. For example, a carpentry firm that works in new construction and then tries to enter the home renovation market via franchise. "Companies that only know new construction often don't understand the needs of private homeowners," Meyer warns. His advice: Instead of expanding, tradespeople should target existing customers with additional services. Franchise opportunities exist for this as well. For example, a joinery or carpentry business could benefit from systems like Portas or Treppenmeister, where synergies arise. "This way, I stay focused on my target group and expand the range of services for them," says Meyer. The marketing then has a double impact, since both offerings address the same target group.
2. Brand identity
Every franchise system thrives on a consistent brand image. Corporate design from the website to vehicle lettering to workwear. For business owners, this means: "Anyone who chooses a franchise system must consistently represent this brand," emphasizes Meyer. What happens to their own brand in the process? "That deters many, especially businesses with a long family tradition." Not to mention practical considerations: How does combining or switching between their own brand and the franchise brand work in day-to-day operations when they aren't two separate businesses?
3. Controlling
"Anyone who wants to successfully run a second business needs consistent controlling with separate analyses," says the strategy consultant. Otherwise, there's a risk of inadvertently subsidizing one business with the other. The alternative: two companies that are clearly separated from a business perspective. "This is the best way to determine whether both business areas are operating profitably."
4. Entrepreneurial freedom
Even as a franchisee, you remain an entrepreneur with all the associated opportunities and risks. You make decisions about personnel, investments, cost structure, acquisition, and customer service, for example. But: "As a franchisee, I have to adhere to the concept," says Meyer. "I'm no longer the sole boss." Anyone who can't accept that should think carefully about it.
5. No negotiations
Even if you, as an entrepreneur, know that everything in business is negotiable, there's hardly any room for that in a franchise agreement. These agreements have the character of standard terms and conditions. "Franchise systems are tried and tested concepts with standards that apply to everyone," Meyer emphasizes. Individual negotiations would jeopardize the entire system.
6. No half measures
Franchise systems offer some services for an additional fee. Meyer warns that foregoing these services would be a mistake. "Those who pay the system fee but forgo marketing or don't utilize the business support end up paying more. They primarily incur the system's costs without leveraging its strengths."
How can I recognize a reputable franchisor?1. Use checklists
There's a lot to consider. Free checklists from the German Franchise Association help you keep track of everything during your search. 
 franchiseverband.com/wissen/franchisnehmer-checkliste
2. Check the contract terms
Prospective franchisees should carefully review the contract, ideally with the help of a lawyer specializing in franchising. "Exit clauses and the contract duration are particularly important," says Meyer.
3. Check target group loyalty
"A good system knows its target group and consistently aligns its marketing accordingly," said Meyer.
4. Review performance
Reputable franchisors offer not only a brand concept, but also business support, regular meetings and exchange of experience, Meyer emphasizes.
5. Ask colleagues
Prospective franchisees should contact franchisees directly – not just the references provided by the franchisor. "The locations are public, and it's perfectly legitimate to proactively approach others," says Schmelzle. If a franchisor responds negatively to such a request, caution is advised.
6. What also helps
The providers listed by the German Franchise Association have passed the association's "system check." According to Schmelzle, this includes a contract review and a partner satisfaction survey conducted by an independent institute at the University of Münster. If a system fails the check, it loses its membership or is not even accepted in the first place, Schmelzle explained.
But beware of jumping to conclusions! There are more than 1.000 franchise systems in Germany, 300 of which are members of the German Franchise Association (DFV). Membership is voluntary and requires payment. Not being a member does not automatically mean that a system has failed the "check."
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