Becoming a franchisee in the retail sector is an opportunity for those who want to launch their own business with structured support.
Every year, many professionals take the plunge, attracted by the independence and advantages of this model.
Despite the current economic challenges, this sector offers many opportunities.
What will the retail market look like in 2024, and what can you expect if you become a franchisee?
Discover the keys to success in this dynamic field.
Profitability of a Retail Franchise: Investments and Costs to Consider
Opening a supermarket franchise requires a substantial initial investment to ensure profitability. Entry fees, which vary according to the franchisor’s reputation, represent an initial expense, often financed by a personal contribution or a bank loan. In addition to these fees, a number of other expenses must be taken into account: fitting out the outlet, purchasing initial stock, advertising costs, equipment and working capital, not forgetting the royalties payable to the franchisor.
To optimize profitability, it is advisable to provide at least 30% of the initial investment in equity.
The remainder can be financed by a bank loan, supplemented by financial aid from the franchisor’s head office, or by a crowdfunding campaign.
A solid business plan is essential to convince investors and banks.
On average, the entry fee for a supermarket franchise is around 50,000 euros, the recommended personal contribution is 100,000 euros, the total investment is around 300,000 euros, and average first-year sales are 1.5 million euros, underlining the profit potential of this sector.
How do franchised supermarkets work?
Retail franchising is a structured sector, distinguished by the size and organization of its stores, and by the large number of employees.
In France, hypermarket and supermarket franchises represent the main channels, generating sales of 132.2 billion euros between October 2022 and October 2023.
Despite the rise of e-commerce, this channel will remain dominant in 2024.
Major players such as Leclerc, Carrefour and Les Mousquetaires alone hold 60% of the market, testifying to the fierce competition in this sector.
Opening a franchise in mass retail offers an opportunity in a flourishing market, expected to generate sales of 460 billion euros by 2023.
However, this attractiveness comes with challenges, not least increased competition from the likes of Auchan, Lidl and Aldi.
Franchise networks such as Carrefour, with around 250 new franchisees a year, continue to expand, aiming to open 90% of their new stores as franchises. Becoming a franchisee, whether in the food or non-food sector, represents a chance to integrate into one of Europe’s largest distribution markets.
What’s more, by joining a franchise, you benefit from a proven structure and ongoing support, which helps to reduce the financial risks associated with setting up an independent business.
Examples of brands where to invest in food franchising
For those planning to open a franchise in the retail sector, and more particularly in the food sector, several brands stand out for their solidity and development potential.
Groupe Casino: with almost 12,100 stores worldwide, Groupe Casino offers a variety of franchise concepts.
Among them, Casino Supermarchés and Hypermarchés, with 430 and 129 outlets respectively, offer surface areas ranging from 800 to 3,000 m².
The group also offers formats adapted to urban environments, such as Casino Shop and Vival By Casino in rural areas.
The minimum personal contribution and overall investment vary according to the format chosen.
Monoprix: owned by Groupe Casino since 2013, Monoprix is a major player in city-center superstores, with around 700 outlets. The chain is expanding through franchising, with stores of around 300 square meters, attracting an urban clientele thanks to its varied, high-quality offering.
Le Grand Panier Bio: created in 1997 and developed as a franchisee since 2009, Le Grand Panier Bio is a dynamic player in the organic sector, with 16 outlets.
The chain offers over 13,000 products, covering all food and non-food categories.
To join this network, a minimum personal contribution of 50,000 euros is required, with an entry fee of 15,000 euros and an overall investment ranging from 110,000 to 500,000 euros.
Naturalia: Owned by Groupe Casino, Naturalia is one of France’s leading specialist organic retailers.
Founded in 1973, this urban brand has expanded its network to more than 200 stores by 2021, each with an average surface area of 300 square meters, spread across France and internationally.
Supeco: This brand stands out for its low prices, offering between 10% and 20% less than other franchises in the sector.
Despite their affordability, Supeco’s products stand out for their quality, from fruit and vegetables to butchery.
Netto: This hard discount food chain offers thousands of everyday products at very low prices, often the lowest on the market.
In addition to basic products, the chain offers a wide range of fresh produce, including fruit and vegetables, meat and seafood.
Spar: This mini-supermarket chain builds customer loyalty by adapting to consumer habits.
The services offered by this chain are specially designed to meet consumer needs.
What’s more, Spar franchisees benefit from the Casino Proximités group’s central purchasing network.
Potager City: Also launched by Casino Proximités, this chain specializes in the sale of fruit and vegetables, guaranteeing its customers fresh, quality produce from local producers and suppliers.
Carrefour Proximité: With over 4,000 outlets, the Carrefour Proximité franchise is the leader in the food sector, and operates under eight banners: Carrefour Montagne, Carrefour City, Carrefour Bon App, Carrefour Bio, Carrefour Express, Carrefour Contact, Proxi and 8 à Huit. The overall investment for franchisees joining this network varies according to the brand chosen.
New trends in the supermarket market in 2024
In 2024, the retail market is undergoing significant change, exacerbated by the pandemic and the war in Ukraine.
Rising prices and food inflation have forced many retailers to adapt their strategies, with a strong demand for convenience stores.
Despite major challenges, such as the reduction in Groupe Casino’s market share to 3%, some brands such as Monoprix and Franprix are performing well.
The sale of numerous supermarkets by Casino to players such as Auchan and Intermarché also illustrates this upheaval.
In the future, the sector will have to adjust to new consumer expectations, while capitalizing on urban formats to remain competitive.
In conclusion, franchising in the retail sector is the best solution for those wishing to undertake business in a structured and secure environment.
By opting for a franchise, you gain access to logistical and marketing support, while benefiting from the reputation of a recognized brand.
