1. The Cedar Team

2. 1. Definitions and Examples 2. Establishing a franchise 3. Pros and Cons of a franchise 4. Illustration through an example : Sixt

3.  Collaboration method between  a franchiser : holder of the label rights  a franchisee : who receive from the franchiser its know- how, the signs of belonging to the network, the collection of products/services/technology 1. Definition and Examples234  3 types of Franchises  Distribution : selling products in a store bearing the label  Services : the franchisee offers a service  Production : the franchisee makes himself the products.

4.  Born in the Middle Ages  Franchise : « privilege » and « freedom »  In the 1930’s : pioneers in the US and in France  1950-1970 : huge increase of the number of franchise 1. Definition and Examples234

5. 234 EnseigneApport personnel minimum (€ ou %de l’invest) Niveau d’invest. Droit d’entrée Redevance / Royalties (% du C.A.H.T.) Redevance pub (% du C.A.H.T.) Beauty Success 150 k€> 300 k€9 k€1% Chattawak45 k€45 k€ à 75 k€9 K€/ 2 % (pub nationale) Carnet de vol30 %75 k€ à 150 k€10 K€ H.T.38 à 40 %1 % Genevieve Lethu 120 k€ ou 35 %150 k€ à 300 k€12 à 16 k€5 %1,5 % Feu Vert 150 k€> 300 k€25 K€6,3 à 4,9 %1,29 à 1,06 % Cash Parquet10 k€45 k€ à 75 k€20 k€3 % Cavavin35 %45 k€ à 75 k€9,8 K€1 %0,5 %

6.  3/2 rule : opening 3 stores in 2 years  Development of the business pillars :  the concept : services to distribute  the enterprise :  the brand  the strategy 1Establishing a franchise34

7. "Toute personne qui met à disposition d’une autre personne un nom commercial, une marque ou une enseigne, en exigeant d’elle un engagement d’exclusivité ou de quasi-exclusivité pour l’exercice de son activité, est tenue préalablement à la signature de tout contrat conclu dans l’intérêt commun des deux parties de fournir à l’autre partie un document donnant des informations sincères, qui lui permette de s’engager en connaissance de cause" Jurisdictional frame (loi Doubin, article L 330-3 du Code du commerce) General information Experience and seniority expérience Strategic information State of development Perpectives Density of the network Financial information Results expected costs Expected incomes Contractual information Duration of the contract Conditions of renewal or suspension Conditions of exclusivity 1Establishing a franchise34

8.  Franchiser  Successful launch over a reasonable period of the concept in the pilot store  Owning the brand name and image  Initial training and continuous assistance for the franchisees  Franchisee  Develop the local business of the franchise  Communicate the state of the business to the franchiser  Authorize the franchiser to inspect the store  Retain the know-how of the franchiser 1Establishing a franchise34

9. 1 2Advantages & Drawbacks4 For the franchisorFor the franchisee Advantages Expansion Legal considerations Profit from the franchisee’s enthusiasm Be your own boss Have a quick start Profit from reputation Gain training and assistance Commercial advantages Relations with suppliers Drawbacks Not so many viable candidates Control of the franchisee Costs (royalties, buying the franchise) Follow the franchisor’s standards Risk of bankruptcy

10. 1 23 A focus on Sixt  Interview with Jean-Marc Normand, former director of franchising A few figures : 1 st car renter in Germany, 4 th in Europe 3 years contract – renewable every 2 years Personal contribution : 100.000 € min Entrance fee : 7.500 € min Royalties : 6% CA

11. 1 23 A focus on Sixt  Car rental : very specific market (different from catering companies)  Franchising : in low / medium potentials zones Otherwise (ex : Roissy, Orly ) : branch offices (60 % of the stores but 40% of CA)  Agreements with car constructors and companies  Franchisees often forget to do marketing locally  Main difficulty : to maintain high-standards everywhere

12.  Advantages but Inconvenients too  Your choice !  If you’re interested :  Franchise show : 14-17 March 2010 in Paris 1 234

13. Any questions ?