The Finnish franchising market may not be the largest in Europe, but this Scandinavian country’s entrepreneurs are still more than familiar with the benefits of the business model.
Founded in 1998, the Finnish Franchising Association (FFA) has been supporting Finland’s franchisors – both homegrown and international – for over two decades. Today, members of the FFA cover almost 70 per cent of the Finnish market, which boasts a turnover of around 6bn. The Association also hosts the annual Franny Awards gala, which draws over 400 participants to celebrate the best of what Finnish franchising has to offer.
Global Franchise was thrilled to be able to announce that the FFA joined its growing World Franchise Network at the end of 2021, and to mark this special partnership, we wanted to catch up with Juha Vastamäki, executive director of the FFA. Juha is no stranger to the hands-on side of franchising, having previously been a franchise manager for a prominent Finnish retail chain, so he’s the perfect mouthpiece for this unsuspecting European gem.
KM: In your 12 years with the Finnish Franchising Assocation, how would you say franchising within the country has evolved?
JV: It’s been a steady growth, from 4.5bn to 6bn turnover in franchising. The market share between different businesses has changed; the café, restaurant, and fast-food sector has doubled, for example, while retail business has decreased – mainly due to internet sales.
Out of the 250 to 300 franchise brands operating in Finland, almost 80 per cent are Finnish. This used to be around 75 per cent, but it has changed in recent years. This is interesting, of course, because when you talk about franchising many people assume it’s all to do with foreign brands. People are amazed when they find out how many franchises in the country are Finnish.
This is because there’s a good understanding of franchising within Finland now, and we have our own unique franchise concepts and businesses.
KM: Do you think that self-regulation among Finnish franchisors will work long-term, or is a franchise law inevitable?
JV: Finnish self-regulation in franchising has worked well for over 30 years, and there aren’t any signs of franchise law coming. We have a good, reliable juridicial system in Finland and there is already quite a comprehensive number of regulations regarding business. There isn’t a need for extra regulation. That being said, I don’t think it would necessarily be a bad thing is legislation were introduced to govern franchising, but the FFA has strong processes that work within the country. Incoming brands have never had a problem or challenge with the lack of legislation.
KM: What do you find fulfilling in your role as executive director of the FFA?
JV: When the FFA opened, I was between jobs and running business training for a company, but it wasn’t the kind of role I wanted.
I attended a franchise exhibition and met the team working at the FFA. I knew them already and knew board members, and after we spoke it all just came together.
It was quite a logical step in my career, after working in retail franchise management. It’s easier for me to be empathetic with other franchise managers because I have that experience, personally.
The best part about my role is the people in franchising that I have had the privilege to work with; so many great people both in Finland, and around the world. People in this industry are special: they are positive thinking, open minded, dynamic, and understand the importance of networking.
Also, to have the possibility to work with different franchise brands and businesses is interesting and satisfying. It’s also rewarding to help people.
KM: Finnish brands are in over 40 countries worldwide. Why do international investors want to bring these concepts to their home countries?
JV: They may find the Finnish concept unique or even exotic – it’s also one way to differentiate within a crowd. Finnish people as well as Finnish companies are very reliable, and have a high ethical working standard, which makes cooperation easier.
Finnish concepts are also acid tested; if the concept has succeeded in Finland, why not anywhere else? Finland isn’t the easiest country to enter. There’s a lot of distance between locations and we don’t have a huge population. From the outside, the market’s potential can seem limited.
KM: What excites you about this recent partnership between the World Franchise Network and the FFA?
JV: I see this as a great possibility to help Finnish companies go international and present Finnish market for potential foreign concepts. The FFA has been an active participant in the international franchising family, and it’s a logical step for us to join the World Franchise Network.