Yes, Ikea is a franchise company. As the IKEA business was expanding in the early 1980s, IKEA Founder Ingvar Kamprad was looking for a way to grow the company internationally while maintaining its entrepreneurial spirit and safeguarding the underlying IKEA Concept.
He wanted to find a system that would serve the best interests of the IKEA Concept and the people in IKEA markets. After extensively analyzing the subject, he came to the conclusion that a franchising system was the best alternative. The IKEA franchise is an industry leader in the home goods and decorating industry and provides a large selection of house furnishing products at affordable prices.
Product designers are pushed to be creative, assisting in the creation of distinctive and intriguing pieces. IKEA has 315 stores in 27 countries as well as intends to launch more each year. The franchise process allows the IKEA business to gradually increase while they establish their principle and a strong base for the IKEA brand.
Inter IKEA Systems B.V. evaluates prospective IKEA franchisees. If the franchisee is picked, a contract is entered into granting the business owner the authority to run an IKEA store and/or other revenue streams in full compliance with IKEA franchise strategies and procedures.
IKEA franchisees pay a yearly charge of 3% of their net revenue to Inter IKEA Group. In exchange, they have direct connections to the IKEA trademarks.
Presently, all IKEA stores, with the exception of the IKEA Delft retail outlet in the Netherlands, which itself is controlled by Inter IKEA Systems B.V., are franchised. Inter IKEA Systems B.V. owns the IKEA Concept and is the global IKEA franchisor.
The franchisor is in charge of constantly developing the IKEA Concept and ensuring its execution in both new and existing markets.
The Requirements and Costs of Purchasing an IKEA Franchise
Inter IKEA Systems B.V. tends to favor the following features when choosing franchisees:
- Extensive retail experience
- Comprehensive knowledge and presence in the local market
- Corporate virtues and traditions
- Financial power and the willingness to execute the business.
Since IKEA doesn’t use a classic franchise system, the cost of rights to specific areas will differ. In 2012, for instance, the corporation declared its plan to construct a total of 25 stores throughout India, noting that the development will necessitate a $1.9 billion capital expenditure as well as a 15 to a 20-year timeline.
How to Open an IKEA Store
IKEA isn’t functionally a franchise, however, it operates as one, so the specifics of its franchise agreement aren’t available to the public. To inquire about how to become a franchisee with IKEA, go to https://about.ikea.com/en/contact. Take the time to read it and have your legal professionals read it as well.
Conclusion
Even though IKEA, the Swedish furniture retailer, is theoretically a franchise, investment prospects are not available to the individual owner or small business. Large ownership organizations invest excess cash — up to $100 million for every location — and accept to control all the retail locations in a particular country.
Every year, the franchises collaborate to launch over 2000 product lines, establish new ways of making purchasing at IKEA more efficient, and assist over 800 million people in living more financially viable lives.