Germany Country Commercial Guide
Learn about the market conditions, opportunities, regulations, and business conditions in germany, prepared by at U.S. Embassies worldwide by Commerce Department, State Department and other U.S. agencies’ professionals
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Distribution & Sales Channels
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Distribution & Sales Channels

Using an Agent or Distributor

Please refer to our European Union Country Commercial Guide article on using an agent or distributor.

Establishing an Office  

Anyone can open an office in Germany – irrespective of nationality or place of residence. There is no specific investment legislation in Germany, nor is there a minimum percentage of German shareholdings required for foreigners. Investors can choose the most suitable legal form, i.e., a corporation, a partnership or conduct business via a German branch office.

Foreign companies with a head office and registered business operations outside of Germany can establish a German branch office. This business form is suitable for a foreign company wishing to establish a presence in Germany for the purpose of initiating business and maintaining contacts with business partners.  

For more details see information from Germany Trade and Invest: Establishing a Company.  

For the latest Investment Climate Statement (ICS) which includes information on investment and business environments in foreign economies pertinent to establishing and operating an office and to hiring employees, visit the U.S. Department of Department of State’s Investment Climate Statements website.

Franchising

U.S. businesses looking to franchise within the European Union will likely find that the market remains robust and generally favorable to franchise systems. Although there are EU-wide regulations that impact business operations, specific franchising laws vary by country. Only a few EU member states have dedicated franchise legislation, with Germany being one of the more regulated markets. However, these regulations typically do not hinder the competitive position of U.S. companies. Prospective franchisors should assess both EU-level regulations and national laws relevant to franchising. More detailed legislative information can be found through the European Franchise Federation.

German Franchising Market

Germany continues to be a strong market for franchising, with consistent year-over-year growth:

  • Market Size (2023): USD 159.4 billion USD
  • Employment: Approximately 830,000 people
  • Franchise Outlets: 190,000 active units
  • Franchise Systems: 910 operating in 2023

Sector Breakdown (2023):

  • Services: 48%
  • Retail: 19%
  • Food & Beverage: 19%
  • Skilled Trades: 14%

Key to a successful market entry remains finding the right partner with which to develop the market. While multi-brand franchising is still gaining traction in Germany, it is becoming more relevant. Collaborating with experienced franchisees, consultants, or brokers is often essential to ensure smooth entry and build brand awareness.

German investors prefer to engage directly with decision-makers (often the company owner) rather than intermediaries, and they typically look for concepts already proven to work locally. As a result, U.S. franchisors are still encouraged to first establish a corporate pilot with a German partner before initiating broader franchise expansion.

Germany’s decentralized population and business hubs necessitate a regional market approach. Successful franchisors typically divide the country into multiple territories and appoint area developers to manage and grow local franchise networks. Regional tailoring of business strategies is crucial for national success.

Emerging Trends in 2025:

  • Increased adoption of AI and automation tools in franchise operations
  • Growth in multi-unit and multi-brand franchise ownership
  • Rising interest among younger franchisees
  • Demand for wellness, sustainability, and eco-conscious concepts
  • Preference for proven business models with localized adaptations

Franchise Advertising and Marketing Channels in Germany:

Magazines:

  • FRANCHISEConnect
  • franchiseErfolge

Online Platforms:

  • Deutsche Unternehmerbörse (DUB) – platform showcasing business and franchise opportunities
  • FranchisePORTAL – German-language virtual franchise fair

Franchise Trade Events in Germany:

  • Franchise Expo Germany – Frankfurt, November 6–8, 2025 
    Germany’s largest franchise trade show, ideal for U.S. franchisors to network, showcase concepts, and connect with German investors.
  • EXPO REAL – Munich, October 6–8, 2025 
    Europe’s largest real estate and investment fair, often attended by franchise-related investors and retail developers.

Direct Marketing  

Direct marketing is widely adopted by German businesses, primarily through email campaigns, online advertising, telephone outreach, and traditional mail. However, companies must navigate Germany’s strict regulatory environment when implementing these strategies. The country enforces rigorous data protection and privacy regulations (GDPR), alongside comprehensive consumer protection and advertising standards. Legal consultation is essential before collecting, storing, or processing any customer data. Additionally, businesses must comply with laws governing fair competition practices and promotional offers to avoid potential legal complications.

Joint Ventures/Licensing

Dealing with joint ventures is challenging under German competition law. In Germany, joint venture legislation falls under the purview of the Federal Cartel Office (Bundeskartellamt). The law requires that a joint venture must exercise “genuine entrepreneurial” activities. Under German law, this means:

Organizations which merely carry out auxiliary functions such as purchasing or distribution on behalf of the parents are not considered joint ventures; and

JVs must have at their disposal sufficient assets and personnel to carry out their activities.

The Federal Cartel Office is required to prohibit a merger if it is “expected to create or strengthen a dominant position.” Market dominance is defined as an undertaking which either has no competitors or is not exposed to any substantial competition or has a paramount market position in relation to its competitors.

Licensing

German antitrust law does not, in the absence of a dominant market position, restrict the owner’s freedom to use her/his industrial property rights, including the exploitation of a patented innovation.

Express Delivery

Most international express delivery companies are active in Germany. Large players include DHL and Hermes (both headquartered in Germany), FedEx and UPS. These companies ship domestically and internationally, provide a wide range of delivery options and prices and have grown significantly because of e-commerce. An increasing number of companies including Amazon, Flink and Decathlon (sporting goods retailer) offer same-day deliveries in large metropolitan areas.

Due Diligence

Product safety testing and certification is mandatory for the EU market. U.S. manufacturers and sellers of goods must perform due diligence in accordance with mandatory EU legislation prior to exporting.

Companies interested in taking over German firms should always conduct their own due diligence before entering business ventures. One of the U.S. Commercial Service’s programs, the International Company Profile (ICP), has been designed to support due diligence processes. All major consulting companies offer due diligence services, and most large U.S. accounting or consulting firms have subsidiaries in Germany.