DENMARK Trends and Developments Contributed by: Dan Bjerg Geary, Rasmus Otterstrøm Helleland Boisen and Laura Sloth Olesen, Bech-Bruun
upon which the business is established. A franchisee launches their business on a proven basis, without the need to invent and test various concept possibilities. Instead, they start their venture following tried-and- tested guidelines, offering products and services that have already demonstrated their appeal to consum - ers. The franchise concept has been successfully implemented elsewhere, providing the franchisee with a substantial advantage over those who rely solely on a good idea. In recent years, franchise concepts have shown remarkable resilience and adaptability, outperforming other retail stores and sole proprietorships in Den - mark. The inherent advantages of franchising – such as shared marketing strategies, bulk purchasing pow - er and streamlined operations – have enabled fran - chise businesses to navigate economic fluctuations more effectively. This has resulted in a more stable performance and growth trajectory, even amidst chal - lenging market conditions. Despite the advantages, franchises have not been immune to the pressures of supply chain and logistics challenges during recent years. However, franchise chains in Denmark have shown remarkable strength in absorbing these pressures and planning more effec - tively. The collaborative nature of franchising allows for better resource allocation and strategic planning, enabling franchisees to mitigate disruptions and main - tain service quality. Financial Challenges The current economic climate in Denmark and the rest of the world, characterised by geopolitical turmoil and financial uncertainty, poses significant challenges for businesses, including franchises. However, franchis - ing offers a distinct advantage in this environment due to the established financing structures that many fran - chise chains possess. These structures often include partnerships with banks, leasing companies and other financial institutions, providing franchisees with access to favourable financing options. This financial support can ease the burden of initial set-up costs and ongoing operational expenses, making franchis - ing a more viable option compared to independent business ventures.
In Denmark, a floating charge is particularly benefi - cial for financing operational assets and inventory, as a floating charge allows businesses to secure loans against their movable assets. For franchisees, the ability to leverage a floating charge can enhance their financial stability and support the expansion of their franchise business. Fast and Smooth Establishment of New Companies Establishing a new company in Denmark for setting up a franchise business is a straightforward process. Denmark offers a streamlined registration system through the Danish Business Authority, where entre - preneurs can easily submit necessary documentation online, including the new company’s articles of asso - ciation and details about management and ownership. A new company can be established within a day. Broadly speaking, Denmark is one of the world’s most digitalised countries. Electronic signatures hold the same legal validity as handwritten signatures; there are no requirements for authentication, notarisation or witnessing in relation to the establishment of a new company or decisions made at general meetings or by the board, and most documentation can be submitted to the Danish authorities online. The choice of legal structure – such as a private lim - ited company (ApS) or a public limited company (A/S) – is flexible and can be tailored to suit business needs and capital requirements. The capital requirements for an ApS were reduced from DKK40,000 to DKK20,000 in February 2025, making it even easier for entrepre - neurs to establish a company in Denmark. If an A/S is preferred, the capital requirement is DKK400,000. Minimal Regulation of Franchising Denmark does not have specific franchise legislation. Instead, franchising and franchise agreements are governed by general Danish contract law principles. This legal framework provides the parties with sig - nificant freedom to negotiate terms tailored to their specific needs and business objectives. However, it is crucial for both franchisors and franchisees to be aware of the implications of Danish contract law, as it influences the enforceability and interpretation of franchise agreements.
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