If you’ve always dreamed of running your own business and moving somewhere exotic, you can realize both of these goals by taking a proven American franchise concept into another country. Thanks to globalization and an ever-expanding world marketplace, the barriers that made international franchising piques your interest, here’s some food for thought to help you decide if it’s right for you.
Consider Whether You’re Master Franchisee Material
Most franchise companies offer single and multiple locations or area development rights to new domestic franchisees. To expand into foreign markets, it’s more common for franchisors to partner with qualified individuals under a Master Franchise agreement. Master Franchising is similar to an area development that allows you to open a specific number of locations within an exclusive geographic territory. As a Master Franchisee in a foreign country, you’ll also be able to:
- Open at least one franchise location in your territory to generate income and use as a model to aid in franchise sales and training.
- Pay reduced franchise and royalty fees for your location(s).
- Sell single-unit, multi-unit, and area developments within your territory and receive a percentage of the franchise fee and ongoing royalties.
- Act as a product distributor or have a real estate interest in future franchise locations depending on the specific franchise company with which you partner.
- Benefit from multiple potential revenue streams and focus on qualifying, training, and coaching new franchisees instead of on being a hands-on operator in your own store(s).
Partner with the Right Franchise Company
Even though there are fewer barriers to international franchising than in the past, your choice of franchisor can still have a large impact on how easy the process will be. In general, it’s wise to choose an experienced franchise company that can help you navigate the various challenges of operating a business outside the United States. You’ll have a better experience overall by looking for a franchisor that:
- Is already established in a number of foreign countries.
- Understands the complexities and potential difficulties of franchising in a foreign environment.
- Provides strong support to its current international franchise partners.
- Offers technology, research, and sales assistance to its new Master Franchisees.
- Provides help developing financials, sales agreements, and franchise disclosure documents, as well as marketing, procedure, and operation materials.
- Offers input and assistance if you need to tweak the concept to match the local market.
- Is well established with a good track record domestically to ensure that the brand is attractive to potential foreign franchisees.
Choose Your Foreign Country with Care
Deciding on the right international location is just as important as your choice of franchise company. To choose wisely, be sure to:
- Inquire about franchising regulations: Make sure you fully understand the rules and regulations for buying and selling franchises in any location you’re considering.
- Learn about trademarks and copyrights: It’s equally important to know the country’s trademark and copyright laws so you can protect the brand and avoid legal complications once you’re established.
- Explore cultural differences: All countries have cultural and social differences, and it’s vital to learn about and adapt to the local norms in your interactions with potential franchisees and customers.
- Perform ample market research: Verify that the country is economically healthy and has well-functioning logistics systems and infrastructure and that there’s a customer base who wants and needs the service or product your franchise offers.
To learn more about franchising internationally with a proven concept and franchise company, contact us at Fully Promoted today.