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Going International
by Ed Teixeira
In the evolution of most franchise companies the subject of
international expansion is sure to come up. For large franchisors who
have “sold” the majority of their available territories in the US
entering foreign markets is a natural progression. For smaller
franchisors there can be some distinct advantages in taking their
company international. These advantages include, diversification,
financial rewards, prestige for the franchise system and added growth.
However, its important that franchisors who have an interest in
stepping onto the international stage are very careful to do an
initial self assessment. If this process results in a positive outcome
then the next step is to obtain sound advice from an advisor or firm
with experience in this area.
I’ve listed some key factors that need to be considered before a
franchisor decides to enter markets in other countries:
1. Quality First - Have a sound franchise program in place
that is built on a foundation of quality not just quantity. There are
many franchisors who may not have a presence in every major US market
but have a sound program in place with a product or service attractive
in other countries. I experienced this first hand with great success.
2. A Committed Organization - The leadership of the company
must understand the requirements of going into new markets, the
organizational resources required, the opportunity and the pitfalls.
If its a decision to proceed then the senior leadership must issue a
mandate throughout the organization requesting commitment.
3. Available Resources - The days of a franchisor selling a
master license agreement and returning home with a check never to
return again are long gone. If a franchisor wants to go international
there must be a plan in place and the capital and people resources to
execute that plan. In many cases there may be an individual already in
the company who can administer the program under the leadership of
senior management. The company manuals, training materials, marketing
literature and other support systems must be in place. If not make
sure that these tools are current.
4. Invest Some Time In Common Sense Research - If you feel
that you meet the initial requirements in 1-3 then spend some time
understanding about countries you might consider. Where might your
product or service have appeal? Are any of your competitors in
international markets and where? With the internet one can obtain
virtually any information one wants to spend time looking for.
If you go to www.export.gov you
can retrieve country by country information from the US Department of
Commerce. Don’t forget some old fashioned common sense. As an example,
sweets aren’t popular in most Asian countries so if you have a product
that falls into this category focus on Europe and other like markets.
5. Engage the Services of a Consultant or An Attorney - If
you’re ready to seriously consider taking your franchise international
then obtain advice from someone who has “been there” and has
experience in international franchising and licensing. You need to
rely upon experts who have prospected candidates, negotiated
agreements and have operational experience.
6. Register Your Marks - Before you formally start the
process be sure you apply to register your trademarks and any other
intellectual property you possess.
This article was written by Ed Teixeira,
President of FranchiseKnowHow, LLC a franchise consulting firm with
offices in New York and China. Contact
ed@franchiseknowhow.com
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