Franchisors Going International Need to be Prepared
by Ed Teixeira
Franchisors considering opportunities in foreign markets need to have a
successful franchise program and the resources, operational systems, staffing
and strategy in place before executing their decision. However, there are other
steps, that are often overlooked, that need to be taken before going
More and more franchisors are recognizing the opportunities that
international markets can provide to the growth of their franchise system. Asia,
Central and South America and the Middle East receive increased attention. More
specifically, Brazil and India are considered countries with unlimited
opportunities for the right franchise concepts. For countries interested in
international expansion there are qualifications that need to be considered.
I presented some of them in a recent article entitled Going International.
In addition, there are other steps that need to be considered.
- Make sure that someone in the franchisorís organization is
assigned the responsibility to receive and review leads for
international prospects. On a number of occasions Iíve contacted
franchisors to discuss an international candidate when the
person receiving my call had no idea who to refer me to.
- Be sure the franchisor staff is familiar with the new
international program including which countries or regions are
targeted. This makes the initial process more productive for
- Be careful regarding exclusive broker or consulting
arrangements except in unique situations. Itís virtually
impossible for a single broker group to have access to all of
the qualified candidates from a particular country. Since,
brokers that identify prospects from other countries will
normally charge a success fee itís a good idea to engage more
than one broker group.
- Establish a plan for licensing in specific countries but be
flexible. As an example, granting a license for all of China or
India usually doesnít make sense given their enormous
populations. However, there could be a situation where a
licensee might have the financial, logistical and organizational
resources to execute an aggressive and successful development
strategy. If this situation arises, consider a different
approach rather than risk losing a highly qualified prospect.
- Be willing to adapt the franchise presentation in order to
meet the characteristics of a particular country. For example in
the food sector, changes may include adaptations to a building
design and dťcor or adding or deleting menu items.
These items can be the topping on an effective international expansion strategy.
Conversely, failing to address or consider them prior to launching an
international program could result in lost opportunities.
© 2012 FranchiseKnowHow, LLC
Ed Teixeira is the President of FranchiseKnowHow, LLC. He
can be reached at firstname.lastname@example.org