Consultant's Advice: Export your business worldwide by Franchising
The next step up from franchising domestically is offering franchise licenses to international investors. Roy Seaman explores this avenue of exporting your business
A significant number of companies are now recognising that the best way to export their products and services is to create a franchise offering. This enables the franchisor to receive revenue for its knowledge in relation to how best to create the sales and marketing environment procedures and policies as well as built brand value.
Some manufacturing companies recognise that by following the franchise route to market is their most profitable business offering from an early stage, such as The Body Shop, Clarks Shoes, Thornton's and Vision Express.
In fact, there are almost 1,000 companies in the UK that have recognised the opportunity for expansion of their business via franchising, and many are suited to offering their concept and brand to international investors.
All sectors of business that have a product or service with growth potential and good profit margins can benefit from this innovative method of international expansion. The main categories relate to automotive, business to business, cleaning and maintenance, delivery, food and drink, health and beauty, homecare, leisure and travel, print and design, property care, real estate, retail and fashion, sales and distribution.
Then there are the niche market opportunities, the latest being ebay-related shops, where the customer takes in unwanted products and has them sold on the internet in return for a commission. This is going to be a huge market and is a natural for expansion by franchising.
Even if you do not franchise your business in the UK, you can still consider using the model of franchising for exporting your products and services. Good examples of brands that expand via company-owned stores in the UK but via franchise agreements with local partners abroad are Mothercare, which has an international network of more than 100 franchisees worldwide, and Marks & Spencer, which has recently seen the benefits of expansion by franchising.
So what is the huge attraction of franchising internationally? The main benefit is that your international partners become far more committed than the old fashioned method of appointing agents, distributors or representatives. Franchise owners are the ideal solution to successfully exporting your products and services because of their commitment to developing the knowledge needed to run your business as successfully as possible in their countries. These indigenous entrepreneurs often have the financial resources as well as desire to import and distribute your product, but when offered a franchise they become more of a genuine partner. They can then build up your business in their country to its full potential and have a more valuable business than they could under any other format.
There is a growing demand from successful international entrepreneurs and trading companies to invest in Master Franchise rights, rather than follow old methods of importing products and services into their markets. By creating a franchise offering you will obtain the very best input relevant to the target market.
You will also experience a change of attitude. Rather than facing barriers to entry into a country you will receive encouragement to import your concept, because you are offering to import knowledge, branding and systems to assist a wellqualified group of domestic business entrepreneurs who have the desire to own, operate and develop your business to its full potential.
In order to give some serious thought to franchising you are best advised to call a franchise consultant experienced in assisting companies to expand internationally via franchising, who will be able to help you identify the best way to franchise your business.
Roy Seaman is Managing Director of Franchise Development Services, a franchise consultancy (and publisher of The Franchise Magazine) which has been assisting in the development of franchises around the world for 25 years.