How to remain in control of your international franchise expansion
As the Chairman, CEO, or Managing Director of a franchise company you must remain in control of your franchise network. You are the pilot of your franchise passenger plane and, as such, you will need to have a very clear flight plan as to where you are going and how you are going to get there. In the same way that you do not take off before you know where you are going, as a franchisor you need to have a thorough understanding of the marketplace you are targeting for your overseas expansion and the type of franchise partner that you will be seeking. To ensure that this is done correctly it is strongly advisable that you speak to a franchise consultancy company like Franchise Development Services (FDS) to produce for you a detailed pre-entry study.
As well as speaking to professional franchise consultants, there are other organisations that can help you with planning your franchise strategy. The UK Trade & Investment, along with commercial departments of British Embassies in your targeted territories, will be in a strong negotiating position to clearly state your expectations as to what can be realistically achieved.
Understanding your market
You should not only engage the services of a franchise consultancy company but should also visit the country that you are targeting for expansion so that you can experience the culture and likely demand for your product or service. While you should always invite the prospective Master Franchise Owner to come and visit your company, it is also recommended that you should try to visit your prospective partners at their own offices and spend time personally evaluating the market before making the decision to award your Master Franchise rights.
By expanding your franchise internationally through franchising you will save considerable time and money because it will be your Master Franchise Owner who will be investing their time and money into the strategy. Their market research will also help you to better understand the challenges that they may be experiencing. Some Master Franchise Owners may well decide that having piloted your business in their country they may decide not to sub franchise. This frequently happens due to the strengths of certain Master Franchise partners. Mothercare is a classic example, with its Master Franchise Owner the Alshaya Group in the Middle East and all of their 200 stores are in fact company owned by the Master Franchise Owner.
While you may have Master Franchise Owners representing your brand in other countries, you should still explore ways in which you can receive feedback from the end recipients. As your customers in the UK like to be asked their opinion of what you are offering your should extend this into international markets so that you understand that there is always a difference between one market and another. The fact that you are making the effort to find out about international customers will always be appreciated.
Exporting your franchise requires the very best expert advice and guidance at all times. It is encouraged that you to take full advantage of the UKTI advisors so that they can provide you with a great deal of basic and important information at a very realistic price. The commercial offices can then assist the Master Franchise Owner with a certain amount of further advice and guidance once they are established. However you need to recognise that they are there to assist rather than to provide continual support services. This is your responsibility and not that of any third party.
By taking full advantage of the UKTI services you can often save considerable money since there is no way that you would be able to engage the services of any company or any other organisation and receive so much information for the amount being charged. When this information comes back, you and your international franchise consultants are in a much stronger position to understand and recommend the strategy for successful entry and development of your business in the targeted market.
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Written by Professor Roy Seaman (pictured), CFE, Managing Director and co-founder of Franchise Development Services Ltd