This year’s International Franchise Association’s convention highlighted a growing trend of private equity companies looking to invest in established franchise operations, revealed Professor Roy Seaman Managing Director of Franchise Development Services.
Professor Seaman (pictured right) said: “Franchising is well positioned to regain its momentum for growth and at the convention there were lots of new ideas from experienced franchise practitioners. A considerable number of US brands are now committing more financial resources to international franchise development and there is a preference to award franchises in the future to organisations rather than individuals.
“Franchise Development Services received over 50 enquiries from franchisors looking to expand their business internationally. Many now prefer to take their time and commission a pre-entry study rather than adopt the previous method of promoting the availability of their Master and then open the negotiations.
“There is in fact a step by step procedure that American companies prefer to adopt and the whole process can take up to 12 months, but the end result is that the Master Franchise rights is awarded to the most suitable organisation rather than a quick sale to the wrong candidates.”
Published: 3 March 2011
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