Consider going international: The International Franchise Expo

When the 15th annual International Franchise Expo begins its three-day run on 2nd June, most of the attention will be focused on the hundreds of franchise concepts on display in the Washington DC Convention Center. For the Master Franchisee, investor or franchise company searching for the perfect global opportunity however, the most important time may well be spent away from the glitter and glamour of the exhibition hall.

'Anyone who bypasses the symposia is missing an outstanding opportunity to better understand how to evaluate and make decisions on the many opportunities that are available to them,' says Peter Holt, Executive in Residence for Boston-based private equity firm Great Hill Partners, LLC.

Holt has negotiated numerous international agreements for some of the most well-known franchise concepts. 'You have access to some of the best legal, financial and development expertise in franchising,' he adds. 'These sessions provide direct access to the best and the brightest in the franchising community where you can ask questions about your country or a concept. There's no other way to get as much information without paying for their services.'

Dennis Fuller, Executive Vice President of Franchise Resales, LLC, who has sold Master Franchises in the US and worldwide, says the symposia are important because many attendees - whether looking for a franchise or Master Franchise - don't really have a clear understanding of the franchise business model or how to properly evaluate an opportunity.

'Many have never purchased a business or a franchise before,' says Fuller. 'A lot of people are blinded by the excitement and the fact that they are going to be a Master Franchisee or the thought that they are going to be partnered with an American business concept. They often don't take the time to properly assess each opportunity. The sessions give them the background to properly evaluate a franchise and gain a full understanding of what the business actually is all about.

'The bottom line is that attendees to the symposia are better informed not only of how to evaluate each franchise opportunity, but also whether the franchisor is really ready to take the business into their market.'

Not all the symposia are focused on expanding overseas, however. Andrew Sherman, a capital partner with the law firm Dickstein, Shapiro, Morin & Oshinsky, will conduct a series of sessions designed for international franchise companies planning to expand into the US.

'International companies are now much more comfortable with the idea of the UFOC and are more focused on things that are important from a strategic standpoint,' he says. 'So we focus on subjects like the demographics of the franchise market in the US, what's important, how to gain access to potential franchisees and the objections a potential franchisee might have to buying a franchise from a foreign company.'

Sherman says, however, that many companies still arrive with misconceptions about doing business in the US. 'Companies often don't really realise the scope of the US market,' he says. 'Often they will think they understand the US market because they have been to LA three times. Or they have been to New York to do their research and think all the US markets are about skyscrapers. Often, attendees really don't understand the size and scope of the market. We are able to educate them on how to do their homework and identify the markets that might be best for each company.'

The bottom line, however, is that the IFE symposia and individual sessions help create a more sophisticated and educated investor. 'Attendees are better able to determine whether a franchise model they are considering will work in their marketplace and their environment or whether the product or service is even something that is needed,' says Fuller.

In fact, Holt says one indirect benefit of the sessions is that international delegates who have attended the sessions are sometimes able to identify emerging American concepts with international potential.

'The IFE really forces the small and medium size franchisor to consider the opportunity to go international,' says Holt. 'The major franchisors are already at the IFE with that in mind (international expansion). But if you are a small or mid-size franchisor who is really just trying to expand domestically and suddenly you have qualified delegates asking you if you have ever considered taking your concept to Brazil or Europe, it makes you go 'wow, I never really thought about that.''