Chapter 20: International Franchise Opportunities

Introducing a franchise outside of the United States may be a viable way for your brand to grow. However, a successful franchise in the U.S. does not always directly translate overseas. Here are initial steps to carefully and productively plan for an international expansion. 

Call in the Professionals

If you think you’re ready to go global, get another opinion. A trusted advisor can provide insight on the potential of the business in international markets. Even if a business is structurally sound, there may or may not be a strong demand for it in unfamiliar markets. 

For example, in the late ‘90s, Dunkin’ made the move to expand in Beijing. However, its lack of local marketing education left potential guests confused about eating what they viewed as a sugary dessert for breakfast. All Beijing outlets ultimately failed within about five years.

Once you understand the new location’s local needs, secure trademarks or copyrights in that location. Starting this process as soon as possible will establish protections prior to marketing.

Understand the Complexities of Your Intended International Markets

Just like in the U.S., there are rules surrounding how a franchisor can and cannot promote and sell a franchise, as well as documentation that must legally be provided. Research the rules of any specific countries you intend to target and ensure you are comfortable following these guidelines. 

Markets that are not as established in the franchise space may impose investment restrictions to protect local economic interests. For example, some regulations may focus on “pre-contractual hygiene,” placing an emphasis on the necessary disclosures prior to a contract being signed while other countries do not regulate franchise agreements at all.

Begin To Develop Resources and Other Ongoing Strategy Plans

With franchisees on the other side of the globe, it is important that monitoring, reporting and information dissemination processes are well-tuned. Developing a franchise intranet that provides all necessary information and communications for franchisees ensures owners have access to the information. 

Around-the-clock training and support documents also help, decreasing the downside of a time difference between franchisors and franchisees. Even though owners are hours away, it is crucial to the reputation and success of the brand that typical brand standards are followed, and there is an accountability system in place.

International franchise growth is a big leap, but it can certainly pay off when done correctly. Study franchises that have booming businesses overseas, and talk to international expansion experts to get valuable insight and first-hand lessons. By addressing these concerns above, you will have a better understanding of demand, culture, operations and reporting.