A Global Strategic to International Franchising

International franchising is a strategic way to reduce dependence on domestic demand and grow new, future revenue and profit centers worldwide. Extending a brand globally through franchising involves low risk, requires minimal investment, and offers a huge upside potential for scaling capabilities. Take a look at what international franchising actually is, what its benefits are, examples of companies that have successfully franchised internationally, how to get started in franchising, and where to look for additional help. What Is International Franchising? Franchising is a pooling of resources and capabilities to accomplish a strategic marketing, distribution and sales goal for a company. It typically involves a franchisor who grants to an individual or company (the franchisee), the right to run a business selling a product or service under the franchisor's successful business model and identified by the franchisor's trademark or brand. The franchisor charges an initial upfront fee to the franchisee, payable upon the signing of the franchise agreement. Other fees such as marketing, advertising, or royalties may be applicable and largely based on how the contract is negotiated and set up. Advertising, training and other support services are made available by the franchisor. Benefits of International Franchising In addition to entering new overseas markets with additional customers, international franchising can also offer what is called foreign master franchise owners. These individuals are typically a native of the country and understand the political and bureaucratic problems in his/her country far better than any outsider. Foreign master franchise owners pay a hefty upfront fee to acquire a designated geographic area or, in some instances, an entire country where they operate as a mini or sub-franchise company, selling franchises, collecting royalties, training the owners, and overseeing all other related matters. They can even open units by themselves. In general, a specified number of franchises must be outlined for the exclusive right to use the business model in an entire country. Getting Started The best place to look for getting started is the International Franchise Association. It can help you with the first steps to take and what opportunities are available in the global marketplace. As in any new international expansion, there will be challenges: cultural differences, legal considerations, contract negotiations, and intellectual property issues, to name just a few. Of course, the process is not without its complexities.

We at StradEra can always find you the right market to your global expansions.