How To Know When It's Time To Go International
Every successful franchisor reaches a certain point where they must decide what the next step will be in expanding their business. Growing the franchise locally, then nationally, is the logical progression for domestic growth. But to fully capitalize on potential growth options, and to avoid over-saturating domestic markets, franchisors may want to think about international expansion.
The growth of a brand at an international level can pay huge long-term dividends to the franchisees, the franchisor, and shareholders alike. Global brand recognition, increased brand footprint, and global accounts programs all benefit the business. Revenue streams from new franchise sales will combine with ongoing royalties for the franchisor, and all of these factors build a larger family of satisfied franchisees. Even the customers and the supplier network will reap benefits. Expanded supplier deals mean increased revenue on their end, and a global franchise affords the business the ability to share best practices from locations all over the world. That means a reliably uniform customer experience, anywhere in the world.
In our 28 years of experience, we have found that having a reproducible business model that is easy for individuals and organizations to implement makes the franchise format quite easy to launch. We pride ourselves on being able to work with our master partners in identifying the proper potential marketplace. The key to identifying international marketplaces lies in being able to regionalize the brand systems and adjust as necessary to adapt to a given country, culture, currency, and business climate. We are able to do that without compromising the brand promise, the reliable customer experience people have come to rely on, all while ensuring consistency across the board, nation to nation.
Perhaps the biggest question franchisors face is deciding when to expand. Any international growth has to begin with having a proven business model, well-established domestically, and a proven track record of success. Some of our own international development started with a grassroots-level of interest where domestically established franchisees expressed a desire to tap into international markets.
Our strategic planning for new market development factors in the current economic climate, the political climate, general acceptance of franchising in the marketplace, level of use and recognition of our products and services, availability of our supplier network, and appropriate demographics in that market. An important part of our process when we expand into other countries is a reconnaissance mission by our global team members. We send people to work with our potential partners in identifying the above points, and their presence allows us to have trusted individuals on the ground getting a firsthand feel for the business landscape.
Any franchisor looking to expand into the international market needs to also think about developing their brand in their chosen market. This begins with the local franchisee building an active advertising and marketing program. This starts with face-to-face marketing and is often supplemented by Internet marketing, email and mail campaigns, community involvement, and local advertising. Meanwhile, the franchise brand itself should also be working on a national advertising campaign to promote the business and drive traffic to the individual franchisee location. Any international expansion requires tremendous amounts of teamwork, a synergistic approach to business, and daily effort on the part of both the franchisor and the individual franchisees.
So, what's the next step? Start by determining whether or not you'll work with master partners or will be adding your own resources, facilities, and staff in the countries you wish to expand into. Next, investigate and understand the franchising requirements in the countries you've targeted. Obviously, many countries have their own disclosure laws, associations for franchise activity, as well as financing and legal requirements. It's a good idea to speak with other resources who could help with the international expansion, such as the U.S. Department of Commerce. They usually have resources available through the various posts in other countries, and may even be able to provide assistance in lining up potential investment partners. With hard work, determination, and cooperation, a successful franchise can achieve both local and national recognition.
Jim "JT" Tatem is president of Signarama, a United Franchise Group (UFG) brand. UFG has more than 1,400 franchise locations in 65 countries producing $500 million in system-wide sales. Its brands include Signarama, EmbroidMe, IZON Global Media, Transworld Business Advisors, Plan Ahead Events, and SuperGreen Solutions. Contact him at email@example.com or 561-640-5570.
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