Get Started in Franchising

No matter what the economic environment, franchisors still must sell franchises if they are to grow and thrive. To do that, the majority of franchisees must be able to borrow. But with credit and lending frozen, nobody can borrow. So what's a franchisor to do?

Franchise Update Media Group, the leading industry resource for franchise development, is a sponsor of the second annual Women's Franchise Network Reception, which will be held Thursday, Nov. 6, 2008 from 6:30 - 8:30 p.m. at the offices of Davis Wright, Tremaine in Los Angeles. The topic for this year's event is "Show Me the Money" and focuses on financing options for franchisors in today's uncertain market.

Bernie Howard is betting his 401(k) that his new franchise business will set him up better over the long-term than his 23-year career in the automotive industry.

All development people dream about that perfect prospect. Someone who is interested in their concept, pre-qualified and brought to them by a highly respected third party, an introduction that carries with it a direct or implied endorsement.

Say you're purchasing some delicious tropical fruits from a street vendor, only to discover that you have no small bills. You probably will receive a smile and a "mai pen rai" along with your snack and a sizable wad of 20 baht notes. An employee arrives at an important meeting 45 minutes late. If the other attendees notice the straggler's tardiness at all, they are likely to dismiss it with "mai pen rai" and continue their discussion.

In our last article we explained how to perform a country ranking analysis. In a recently completed engagement, management indicated that a number of revolutionary learnings occurred as a result of our analysis and that those learnings have radically impacted the company's expansion plans.

In taking various licensed concepts to some 70 countries, we have seen numerous approaches to how licensors evaluate new countries. These approaches can be classified into three basic categories: the reactive approach, the shotgun approach and the predictive approach. In general, these three approaches can be described as follows...

In franchising, no one has to be reminded of the importance of making deals and signing fabulous new franchisees. But unless you actually open new units, inking the deal is only part of the story. This important distinction--between units sold and units opened--led us to examine six franchises that grew by more than 100 units between 2005 and 2006 and ask them how they did it.

What a great time to be in the franchise development business! We have the advantage of an election year, talk of recession, high interest rates, poor housing starts, and rising unemployment rates.

When doing business in Mexico, it is essential to establish relationships with associates who are well connected. This requires checking their backgrounds and reputations to determine the depth and breadth of their personal and professional networks. Joining local social clubs and business organizations, participating in the American Chamber of Commerce in Mexico, and visiting the nearest US consulate and the Commercial Attaché at the US Embassy are useful ways to obtain such information. Cultivating personal relationships with your Mexican banker and local executives of your joint venture partnership also provides access to this kind of business intelligence.

Throughout its two millennia of ruthless history, the Romanian people learned to accept that their accomplishments could be destroyed at any time. As a consequence, long-term planning was useless. More recently, the adverse reaction created by the infamous communist lies called "the glorious five-year plans", along with the current chaotic on-going transition toward profit oriented business, naturally has led to a very short-term orientation in private and organizational life.

Despite recent economic turmoil, franchising in Argentina has rebounded at a surprising rate. In the 1990s, many foreign franchisors (particularly from the U.S.) expanded to Argentina. At the height of the economic turmoil in 2002, the sector shrunk by 4% and the expectations for 2003 were very low. However, contrary to expectations, in 2003, the sector grew by 70%, generating approximately US$1.9 billion in sales in 2003, and adding twenty-nine (29) new franchises. Today, franchising in Argentina represents 20% of the total retailer sector, accounts for more than 13,000 retail stores, and employs more than 100,000 employees. Furthermore, the national franchising association (Asociacion Argentina de Franchising), an organization affiliated with the International Franchise Association, estimates that the sector will continue to enjoy strong growth, projecting sales volume to reach US$2.35 billion in 2005 and for the sector to account for 30% of the retail sector in the next decade.

When doing business in The Philippines, it is advisable to be aware of the Filipino sense of lifelong obligation. A foreign businessperson frequently becomes involved in giving and receiving favors and, therefore, owes obligations to local people and acquires obligations from them. This process of give and take is a normal part of business in all countries, however, in the Philippines, important personal obligations have a very serious, nearly sacred importance. Keeping this cultural value in mind, successful international businesspeople are cautious and conscious in their personal and professional relationships (which are often mixed) with Filipino government officials, business leaders, partners, employees, clients, suppliers and service providers.

There is a very positive climate in relation to franchising in New Zealand where over 300 systems exist. Franchising has been growing at about 20% per annum during the past 5 years and although there is no mandatory legislation, there is a Code of Practice which is mandatory for members of the Franchise Association of New Zealand.

When interacting and working with Swedes, it is important to understand the meaning of the word lagom. It does not have an exact equivalent in English but translates approximately to "just right" or "everything in moderation." It implies an ideal place of moderation and balance. You can see its influence in everything from the decision-making process and the need for consensus, to how much food to put on your plate. The lagom "point" varies from individual to individual, but falls somewhere along the middle of a continuum. It can be difficult for non-Swedes to really understand, however a good rule of thumb is to think in terms being moderate, modest, and to tone things down. It is also important to remember that Lagom does not imply lack of ambition or self-confidence. Swedes are very quality conscious and believe in doing their personal best.

When interacting with Singaporeans, it is vital to know their network of stakeholders. Imagine a chessboard and the strategy involved in maneuvering through multiple players in shifting positions: Which player has the most power? What influence might another have? How might other players perceive my move? Almost like calculating chess players, Singaporeans continually mentally assess the total formula in their surroundings; this assessment drives communication and other required protocol that facilitate their aims and interactions.