What Is International Franchising?
The global growth of a business or existing franchise brand is often effectively achieved by international franchising or the granting of international licences, by the Franchisor, to Master Franchisees, Area Developers or Direct Franchisees within specified countries or regions outwith their home market, enabling worldwide growth and brand awareness. International franchising is deemed to be a more cost effective and operationally efficient method of expanding businesses and gaining recognition overseas than developing locally managed outlets.
Advice from Master Franchising EXPERT SUZIE McCAFFERTY
Master Franchising involves the granting of rights by the Franchisor to the Master Franchisee, to operate the brand within a specified country or region and the authorisation for the Master Franchisee to then franchise to others within that territory.
With the back up and support of the Franchisor’s head office team and proven systems, Master Franchisees are required to develop the brand in their country or region, using their local knowledge, contacts and business experience to successfully expand the brand through franchising to others in accordance with a pre-agreed development schedule. Master Franchisees must firstly operate their own pilot franchise within their country or region and, upon successful operation of this pilot, they shall then have the ability to operate, sell to others and develop multiple franchises within their dedicated country or region.
Master Franchise fees vary depending on the country or region and market potential. Master Franchisees will be required to have sufficient working capital to fund the initial Master Franchise fee, the set up of their own pilot operation, as well as the ongoing resource required to develop a head office, training and support operation to support their network of franchises within their specified territory.
Master Franchisees have the potential to generate multiple revenue streams through the profits generated from their own managed outlets, the sale of franchises to others and monthly management royalties generated within their franchise network. For the correct business partners, this is an attractive business proposition, with the potential of an excellent return on investment.
Area Developer Licensing
Area Developer Licensing gives the right to develop a country or region to an individual, company or consortium, allowing it to develop its own managed franchise outlets in line with a pre-agreed development schedule.
In some instances, businesses may enter new markets through granting the rights to operate a single franchise to multiple individuals. This is known as Direct Franchising. In this scenario, Franchisees would be trained and supported directly by the Franchisor as opposed to a country or regional Master Franchisee.
Using the extensive hands on experience of successfully developing our own brands internationally, Platinum Wave will assist you in developing your international growth strategies. It will offer assistance with country specific market research, recruitment of international Master Franchisees, Area Developers and Direct Franchisees, refining of your franchise proposition in line with each new market to ensure it is viable and meets cultural requirements and assistance with the launch of pilot operations within new markets. Guidance will also be offered with regard to the development of International Operations Manuals and Franchise Agreements including advice on trademarking, international supply chains and area specific customer base.