As your franchise continues to grow, you may start to think about the idea of expanding globally. While this can be an exciting prospect, it also needs a lot of preparation and planning to heighten your chances of success. We’ve compiled a list of important factors you should take into consideration when taking your franchise abroad.
Before trying to expand internationally, it is crucial to first determine what the market looks like in the new countries you are considering. Assessing the economic climate makes it easier to estimate the potential earnings of your brand while sussing out the competition can help you to see the level of demand for your product or service. Be sure that the level of competition isn’t nearing saturation as this will make it difficult for you to introduce and expand your brand. Consider differences in your audience as well. It’s very likely that your customers in another country have very different behaviours, lifestyles and purchase activity compared to your home market.
This is one factor that absolutely cannot be overlooked - every business looking to expand into a new market will need advice from lawyers in that country (many UK firms have international offices that can help). Legalities can vary from country to country and while some, such as Australia and USA have very specific franchising laws, other countries are less strict. It’s also important to make sure you understand the legal factors surrounding employment, advertising, local taxes and the import and export of certain goods. You will also need a franchise agreement specific to the country and the performance requirements you set for the local partner.
Just as your UK franchisees should add value to your network through local knowledge of trends, demographics, geography, competitors and customers, these are all advantages you should expect a master franchisee or country developer to bring to the table. They should be well funded, connected and have some existing infrastructure relevant to your business e.g. management team, staff, distribution & supply, bank support, lawyers and a track record of success that makes them the best person to roll out your brand in their country. You won’t establish all this in a couple of phone calls and emails - make sure that you conduct significant research on these prospective partners and be clear what you are looking for and expect from the outset.
Consider Cultural Differences
While it is generally assumed that an established and replicable model is the best approach to franchising, this isn’t necessarily true when trying to expand internationally. What is considered the norm in one country won’t necessarily be true for another, so it is important to adapt your business model to suit the market you want to enter. For example, UK clothing retailers who want to expand internationally will need to consider the sizes, styles and colours of the clothes worn in different countries. McDonald’s is an example of a brand that does this well as their menu differs to suit the culture of the countries that they operate in.
Going international is a great way to grow your brand and can produce remarkable results if done correctly. No matter which country you decide to expand into, make sure you carry out the relevant research needed to ensure you feel confident taking the first step.
We have extensive experience in international franchising. Our own CEO Suzie McCafferty began in franchising by building her own retail brand from a single store in Edinburgh to a network of over 70 outlets in 6 countries including the Middle East and Caribbean.
If you would like some more information on expanding internationally, get in touch with us today.