ADVICE
Franchising on a global scale
Nick Williams of Ashtons Franchise Consulting explains what you need to be aware of before expanding your franchise overseas
T
he benefits of franchising on a national level are well established. It enables companies to grow successfully by sharing expansion costs with a countrywide network
of highly motivated franchise owners; these franchisors are legally bound to operate within pre-determined standards and service levels. When domestic opportunities are limited by a quieter marketplace, franchising overseas can be a particularly effective means of expanding and bringing a whole new dimension to a brand.
Given the recent events within our domestic economy, coupled with the emergence of less-developed countries as the new economic stars, UK businesses are increasingly looking overseas as an antidote to stagnant domestic growth. If you add to this mix the fact that the international community loves British brands, you can understand why franchising is becoming a popular way for businesses to expand globally.
Reduced risk Entering a foreign market can be a huge leap into unchartered waters. However, franchising allows you to reduce the financial risk, as the investors (master franchisees and area developers) who share your vision for the
30 |
www.franchisornews.co.uk
development of the brand will be shouldering the burden with their own investment at stake. They are therefore likely to have a genuine commitment to the success of the business and a determination to hire the right people and instil correct company ethics.
Local knowledge
Knowing the cultural and commercial peculiarities of the new location or territory is invaluable to the ultimate success of the brand. By franchising, the process of appropriately adapting the business for the local market is transferred to the country’s franchisee. This process takes place by way of collaboration, but enables you to achieve significant savings, as the costs of localisation are fundamentally born by the franchisee, albeit subject to your approval.
Key issues The rewards can be high. However, if not done correctly, overseas expansion can prove costly. Here are some of the issues you should consider when deciding whether to expand your business internationally through franchising:
• A business system that can be replicated – a good indicator of whether your business can
be replicated abroad is whether you already have several branches or outlets in the UK
• The ability to find and convert partners – although consultants, social media and UK Trade and Investment are all excellent sources, a tweak or two to your existing website can produce surprising results. You must, however, have a response ready that ‘sells the sizzle’
• Logistics – if your network is based on the supply of particular products or materials, ensure that you are able to either supply these to, or source these within, the relevant jurisdiction
Once you have found a suitable partner, you must then consider:
• Minimum performance – if you have to grant exclusive rights, agree minimum performance targets that your partner must
Page 1 |
Page 2 |
Page 3 |
Page 4 |
Page 5 |
Page 6 |
Page 7 |
Page 8 |
Page 9 |
Page 10 |
Page 11 |
Page 12 |
Page 13 |
Page 14 |
Page 15 |
Page 16 |
Page 17 |
Page 18 |
Page 19 |
Page 20 |
Page 21 |
Page 22 |
Page 23 |
Page 24 |
Page 25 |
Page 26 |
Page 27 |
Page 28 |
Page 29 |
Page 30 |
Page 31 |
Page 32 |
Page 33 |
Page 34 |
Page 35 |
Page 36 |
Page 37 |
Page 38 |
Page 39 |
Page 40 |
Page 41 |
Page 42 |
Page 43 |
Page 44 |
Page 45 |
Page 46 |
Page 47 |
Page 48 |
Page 49 |
Page 50 |
Page 51 |
Page 52
