Franchise Your Business
F
ranchise organisations are often approached by people from other countries asking if they can become the operator or master franchisee for that brand in their
particular country. It can be tempting to consider international development (particularly with a seemingly willing contact in another country); however, such a step requires a great deal of thought. Franchisors will need to consider their true motivation for international expansion, the costs involved (both human and financial resources), local competition, the laws in a specific country and the long-term intention and investment. Going international is challenging, no matter how well established a brand is in other countries. It is not something to be tried without market analysis, good advice and preparation. There are franchise consultants in the UK who specialise in international expansion and often have a network of contacts throughout the world. It is highly recommended that any UK business considering expanding overseas speaks to appropriate advisers at the outset. When franchising internationally, there are a number of legal and practical considerations to bear in mind.
Corporate structure
How the franchise is operated overseas is important to consider. Options include: appointing a master franchisee (which acts as franchisor in that country and grants franchise agreements to sub-franchisees); appointing an area developer (where the developer is responsible for sourcing franchisees for the franchisor); or direct franchising. Each option will have its own legal and practical implications.
Protecting the brand overseas Arguably a franchisor’s most important element is its brand, particularly its trade name and trademarks. Franchisors considering franchising overseas should contemplate certain questions:
• Will the brand translate to another country, or might it need to be tweaked or translated to make it more appropriate for a new market?
• Is there another business in the target country already trading with the same or similar name?
• Are appropriate domain names and social media handles available in other countries?
• What intellectual property will need to be formally registered and what (if any) may achieve automatic protection? à
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