INTERNATIONAL ROUND TABLE Sharing a world of knowledge
The recent inaugural Round Table at the British & International Franchise Exhibition (Olympia, March 13-14), attended by those in retail and hospitality franchising at home and abroad, brought up a number of lively and interesting discussions on the boons and pitfalls of doing business overseas
Sarah Benson, Licensing director, Jenny Packham, fashion retail brand
Ben Jobling, International franchise and wholesale director, Dune, footwear brand
Lee Braid, International Franchise Director, M&Co, high street retailer
Euan Ferguson: Brand reputation is paramount when franchising internationally. What are the most important things to consider?
Lee Braid: For anybody that is starting or thinking about it, registering your trademark would be the fi rst thing – make sure they’ve got that belt and braces covered. You’re not going to be fully registered everywhere ’cos you’ve not had it in your mind that’s what you’re going to do. But you must at least start the process. We’ve been at least able to demonstrate to the partner that it’s under way and therefore they’ve been happy to work with us … without that we’d still be on day one.
Ben Jopling: I’d expand on that even further and register domain names because people will show an interest, and quickly go out and register and then charge you for it.
LB: With domain names it’s probably even more complicated. With a trademark you can register it yourself for that country. For a domain name in many cases it has to be a local company that registers it so, as M&Co, or as we’re known on the web, ‘mandco’, we actually can’t register that in a number
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Alex Rattray, Group Operations and Process Manager, Fitness First gym chain
Hinrich Cordts, European Business Development Director, BoConcept furniture stores
Euan Fraser, Facilitator
Founder of AMO Consulting, franchise advisors
of territories that we’re present in. So, contractually, we’ve had to add: “Thank you Mister Local Franchisee, can you make sure you sort this (registration) out for us? But, if in the future we decide to go our different ways...” We can’t own the domain name but we can at least ask them to sell or transfer it on to a third party.
EF: How much has it cost you to register your trademarks?
LB: I would put a fi gure of roughly £2,000- £3,000 a territory. Some we can do much, much cheaper…One of the things we have done – even though you have the EU and Madrid Protocol – is to still treat each country individually. We had a case in Bulgaria where we pointed to EU rulings, but they were reluctant to accept them. When it suited, it was EU rulings and when it didn’t suit, it wasn’t EU. My advice would be deal with the country direct and then, as a backup, use anything more global. So if it’s in the Gulf, something GCC-wide, use that as a backup, rather than as your primary way of registering… It’s my biggest cost. To put it in context, with payroll costs, everything else, on my P+L, my most expensive line, even now, is legal.
EF: How do you select partners?
LB: The brand is only a small part of what we’re giving as a franchisor. What we’re also giving is technical support, the knowledge, the know-how of how to run a multiple fashion retailer across 6,000 options, and that’s what franchisees are buying into. If they take Louis Vuitton, 90 per cent is the brand and 10 per cent is the support. For us, it’s the other way round.
Partners need to demonstrate they have the local knowledge, infrastructure and fi nancial backing to launch and develop the business. For us the ideal candidates are either existing fashion retailers or businesses that have experience of franchising. At M&Co it has been very straightforward for me. The business has given me quite clear remit. If you’re just going down a path that’s ultimately going to come back and cause you a problem, you just have to walk away. These things have a habit of coming back round again in due time... in the right way, anyway!
EF: I knew of a clothing retailer who found out they actually had a shop in Lagos, Nigeria, but they didn’t know about it! As far as they were concerned they were selling to a wholesaler. So, again – brand repair, brand control...
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Hinrich Cordts: We have also experienced that – customers’ feedback on something bought in our “Beirut store” – but we don’t have a store in Beirut!
EF: It’s the risk of doing international business, even through wholesale – how do you control it at Jenny Packham?
Sarah Benson: Even having wholesale relationships is a huge risk and you’re continually policing it and of course the further afi eld you go, the more risky it is. We have recently converted one of our wholesale clients into a franchisee – she knew us, we knew them, we knew the market well, and Matthew, our CEO tends to make the fi nal
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