According to an International Franchise Association (IFA) early 2014 survey of its franchisor members, 82% now think that taking their franchise international is important to the future success of their franchise. Five years ago, 54% thought going international was important.
Based on 25 years of international franchise experience as a franchisor, master franchisee and, most recently helping over 20 US franchisors go international, I know the most difficult task is finding the right country and the right licensee for your particular franchise.
One solution for US franchises can be working with the U.S. Commercial Service (USCS), the international-focused arm of the U.S. Department of Commerce. The USCS has experts on the ground in over 100 countries whose job is to help US companies sell their products and services.
There are several ways the USCS can help a franchisor go global:
- Country and Sector Reports
- Gold Keys – in-country meetings with pre-qualified licensee candidates
- Franchise Trade Missions – to the Philippines, Mexico and India in 2014
- Background checks on licensee candidates
- Meeting arrangements and local advertising
- Local business and cultural knowledge
- Follow-up after your in-country meetings
But this is not magic where you get on the airplane, land in the new country, meet your new licensee, sign an agreement, get back on the plane for home, and the new licensee sends you the initial license fee. To have a chance at success using the USCS team in any particular country, the franchisor must know and clearly communicate the following:
- Why do you want to enter this particular country?
- What is the profile of whom you want as a licensee?
- How is your brand different than what is already in their country?
- Detailed, clear information on your franchise
- Clear steps and terms for acquiring your franchise
- A financial model that shows how your franchise will succeed in their country
- What training, support and marketing help your franchise will give the licensee
And the franchisor needs to clearly define what they want in an international licensee or master franchisee in a country, such as:
- A passion for and understanding of your business
- A successful business with knowledge in your sector
- Good reputation in the country
- Experienced management to put into your franchise
- Access to suitable real estate
- Marketing oriented company
- The capital to start and grow your franchise in their country
Our company, EGS, has successfully worked with the USCS in over 20 countries around the world since 2001. Here are a few of the successes we have had in recent years working with the USCS:
- Central America – Fuddruckers®
- Chile – Denny’s® and Fuddruckers®
- China – Right At Home Senior Care® and Rita’s Italian Ice®
- Dominican Republic – Denny’s®
- Indonesia – The Melting Pot®
- Ireland – Mr. Handyman® and Two Men And A Truck®
- Mexico – Build-A-Bear Workshop®, Denny’s® and The Melting Pot®
- Mongolia – Round Table Pizza®
- Singapore and Malaysia – Abrakadoodle®
- Viet Nam – Carl’s Jr.®
Not all USCS posts in all countries are able to help find area licensees and master franchisees. To find out whether the local office has a specialist for franchising, go to the following website for specific countries: www.export.gov/country
Or you can contact Ms. Jennifer Loffredo, the U.S. Commercial Service Officer based in the US who manages the USCS Global Franchise Team: (248)452-2254, Jennifer.Loffredo@trade.gov
A close working relationship with the USCS people on the ground in the country, plus patience in finding and signing the right licensee for your specific franchise, are critical to success in using this valuable resource for US franchisors. At the end of the day, you have to help the USCS post help you find your licensee in a country.