International franchising is a strategic way to reduce dependence on domestic demand and grow new, future revenue and profit centers worldwide. Extending a brand globally through franchising involves low risk, requires minimal investment, and offers a huge upside potential for scaling capabilities. Take a look at what international franchising actually is, what its benefits are, examples of companies that have successfully franchised internationally, how to get started in franchising, and where to look for additional help.
You can find more information on our web, so please take a look.
What Is International Franchising?
Franchising is a pooling of resources and capabilities to accomplish a strategic marketing, distribution and sales goal for a company. It typically involves a franchisor who grants to an individual or company (the franchisee), the right to run a business selling a product or service under the franchisor's successful business model and identified by the franchisor's trademark or brand.
The franchisor charges an initial upfront fee to the franchisee, payable upon the signing of the franchise agreement. Other fees such as marketing, advertising, or royalties may be applicable and largely based on how the contract is negotiated and set up.
Advertising, training and other support services are made available by the franchisor.
Benefits of International Franchising
In addition to entering new overseas markets with additional customers, international franchising can also offer what is called foreign master franchise owners. These individuals are typically a native of the country and understand the political and bureaucratic problems in his/her country far better than any outsider.
Foreign master franchise owners pay a hefty upfront fee to acquire a designated geographic area or, in some instances, an entire country where they operate as a mini or sub-franchise company, selling franchises, collecting royalties, training the owners, and overseeing all other related matters. They can even open units by themselves. In general, a specified number of franchises must be outlined for the exclusive right to use the business model in an entire country.
Companies That Franchise
Link to THE MIDI.
Domino&#;s Pizza International, Inc. began serving consumers outside the United States in when the first store opened in Winnipeg, Canada. Since that time, Domino&#;s Pizza International has extended its global reach to include more than 55 international markets serviced by more than 3,230 stores.
The company claims, &#;The success of Domino&#;s Pizza outside the U.S. is due to the collaborative relationship between our exceptional franchisees and the corporate team that supports them. Together, we continuously strive to support a policy of 'One Brand&#;One System' in order to be the best pizza delivery company in the world.&#;
McDonald&#;s, another fast-food giant, does business in 119 countries around the world. For those markets where McDonald&#;s does not already have a presence, Afghanistan, for example, the company does not have any firm plans to open locations in these countries. The company says it is instead focusing on the markets where it already has a presence.
Getting Started
The best place to look for getting started is the International Franchise Association. It can help you with the first steps to take and what opportunities are available in the global marketplace. As in any new international expansion, there will be challenges: cultural differences, legal considerations, contract negotiations, and intellectual property issues, to name just a few. Of course, the process is not without its complexities.
Where to Look for Franchising Help
Here are a couple of resources that will guide you in the international franchising area.
Are you an overseas brand and you have interested franchisees and licensees here in the United States?
Do you have interest from master franchisees who want to start selling franchises in the US?
Do you have questions about registering an FDD, the difference between licenses and franchises, or how to franchise in the US?
For many international brands, franchising in the United States makes sense and is an achievable goal. Overall, whether you are a domestic US based brand or an international brand entering the US market, the process of franchising is largely the same and within this guide we'll discuss some of the unique factors that you need to be aware of as you enter the United States market. Generally, for an in depth understanding of franchising and how to franchising works in the US, read the Ultimate Guide to Franchising Your Business.
If you want to learn more, please visit our website international department store franchise.