How to start a successful international franchise

May 26, 2018

Franchising your business across national boundaries can open up exciting opportunities. If you’re considering this, you’ve probably already achieved some notoriety and success in the US, or you have a good reason to believe that the environment in another country will be more receptive to your business.


Your first step should be to investigate the logistics and market of your target country. This can be challenging because of legal and taxation requirements, language barriers and cultural differences, so take your time to be sure that you understand the potential risks and benefits before moving forward. There are a number of factors at play, including international trade agreements, currency rates, taxation on foreign income, the relative security or lack thereof in the foreign market, and shipping and logistics challenges.


As it turns out, finances may be the least of your concerns. If you do your research on the best money transfer services, you can minimize fees and get a good deal when you transfer money from the USA to UK, Eurozone, Asia or any other market. It is important to work with a tax accountant who understands international trade, though, and potentially a legal advisor to help you navigate the trade agreements, tariffs, tax responsibilities and transparent dealings so that you don’t get hit by the IRS or another international tax body for committing inadvertent fraud or tax evasion. You’ll also need to have a business plan that details under what conditions you and your franchisees can be profitable and allows for the fluctuations in currencies and regional downturns. You want to be able to prove the business case to potential franchisees or investors to help them see the value of working with your franchise.


Your franchise’s at-home success and brand awareness in your target market are also important. Companies such as Starbucks, Apple and McDonald’s have a relatively easy time opening locations in new areas overseas because people are very aware of their brand and associate it with quality or desirability. This doesn’t mean that it’s possible to simply copy marketing, branding and operations over to the target market. Successful international franchises understand the value of adapting to local tastes, values and communication styles while holding on to the core of what makes the brand appealing in the first place. One of the best things that you can do when it comes to starting a successful international franchise is finding the right partnerships.


Connect with experts in your target country who have established success in their area of expertise. Marketing and communications, advertising and branding, human resources and operations are all areas that you need to adapt for a new type of customer, to help your international franchisees have the best chance of success. This is important both for well-known brands that have already established brand awareness in the target country, as well as for relatively unknown brands, in which case you want a consultant or partner with local knowledge to help you market your brand and bring greater awareness of it to that international market.


You need to have many of the details in place before you can start trying to win over international franchisees. In a way, you’re not only marketing your brand to international customers, but you’re also marketing your franchise to international operator-owners. You need to consider what their concerns and needs will be, find answers, and present those as benefits in a sales pitch. This means that you need to work out the legalities of operating in another country, the financial realities (including costs of sourcing supplies and appropriate product price points), the market positioning and the projected audience. You’ll pull this material together into a series of pitch documents, ranging from a very brief, compelling initial touch point called an “elevator pitch” on through increasingly more involved steps. At each step, you provide a little more detail and answer more questions that franchisees might have, right up to the detailed business plan that breaks down exactly how and under what conditions franchisees might expect to be profitable by working with you.


Starting a successful international franchise is a big endeavor. Ideally, you would start by achieving success in the US and growing international awareness of, and appreciation for, your brand. Prepare for success by thoroughly investigating your target market, doing due diligence on the legal and financial aspects of expansion, and building a convincing and detailed business plan. Then convert that business plan into a series of pitch documents, meetings or resources that help move a potential franchisee from initial awareness of the opportunity to full investment.



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