Franchising Internationally
Expanding a franchised business overseas is a natural progression for many entrepreneurial franchisors. For others, it is a concept that is considered too high risk to consider.
So let’s explore the concept of expanding overseas.
Firstly, before even considering overseas, a Franchisor needs to be confident that the franchise business model is working efficiently, effectively and profitably. A business that is not performing well in its own country is highly unlikely to perform any better internationally!
Why would you consider expanding internationally?
It’s essential to have identified and thoroughly examined the objective and anticipated outcome for expanding the business overseas.
Some reasons for expanding overseas may include;
- Demonstrated interest from a party overseas
- International distribution of an existing product under a franchised system.
- The desire to do business in a specific country due to family/friend ties.
- The sheer challenge of it!
- Limited home market
- Research identifies that your product/service would perform well in specific overseas markets.
What to do next? Continue reading
Spring clean your franchise
Well spring is now upon us and isn’t it just a beautiful time of th
e year?
I don’t know about you, but I find that at this time of the year I get a bit of spring fever!
So I use this extra burst of energy for spring cleaning my business.
Maybe you could do the same? So what could that entail?
- Throwing out those D grade clients – the ones who don’t pay and who don’t appreciate your time and effort.
- Reviewing a strategy for “improving or removing” underperforming and negative franchisees.
- Getting a new business image! Take an objective look at your branding. Is the font tired and outdated? Are the colours uninspiring? Is the brand professional? Would potential franchisees be impressed with your brand?
- Update your recruitment strategy and bring it in line with 2010 technology.
- Declutter the work space. It’s amazing how much junk we all accumulate in our offices. Get rid of it… you’ll feel great.
- Clean and detail working vehicles and environments.
- Rid yourself of staff who are a negative drain on the business but be sure to consult an HR/IR expert before you do.
- Put flowers into the office – it’s incredible how uplifting flowers can be in an environment.
- Have the air-conditioning serviced – it won’t be long before you’re turning that knob from hot air to cool!
- Run a spring themed group meeting with franchisees and share these tips with them. Allow them to rid their winter cobwebs and vent a bit to encourage a new start.
- Many businesses experience a surge in business prior to Christmas, so use this time to prepare for the onslaught. Plan ahead.
- Buy yourself some new summer clothes (well I am a female so of course I think that way) but all you men out there will look fresh and spring like in some new season outfit too!
So then, when you’ve had your spring clean you’ll be ready for a new bout of new business and A grade franchisees and clients.
© franchisingplus
Author ; Carolyn Dufton Dip.Bus(franchising)
Carolyn is the principal of franchisingplus. franchisingplus is a franchising consultancy advising and mentoring on all aspects of franchising on a national and international basis.
The content displayed is franchisingplus copyright and can only be reproduced or re-published with the acknowledgement of the author Carolyn Dufton. www.franchisingplus.com.au/contact/
The questions every franchise prospect should ask?
I see a lot of franchising prospects who are considering purchasing a franchise. In addition to seeing a lawyer and an accountant it is essential that a prospect also engages a franchising expert to review the franchise operation and the system.
Irrespective of the advice that a professional provides to the prospect, the most important and crucial recommendation we make is that the prospect should speak directly to the existing franchisees.
A Franchisor is obliged under the Franchising Code to provide the information of all current and past franchisees.
This vital conversation can be wasted if the correct type of questions are not asked in a particular way.
So what are some of the questions that should be asked of an existing franchisee? Continue reading
Does your Recruitment material have “The WOW factor”?
In todays ultra competitive franchise market, it pays to h
ave
The Wow factor in your recruitment material.
I remember speaking to a franchising prospect a few years ago and he told me that he had turned down 3 cleaning franchises purely on the low standard of their information pack.
Gone are the days when you can send out a photocopied, drab information document. This information pack is often the first impression that a franchise prospect has of your company.
This document then travels to the prospect’s franchise adviser, lawyer and accountant, who in turn would probably comment on the low standard of presentation.
A low standard of information material suggests a “can’t be bothered” approach to the franchising process.
So, be honest and take a long hard look at what you’re currently sending out to your potential franchisees. Continue reading
How do you calculate the correct franchise fee?
I spoke to a client recently who contacted me because of having challenges growing his franchise network.
The first question I always ask is, how much is your franchise fee?
A correctly structured franchise fee is paramount to the acquisition of new franchisees and the growth of the network.
Many Franchisors I speak to have literally plucked the franchise fee out of nowhere!
Now this method may or may not have worked for you. If it’s worked so far then that’s great.
Don’t try and fix something if it’s not broken.
If however…you are having troubles selling franchises, and even getting that initial enquiry, then it may be time to reassess. Continue reading
How to have an effective Franchise Advisory Council?
What is a Franchise Advisory Council?
These organisations can operate under many titles and you may choose to call yours a;
- Business development group
- Filter group
- Advisory committee
- Network council
and really anything else that appeals to you! I would suggest that you don’t get too hung up on the name and that you keep it simple.
So the name aside, why and how would you form a franchise council within your franchise network? or if you have already one, how could you improve what you’re doing now?
Some franchise councils are formed specifically to address a particular niche of the business. This could be ;
- Marketing
- Product R and D
- Conflict
- Service
In general terms the group should be formed to aid consultation on matters of deemed priority by The Franchisor and The Franchisees.
Most franchise councils do not cover specific topics and are broad based discussion groups.
Many Franchisors are apprehensive about forming franchise councils as they fear that will become group “whingeing” opportunities. Continue reading
Franchising your business
Sharing a business through Franchising
Has anyone ever asked you if they can “buy into” your business?
A business has been approached by a third party who has expressed interest in buying into their business.
This prompts the business owner to consider if and how they could include the interested party in their business.
- Could they offer them a partnership?
- Could they sell them a licence?
- Could they become an agent?
- Or should they consider franchising?
The reality of the situation is that a business cannot choose whether to call themselves a franchise.
Franchising is a regulated industry and is governed by the Franchising Code of Conduct. If you are operating within certain parameters you are by definition a franchise and have to conform to the franchising code.
Nor can you engage a franchisee without having provided the legally required franchise documentation.
What are the franchising parameters?
A franchise exists by definition when;
- one party (the franchisor) grants another party (the franchisee) the right to carry on the business of offering, supplying or distributing goods or services under a specific system or marketing plan
- the franchise business will be substantially or materially associated with a trademark, advertising or a commercial symbol owned, used, licensed or specified by the franchisor
- the franchisee is required to pay, or agree to pay, a fee to the franchisor before starting or continuing the business.
Simply because a business is called a licence or distributorship does not mean it cannot be a franchise. If a licence or distributorship meets the above definition, it is most likely a franchise and must comply with the code.
Franchising is not a dirty word
So what if the system that suits your business best should fall within the franchising definition? Well don’t be scared, franchising is nothing to fear if approached professionally.
In fact…. franchising your business could be the best thing you ever did! Continue reading
Franchisor / Franchisee Relationships
How to keep your Franchisees Happy
Oh to wave a magic wand and have instantly satisfied franchisees.
Is this a reasonable objective, and is it really possible to have perfectly satisfied franchisees?
Human nature would suggest not.
However it is essential that a Franchisor’s prime objective should be to nurture an environment of franchisee satisfaction. Satisfied Franchisees sell franchises.
So how does one approach this?
Let’s consider;
Income
If a franchisee is running profitably, the chances are that they are happier than a franchisee who is not operating a profitable operation. Does your system have methods in place to discuss the franchisees financials on a regular basis? Continue reading
What is a Master Franchise?
A Master 
Franchisee can also be known as a sub franchisor or Master franchisor. Whichever term you choose to adopt, be consistent with the usage in your organisation to avoid confusion.
Master Franchising allows people or corporations to purchase the rights to sub-franchise within a certain territory. This allows the Master franchisee the opportunity to grow a viable business in a fairly short timeframe.
The Master franchisee should enter into this role with both sales and management experience, since he or she will not only operate a unit, but will also be responsible for the smooth operation of several other locations as well. Additionally, a Master franchisee holds the responsibility of obtaining and educating other franchisees. He or she needs to be available for continuous support for the other franchisees.
Here’s how it works: Continue reading
Do you need a proven business system to franchise?
“Has anyone ever seen a franchisor that has sold franchises without an open, operating, and successful company owned location?”
This was a question posed on Linked in by Kelcey Lehrich a US franchising consultant.
This question turned into a discussion that was contributed to by many players in the franchising industry.
In essence, there were two camps. The one camp that maintained that it is not necessary to operate a business prior to franchising and who stated:
“Franchising is its own industry. A Franchisor can achieve the same results with a franchisee who purchases the first franchise and uses it as a “showcase” facility. Out of the 76 industries that franchisors are presently franchising more and more are NOT opening company operations. Most franchisors that do have company operations will sell them after starting to franchise.”
The reply to this was; Continue reading
