I was delighted when Farrah Rose, one of the UK’s leading experts in international franchising and trainer to franchising associations and UKTI offered me the opportunity to present at an “International Franchising Master Class” in London on opportunities in Latin America. The best thing about this invitation was the opportunity to hear from experts in franchising – including consultants, lawyers and bankers, plus being able to chat with those who are thinking about taking their UK franchise overseas.
It was clear to me after the session that franchising is a great way, if done properly, of expanding your brand and increasing its value. Done badly or using too many shortcuts though, has the potential of ruining your brand. If research is key for any international expansion, given the times and resources involved in franchising, it is even absolutely crucial then.
Getting the research right when thinking about franchising overseas is key not only because of the information it will give you as a business but also because of what it signals. For example, the presenter from Lloyds Banking Group explained that banks will see it positively that you have commissioned professional consultancy on this matter when reviewing your business plan and consequent requests for banking services. Even national authorities in other countries will see this research positively when going through any applications to expand into their country. Moreover, research can be the “ammunition”, as Farrah said and John Pratt emphasised, when dealing with a potential franchisee – it means you will know at least something about that market and will project the image that you are serious about sourcing information – it gives you power apart from signalling that you actually care about an particular market.
The other aspect of international franchising that was clear from all the presentations is the need for a long-term vision. This strategic vision is something I emphasise, not just for franchising, for Latin America. In the case of international franchising, a minimum of a 5-10 year vision is essential, from the initial stages to the very last. Therefore, the other conclusion for me was that a franchise needs to be successful and well-established in its domestic market to start thinking about going global. This is very different from exporting products, where you can global overnight. The need for this is a track record – of successes and failures – that will help them minimise risks in that 5-10 year window and with the huge upfront investments that going global through franchising requires, from lawyers, consultants, lots of travel and so on.
I leave you with a thought from John Pratt from Hamilton Pratt Solicitors: “it’s all about relationships”. He insisted on looking beyond “the legal stuff” and the paperwork – what really, really matters is building strong relationships. If both parties are happy, if they communicate and if they are both making money, then your international franchise is on its way to success.
Our presentation on opportunities in Latin America for international franchises can be viewed HERE.
The International Franchising Centre is organising more FREE International Franchising Masterclasses in London, Birmingham and Manchester in 2013 – register HERE.