A Beginners Guide to International Franchising

There is no denying that franchising is one of the best business model inventions of all time, with the USA being the birthplace of modern day franchising. Brands like Singer Sewing Machine, Ford Motors, and McDonald's were able to cement America as a global franchise leader, a position that it has retained all these years. When it comes to international franchising, the USA has some of the most popular brands from across industries with outlets over the world.

If you are planning to expand your business through the franchise model, you might as well keep room for the global expansion plan in the mix. Here’s a glimpse into that and how it benefits emerging brands.

   

Define International Franchising

Also known as master licensing, international franchising is a business expansion strategy, which goes beyond domestic demand with a focus on global markets. Besides providing franchises to buy in the home country, companies offer licenses to foreign franchisees. 

 

It allows the latter to leverage the branding, marketing, and operations model of the parent company. While it opens up new markets to explore for the franchisor, the franchisee can benefit from the established brand reputation and access to robust growth models.

 

Advantages of International Franchising

The global expansion of a brand through international franchising comes with a host of benefits.

• Exposure to brand new markets is possibly the prime advantage of the international franchise model. It reduces a brand's dependence on the domestic market, creating a wide-ranging revenue generation model that is more scalable and lucrative. However, before venturing into certain geography, extensive market research should be conducted to prevent financial investment risks. 
• Foreign brands unequivocally generate interest, especially in developing markets like Asia, where there is high consumer demand for USA brands. For instance, fast-food franchises like KFC, Starbucks, Burger King, Taco Bell, Dominos, etc., have immense popularity in countries like India, with enterprises and individuals lining up to either form a collaboration or for owning a franchise.
• Some countries have lenient policies concerning the international franchise, including tax cuts and other facilities that might turn out to be more flexible than the regulations of the home country. Seamless expansion with a prospect of a high-profit margin is the positive aspect of expanding across borders. 

Things to Consider When Planning Expanding Globally

Before planning to venture out overseas through the franchise model, there are a few things to keep in mind for an American franchisor, like:

• what kind of franchise one intends to offer. The brand has to decide between master franchise, unit franchise, area directorship, or just collaboration with another brand
• getting legal counsel for acquaintance with the laws of the foreign country
• consulting with lawyers to protect the trademark and patent rights
• creating geography-specific training programs
• being empathetic towards the culture of the country where you are expanding. If needed, certain adjustments such as promotional content and likewise need to be made to prevent any kind of backlash.
  

International franchising is a lucrative business model, provided it is planned smartly and executed strategically.

 

Do you want to know about the best franchise opportunities in the USA or the top franchises to buy? Get all franchise-related information from https://franchisingusamagazine.com/.

 

Source: https://topfranchisesopportunitiesintheusa.wordpress.com/2021/03/12/a-beginners-guide-to-international-franchising/