If you’re thinking of franchising outside India, you should realize that international franchising is quite different from what is followed within India. Moreover, several companies that are involved in company-owned operations nationally would like to go global with an elaborate franchise strategy. In both of the cases, a new program is developed and the client will have to go through an evolution process where they start to do business abroad.
Global Franchising Solutions
The international franchise strategy may involve granting rights for the entire country or for the specific regions within that country or setting up operating units and subsidiaries. Most importantly, you would need a local representative who will help you regarding local issues and reaching out to the local networks. Then, we will assist you in getting things like initial contacts, preparing the right offerings for them, qualifying them, negotiating with them, and finally ensuring that they get the results on a timely basis.
Therefore, we transform and translate cultural obstacles into creative opportunities. We make sure we listen to your objectives and deliver your practical options in getting them implemented. As a result of that, we can create world-class Franchising Practices. Being in collaboration with some of the finest franchising consulting and brokerage companies across the globe, has partnered with them and exchange synergies on franchising for our mutual clients. Therefore, we can be your one-stop contact in helping your franchise across the globe.
Points to cover when structuring a Master Franchise:
- Franchise structure: Country Master Vs State Master Franchise Vs City-franchise Vs Unit Franchise
- Territory size should correspond to getting several units to be opened.
- Require that the chosen franchisee should open showcase and training unit(s) before selling franchises.
- Development schedules to make sure short-term and long-term goals get set and should pre-empt competition.
- An initial term should coincide or extend just beyond the development schedule.
- Allow franchisees who have completed their development schedule on time to renew for one or more additional terms, but to retain the right and requires the establishment of additional franchises during renewal time as a condition of renewal; if
- If City Franchise is unable to comply and renew, the franchisor may take over the area or can appoint a new representative to manage the area.
Duties of a Franchisee may include but are not limited to:
- Contributing to the Franchisor’s Franchise lead generation activities like advertising on the web and national publications, preparing videos, printing brochures, and generating additional franchise sales leads,
- Qualifying these leads,
- Following up the qualified leads until they are a ready sign,
- Filling up the blanks in the documents for franchisor and franchisees to sign after the appropriate cooling-off periods,
- Training of new franchisees at the showcase unit,
- Helping the new franchisees in the opening of new units,
- Periodically visiting along with the franchisees in an area,
- Co-ordination of marketing, testing and the introductions of the new products within the area,
- Holding refresher training,
- Training of new managers for the franchisees if necessary,
- Reporting to the franchisor on franchise compliance and recommending termination if feels appropriate, etc.
- It may include franchisor duties also:
- Coordinating the internet and multi-territory marketing for franchise sales leads,
- Providing lead generation and sales tools,
- Turning over “local” leads to franchisees
- Training in franchise marketing and sales,
- Training the franchisee for training, assisting and supervising the franchisees,
- Coordinating the system-wide product marketing measures,
- Delivering the Area Rep with new developments to be introduced to the market,
- Holding an annual franchise meets, etc.
- Inclusion of typical default provisions,
- A classic choice of law and venue provisions to be included,
- Typical confidential and non-competitive provisions to be included.
Requisite for a master franchise
A Pro-forma is to be developed to test economic assumptions such as the preliminary franchise fee, distribution of individual franchise fees and royalties, and the way of handling the product and sales and commissions; these also include a projection of initial investment and ongoing investments that the franchisee/rep will incur and the expected cost to the Franchisor to establish a franchise/ area rep.
We may sometimes use a franchise show abroad as a handy platform for visiting particular countries and regions, but to make preparation for such visits stay very important. Our main aim is to do the prior arrangement of the meetings with the best prospects run-up to the show and meet them during the show but at a different location.
Our stall at the show would promote several franchise offers and some of our clients participate to get the exposure at the show, but for more effective means is to use such events to close sales leads apart from taking part in the show, beyond those such shows are used simply as a platform for operations. Of course, having several clients from different target markets join the show, it helps to defray the cost of attending the show and with a reduced cost for each client makes it possible many to “test the waters” in new markets. As a result, this situation can be a win-win situation for all involved.
The real job however gets taken place before we arrive at the show. This job is not different from that of helping with mergers and acquisitions. We are in search of the right strategic partners and get in touch with them is more based on equality that is more based on joining the forces than selling them on our product, though there is always some selling opportunity to come across. Of course, we always have some suitable candidates in the run and our strategy may vary for each of them because they need us and we also need them for different reasons.
CONNECTING WITH APPROPRIATE CANDIDATES
To reach out to the most suitable candidates, we research before getting in touch with the candidates. The pro-active approach has been designed for zero in both the interested and uninterested. But inappropriate partners and for knowing who would be most suitable and what are their requirements. Simply, “taking orders” at a franchise show doesn’t even start to deliver these advantages.
Finding out the right candidates is more of an art as well as science. The science aspect is rather obvious and similar to domestic science where a company likes HUL acquires brands to have an out-and-out distribution channel. The art aspect is more or less related to understanding. Hence, we can differentiate between which are the existing dominant players and which are not the dominant players of the local economy, and particularly those which are to be avoided. Here, we use both our local network of contacts, commercial media, and available commercial, governmental, and other privately-owned trade facilitating organizations. In some circumstances, it may be appropriate to hire a local investigator who would verify the information. Our preliminary research won’t be exhaustive. However, it is just enough for gaining an understanding of suitable candidates. Then, subsequent face-to-face discussions with the same people might open-up a requirement for further investigation. But any controversy or uncertainty may take us to concentrate on other candidates.
Because the approach and the cost may vary significantly, we are tailored to each search assignments to the needs of our clients. You could require some strategic advice or complete outsourcing of your international operations. We will help you at every level.
