7 Essential Rules for Franchising Abroad

7 Essential Rules for Franchising Abroad

Whether you franchise in Asia or elsewhere, you will need to follow these essential rules, says Jamie Izaks

International expansion is a strategic business move that can effectively expand your product or service into new markets with relevant customers. But, for those of us in franchising, expanding the business model beyond U.S. boarders carries additional care and requirements beyond that of a typical business. It requires patience, strategic thinking and planning to ensure it’s done right.

There are plenty of elements to consider when pursuing the road to franchising internationally, and I like to think of some of the most essential elements as ‘rules’ for taking your franchise abroad. With these seven key rules top of mind, this process can become much smoother.

Immerse your brand in the culture

Understanding your customer base in a foreign market is key to the vitality of your business. Finding success within a new market begins with research, so take every opportunity to connect with industry professionals in the area to learn what it takes to run a business there. They can help identify language barriers, cultural differences and other important matters.

During your research, take some time to understand the business etiquette as well so you’re prepared when visiting these new areas. For example, handshakes have become an accepted custom in the Philippines, Malaysia, Vietnam, Singapore and Indonesia, but a greeting called the wai is customary in Thailand. Understanding key cultural differences such as etiquette can make all the difference in forming international business relations.

With the brand itself, consider what service or product alternatives should be used, such as with food ingredients, and what cultural changes need to be made to the brand. These differences are essential to understanding and catering to the needs of your new customers.

Don’t underestimate the challenges

Franchising abroad brings a wealth of barriers to overcome, such as language barriers, laws and regulations, intellectual property rights and more. Know your challenges and manage your expectations – most importantly, don’t underestimate the challenges you will face. Expanding your brand will take more time and resources than you may think, so keeping the right mindset is essential, and ensure that you have the right amount of resources in place.

Consider the legal policies

One thing that cannot be overlooked when franchising abroad are the standards and legal policies. Note the differences in what’s required to regulate your business and the relationships between franchisor and franchisee as compared to your home markets. For example, in Vietnam, there is no single body of legislation governing mergers and acquisitions. As a result, several areas of law such as investment, securities, tax and foreign exchange may now need to be considered when considering the offer and sale of franchises. Allowing enough time to ensure all your legal bases are covered is essential.

Choose your franchise partners strategically

One of the most critical components of successfully taking your brand international is finding the right franchise partners. Spend time seeking out partners who match your values, attitudes and behaviors – they’ll have your best interests in mind. Additionally, it’s essential that your partners not only understand the franchise model, but that they also have the desire and skills necessary to replicate it, as it’s not always feasible to travel to ensure your business is running smoothly. The right franchise partners are the key to the long-term success of your brand, so choose wisely.

Establish open lines of communication from the start

To the dismay of many business owners, you can’t be everywhere for your business all at once. But, as your business continues to expand, especially internationally, business leaders need to allow others to take some control. This means entrusting your franchise partners with the successful execution of your business in a new market, which begins with open lines of communication between both the corporate team and your franchise partners from the beginning.

This open dialogue should also include extensive initial training processes, daily and weekly check-ins and visits to the international businesses multiple times per year. Together, this establishes a rapport with franchise partners to help enforce your brand standards and guidelines for the future.

Take note of the competition

Observing your competition can help solidify your approach in establishing cultural norms and values and naturally blend an authentic concept into the market. Plus, taking a look at staple businesses in the area and identifying how they’ve achieved their staying power will determine what you’re up against and what you can do to be successful. What is giving these brands their edge? Take diligent notes and see how they can apply to your success.

Ensure that your business can run smoothly

Ultimately, you’ll want to pull out all the stops to help your business seamlessly blend into the new market. A large part of this comes from ensuring your employees are trained and that staff objectives and standards are clearly defined. These people will be the leaders of the business, so take time to consider language barriers and other factors that will impact getting your business up and running in an international market.

Jamie Izaks is the president of All Points Public Relations, a franchise-focused PR agency based in the Chicagoland area. www.allpointspr.com.

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