Once momentum is built for a franchise brand in its home country, a franchisor’s natural next step is consideration of international expansion. When the weighty decision is made to cross cultural and geographic borders, a franchisor embarks on the careful process of securing international master partners. The key is finding the right partners – not just any partners. This is a cautious and careful art.
Too often, franchisors rush the process. As soon as they garner interest from a group overseas, they’re eager to strike a deal while the iron is hot. They may not always go through the multiple necessary steps to thoroughly vet the partner’s true interests, goals and philosophies toward business. This is usually why many franchise brands fail outside of their home countries.
Picking a master partner in a new country is a tricky, delicate process. When carried out properly, dotting all the “i”s and crossing all the “t”s, it can produce highly successful and profitable results for a growing franchise system. Although Massage Envy only recently turned to international expansion, our partner in Australia recently opened two corporate-owned stores and multiple new franchised locations are set to open this summer in Australia as well. We are also in discussions with additional potential partners in Mexico, Canada and the United Kingdom. Getting these agreements close to finalization did not happen overnight. In fact, in my 15 years of experience in international franchising, I have found that the timeline for finding the right partner and putting together a deal that’s a win-win can take anywhere from 12-18 months.
Initial steps: update your website, start networking
Before making any moves to attract master partners, it’s essential that franchisors be prepared first by doing things such as updating their websites to include a section on your international strategy. Your website will end up being your top lead generator so you want to make sure it’s updated at all times.
Next comes networking
While this may seem obvious, it’s important to point out the critical nature of building an international network of people who understand your brand and the type of candidates you are seeking. This will significantly streamline your search process. Massage Envy attends franchise shows all over the world. Our purpose is to meet the right people who can connect us with the right groups for the countries in which we are seeking to expand.
When you build a trusted network of people, they begin to know exactly what qualities and types of candidates you are looking for. It makes the process slightly less tedious. First, we look at a total of about 30 target countries and narrow that list down to 5-10. When narrowing the list down, we eliminate countries that either don’t appear to be a good cultural fit for our brand, may not have the market share we are looking for or perhaps there are political issues going on that we feel need to be settled first before entering the country.
From there, we see if our network of people know of organizations within the regions that would be a good fit. We are, in essence, looking for someone who is as committed to the brand’s success as we are, and we prefer to only have one partner in one country that is responsible for the development of our brand. There are usually four main qualities we look for in our master partners – they believe in and have passion for our brand, have the infrastructure already in place to introduce our brand, currently support a customer-oriented business and have an impeccable reputation in their country.
Another key quality is their overall passion for the brand and whether the potential partner would fit in culturally with the franchise. It can be difficult at the international level to find someone with the same passion you have for your brand, because many investors are simply looking for just another franchise to add to their group’s portfolio. The passion can be seen if your visions align for the brand moving forward. If the franchisor and the potential master partner share the same purpose, vision and promise, it’s a step in the right direction for a match made in heaven.
Meet the potential partner in person – on both turfs
The next step can involve a significant amount of travel abroad. This time, the travel is to the specific country of the new potential partner. At Massage Envy, we typically first connect over the phone for a long, engaging conversation and if that goes well, we then schedule an overseas visit to the country to let them know we are interested in learning more. The mission of the visit is not to immediately sign an international deal. Rather, it’s to meet the group and team, tour some of the stores they own and gauge their level of care and passion, such as their attention to small details. Red flags can be identified much quicker in-person than over the phone, which is why we feel this step is one of the most important ones in the process.
When talks with a master partner extend to a final set of visits on your home turf – and likely another on theirs – it’s important to remember not only are you selling them your business, but they are also selling you their expertise. It cannot be emphasized enough that the partner has to share the same beliefs, goals and ideals as you. If the group continues to ask the same questions and simply go through the motions – just kicking the tires – then we will gladly move along to another lead. The most successful relationships begin with the prospective partner asking quality questions, digging for unique information and truly showing that they want to help grow the business for more reasons than profits only.
There are many factors that a company has to consider when discussing the realistic possibilities of international expansion. Regional location, cultural differences and identifying whether or not there are target customers within the country are all highly influential, but the most important factor is choosing the right master partner to lead your company from afar. At the end of the day, it’s your brand that people see and experience, not necessarily the person who runs it. If the public sees a failing, unprofessional business, they may assume that this one location is how the entire system operates, which is never an impression you want for your brand.
These mistakes can be avoided if you trust your instincts and adhere to a well-prepared process. Narrow down the country based on data and potential success rate, believe in your networks that you worked hard to build over the years and don’t rush the deal or “grab the check” just because it’s being offered.
You don’t want to rush the process and forget the bigger picture – finding the right partner who you can trust to properly introduce your brand in that country. If you take your time, stay true to your beliefs and find a partner with the same passion as yours, you’ll end up with the right partner to ensure long term success with your brand in other countries.
Seven Ways to Ensure Success Abroad
1. Research the country to ensure that the likelihood of success is very high, meaning, no immediate red flags.
2. Trust your networks to help guide you to the right groups within specific territories.
3. Research the prospective partner to learn about their current portfolio, infrastructure and overall reputation in the market
4. Make the investment to visit groups abroad—don’t rely on them to come to you.
5. Make sure the prospective partner is fully engaged and that both sides are talking about the right things for the organization.
6. Have the mindset that the master partner needs to sell you as much as you need to sell them.
7. Aim to have one partner per country to develop the entire market.
ABOUT THE AUTHOR
Lee Knowlton is the Senior Vice President for Global Sales & International at Massage Envy and is responsible for all of the company’s growth throughout the United States and abroad. He previously served as President of International for Cold Stone Creamery, Inc. and President & CEO of Fun Brands before overseeing progress for Massage Envy’s more than 1,165 locations. To contact Lee or for more information on the Massage Envy franchise opportunity, email him at LKnowlton@massageenvy.com.
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