International franchising means the further replication of a successful domestic franchised business into a new country. Over the years, franchisors have adopted various models which have enabled them to enter new markets and achieve extraordinary success.
It is a strategic way a firm can reduce dependence on domestic demand and grow new, future revenue and profit centres worldwide. One way to ensure success is using a franchise model, as it will help you to increase sales and grow your customer base on an international scale.
When you have a successful business, you do toy with the concept of expanding your business as a way to access new markets and new financial opportunities. Expanding internationally can sometimes be a profitable venture, but there are drawbacks. Many businesses have flopped because they failed to take account of the financial risks involved.
Franchising is a great alternative for companies not wanting to set up new offices. This is because the franchises are set up in locations near to the people that are demanding their products or services. This allows the business owner to focus on supporting the franchisees from one location and ensures that all their customers’ needs are met.
With the world slowly beginning to open up following the Coronavirus pandemic, now more than ever before, countries are pouring million into their economy to help businesses succeed. For businesses looking to grow internationally, this is a great time to consider franchising internationally due to the opportunities that are becoming readily available.
If you are looking for ways to franchise your business internationally, here are just some of the many ways to help get you started on the next chapter of your firm’s journey.
If you have a country in mind that you want to expand your company to, keep an open mind about other countries. Whilst you might have your heart set on one place, you may find that there is not a need currently for the services or products that you provide. As such, if you make the move, you might find yourself struggling to succeed.
Consider how your company has fared both in recent times and historically with its international and national success. Needless to say getting in with a franchise, while your business is in a lull, may not be a best way to set yourself up for success.
It will take time to franchise your business internationally, as such it is important to take the time to research into the country you are looking to expand to. This will provide you with more information about what support is available, if locals of the area are in need of the service you want to provide and also the costs that will be involved in the expansion.
Benefits Of International Franchising
Aside from entering new overseas markets with additional customers, international franchising can also offer your business what is calleda foreign master franchise owners. What this means is that these individuals are typically a native of the country. As such they understand the political and bureaucratic problems in their country far better than any outsider. For instance, if you were to expand to the UK, you may want to consider the support of firms such as Goodman Jones. The firm offer exceptional advice on expansion in the UK.
International franchising also allows a franchisor to build and enhance its brand as a global competitor. Many international markets present numerous growth opportunities that franchisors should develop in the interests of diversification, as well as growth of market share.
One of the other benefits of international franchising is that it can lead to rapid global expansion of your brand and business. Of course, like anything in business, taking the gamble to expand does come with its risks, However, international franchising is very achievable for all businesses. It is important that you seek the right advice before considering international expansion.
Exposure To New Markets
During your expansion of your franchise internationally, you can sometimes take advantage of the new markets available that are unfamiliar with your business model. When you own the first business of its kind in an international market, you may be able to bring in substantial profits. When a new business comes into a region and the people like it, it creates a cash cow for the owner. This is why it is important to conduct research before the move to ensure that there is an opening in the market for a business like yours. As such, take the time to speak with local people of the area, as well as other businesses to see if a business like yours would work well in the area.
Depending on where you decide to expand, you might be able to take advantage of the favourable government regulations in place in the country. In many countries, you will find that you do not have to submit to the same types of regulations that are required in your own country. The added bonus is that you might be able to save some extra money on taxes and the fees it takes to your started in the country. Additionally, if you are fortunate enough to pay lower taxes in that country, it can help improve the bottom line for your business. Which will great help, especially during the earlier months of your business operating in that country.
Consider The Setbacks
One of the potential problems that many firms have ran into when expanding into other countries is overcoming the cultural barriers. Despite something being incredibly popular in one country and has seen remarkable success, does not necessarily mean that the same occur in other countries.Every country has its own culture. Unfortunately, you may not be able to accurately predict what people in that culture will enjoy. As such, it is important to do market research to minimise the risk of failure.
Whilst cultural differences can create issues around branding, public relations and corporate culture, the regulatory differences in countries can also pose a significant challenge to your business. Business laws and regulations can vary significantly between countries, provinces, and states. As a result, you may find that these differences can affect every aspect of your business, including human resources policies as well as employee rights and benefits.
Another risk to take into consideration when expanding into another country, are the financial risks that you are taking on as a business owner. What this means is that the exchange rates between currencies could lead to an unfavourable return on your investment.There is also the possibility that you will have a challenging time getting access to the supplies and products you need in any other country. For instance, you may that that countries charge tariffs and fees to ship products in, which could make your business less profitable.
When making the decision to expand, it is worth weighing up the pros and cons, the great rewards you might reap and the potential losses you may face. Franchising your business internationally is never going to be a straightforward process. However, the potential outcome that your business does exceptionally well is certainly a risk that you most businesses, including yours, simply cannot refuse to take.