Appointing franchises in foreign countries is not a simple task as you would do it nationally. We take great care in preparing a franchisor for global expansion and hence carry out several tasks to ensure that the right fit is maintained. Financials play a major role in any franchise appointments.
A pro forma should be developed to test economic assumptions, such as the initial master franchise fee, split of individual franchise fees and royalties, and how to handle product sales and commissions; this should also include a projection of the initial investment and ongoing expenses that the franchisee/area rep will incur and the anticipated cost to the franchisor to establish a franchisee/area rep.
We may often use a franchise show abroad as a convenient platform for visits to particular countries or regions, but the preparations for such visits are very important. Our main purpose is always to pre-arrange meetings with the best prospects ahead of the show and meet with them during the show, but at a different location. Our booth at the show may promote several franchise offers, and some of our clients participate just for the exposure at the show. However, the more effective approach is to use the opportunity to close sales outside of the show, using the show simply as a base for operations.
The real work, however, takes place before we leave for the show. This work is not dissimilar to that of assisting with mergers and acquisitions. We are looking for the right strategic partners, and our collaboration with them is more in the spirit of equals joining forces than our selling them on our product. We always prefer to have a few suitable candidates in the running at the same time, and our tactics may differ for each of them, as they may need us for different reasons. In order to reach best candidates, we need to research each market before contacting the candidates. This pro-active approach is designed both to eliminate interested, but inappropriate partners, and to learn who would be most suitable and what they need. Simply “taking orders” at a franchise show does not even begin to provide these advantages.
Finding the right candidates is as much an art as science. The science side is rather obvious and similar to the domestic scene, in which a company like HLL acquires brands to gain dedicated channels of distribution. The art side has more to do with understanding the existing dominant and not so dominant players of the local economy, and especially, whom to avoid. Here, we use both our own network of contacts, commercial media, and available commercial government and other private trade information facilitating organizations. On occasion, it may even be appropriate to hire a local investigator to verify some information. Our initial research is not meant to be exhaustive, but just sufficient to gain an understanding of suitable candidates. Our subsequent one-on-one discussions with the same might reveal a need for further investigation, but any controversy or uncertainty may simply lead us to concentrate on other candidates.
Because the approach and cost may vary greatly, we tailor each search assignment to the needs of our clients. You may prefer some strategic advice or complete outsourcing of your international operations, and we are prepared to assist at any level.
You could also visit our franchise portal, franchisebazar.com and showcase your brand in the relevant section seeking master franchise.