Expanding a business overseas is always a risky proposition. Any business expansion is challenging, but overseas expansions come with their own unique set of hurdles. For businesses that have embraced the franchising model, overseas expansion will be a different experience.
If you are going expand your franchises for sale internationally successfully, proper preparation is key. Here’s what you need to know before you kick things off.
Get an impartial assessment of your business
An overzealous expansion can cripple an otherwise healthy business. Even a local expansion can be disastrous if you aren’t fully prepared for it. Before you commit to expanding your business overseas, you need to be certain that your business is healthy enough to survive the process. Conducting an internal audit of your finances and current performance is a good starting point, but an independent outside evaluation is also a good idea.
Franchise consultants exist for this very purpose. An experienced franchise consultant won’t just be able to evaluate your business’s health; they can also help you navigate the pitfalls of international franchising. Moving into a new market is always a challenge, whether it’s a domestic or international transition, even for the best franchises. A franchise consultant can tell you definitively whether you are properly prepared for the undertaking or not.
Remember, just because your business is working in your home market, that doesn’t necessarily mean it will easily transpose to another market altogether. And even if your business itself is viable, you will still need to find franchisees to take it on.
Research the requirements for your target market
Different countries have different rules and regulations for businesses. Franchising regulations exist separately to these; you need to have a solid grasp of both if you want to run a successful overseas business. Looking at the franchise opportunities that are already present in your target market will give you an idea of the kinds of franchise businesses that are likely to succeed and thrive. If there are plenty of successful franchise businesses in your field already operating without issue, that’s a good indication that whatever regulations are in place are workable for you.
Consider the cultural differences
Understanding the different laws and regulations for businesses is important, but you also need to have a good awareness of the social, cultural, and political differences that exist. These are just as important for predicting how well your business is likely to perform overseas. The local cultural and societal attitudes will play just as big a role in determining how you operate and market your business.
You will also need to find franchisees to work within your target market. A good understanding of the local culture is going to prove invaluable for finding the best franchisees for your business. If your business ethos clashes with the generally-held views and ideals of your new market, it will be difficult to find franchisees and your expansion plans will stall before they’ve even begun.
Get your trademarks in order
Protecting your branding and intellectual property is always important for any business. Unless you have secured global trademarks for your business, you will need to prepare to sort these out before you expand overseas. You don’t want to invest the time and effort required to take your business overseas, only to discover that someone else has already claimed the name that you want to use.
It’s important to be aware of the local culture and society because you might need to modify your branding. If you alter your branding in any way to make it compatible with your new market, you will need to secure separate trademarks.
You need to sort all of these issues out before you enter your new market. Failing to do so can be a very expensive and time-consuming mistake.
Define your target audience
One of the main benefits of franchising your business is that franchisees will take on responsibility for the day to day operating of their franchise and will recruit staff to work there. However, the more guidance and information you can give them beforehand, the more effectively they will be able to do their job.
In most cases, you will be targeting the same demographics in your new market as you were back home, but you might have to make some adjustments. The average consumer for some industries will vary slightly between markets. Some industries vary wildly from one country to another in terms of who tends to use them. With food franchises as an example, there may be varying demand for your types of food in certain countries. Such as a fish and chips franchise, you’d need to take into consideration the demand for fish and chips, and local fish supplies and laws.
As part of your preliminary market research prior to your expansion, you need to determine whether you will be going after the same demographics or whether you need to redefine your target audience.
As long as you lay the groundwork the right way before you pull the trigger on an overseas expansion, there’s no reason you can’t make ut work. But if you are going to successfully take your business into a new market and find talented franchisees to work with, you need to do your homework.