The world is a global marketplace and interest in international franchising has never been higher. Regardless of whether a business operates a franchise network in its domestic market, the prospect of expanding overseas to new territories can often be attractive.
Whether you are seeking to expand through a well formulated international expansion strategy, or - as is more common - you have received an approach out the blue from someone eager to bring your brand into their country, it is important to get your franchising structure right.
There are three main methods of franchising internationally:
Direct Franchising - where the franchisor (or a subsidiary of the franchisor in the overseas territory) engages directly with a franchisee based in that overseas territory for the operation of a single franchise, or the development of a specified region.
Master Franchising - where the franchisor appoints a "master franchisee" for an overseas territory who is then responsible for recruiting and supporting sub-franchisees in that territory, essentially acting as the "franchisor" in that jurisdiction.
Joint Venture Franchising - This is essentially a mix of the two above, where the franchisor and a local partner in an overseas territory set up a joint venture company which acts as the master franchisee for that territory.
Once the structure is decided, the franchise documentation then needs to be prepared to implement it whether this is a Master Franchise Agreement, Area Development Agreement or International Unit Franchise Agreement.
Some common things to bear in mind when franchising abroad:
Is your Trade Mark registered in the target jurisdiction?
Are there any franchise specific laws or regulations in the target jurisdiction?
Are there any other cultural differences or sensitivities that need to be catered for in the target jurisdiction?
Our team have great experience in helping clients expand through franchising in Europe, the Middle East, Asia, North America and Australasia.