A Guide To International Franchising: What You Should Know Before Getting Started

Jason Stowe

We live in the age of business without borders. Thanks to the power of e-commerce, any product that can be sold online has the potential to reach a global audience. However, online businesses are not the only ones who can benefit from the globalization of the business world. For businesses that operate primarily from a physical storefront, international franchising is a tool that opens doors to establish a presence in the international arena.

"We have become accustomed to a worldwide community," says Jason Stowe, VP of Franchise Development for Cyberbacker. "As a result, many businesses are eager to expand their brand across the oceans, giving more people the ability to experience their goods and services. All that limits us is our own capacity to think beyond borders."

Cyberbacker provides world-class administrative support services from and to anywhere in the world, helping businesses connect with a huge pool of qualified talent and find the ideal candidate for whatever position they need to fill. As Cyberbacker has extended its brand through franchising, it has learned many of the unique challenges posed by international franchising.

The benefits of international franchising

There are many benefits to both domestic and international franchising that have inspired a wide range of businesses to leverage it as a model for growth. These include the ability to launch new locations with less capital, lower the demands in the area of day-to-day operations, and assume less liability when compared with operating a non-franchise location.

International franchising provides additional benefits over the domestic variety in that it often offers brands the opportunity to move into markets that are less saturated than domestic ones. It also provides brands with a partner the international franchisee who has intimate knowledge of the local culture and business environment, as well as a vested interest in succeeding in the new location.

"Cultural differences are by far the hardest hurdle to overcome when expanding internationally," Jason says. "People are all wired differently and culture plays a big part in defining that wiring. We all approach situations differently, especially during times of stress. Understanding the culture is paramount to have a successful international franchising program. If you are unable to be a humble seeker and enjoy what other cultures have to offer, international growth may not be for you."

The pitfalls of international franchising

As Jason explains, translating your brand, values, and work model into a new culture is one of the challenges of international franchising. Others include legal considerations that are often related to contract negotiations and intellectual property rights.

"Selecting the right legal team to guide you in the process is an important step in international franchising," Jason advises. "Make the investment to protect yourself and your company as much as you can. Working with a trusted franchise attorney who understands international growth can also help guide you along the way, and help you to gauge when it is time to hire for expansion and who is the best candidate."

Keys to succeeding at international franchising

One of the most important things to keep in mind when wading into international franchising is that you are entering into a type of partnership. Success will depend on finding and committing to support a franchisee who wants to see your brand succeed.

Once the right franchisee is found, the franchising company moves into a mentoring role, providing the vision that is necessary to carry out the brand's mission. Imparting brand values to franchisees can be one of the biggest challenges businesses face.

The franchising company also must clearly define the roles each party will play. What support resources will it provide? What, if anything, will those resources cost the franchisee? What will the franchisee be expected to accomplish on its own?

"We take on the hardest part out of the process for our franchisees," Jason says. "We focus on the people, products, services, and training, which allows our franchisees to focus on networking. We believe we help the franchise owners fulfill their greatest potential by offering them virtual help and support. We even go as far as providing a support team for each franchisee so that they are not left to do it alone."

As the business relationship progresses, it will ideally become a partnership in which mutual learning occurs. Franchisors continue to guide franchisees on the core elements of the business, while franchisees guide the parent company on how to effectively engage with the local culture.

"A win-win scenario is key to a great international rollout," Jason says. "Choose the right partner, value that partnership, and employ a process in which everyone can benefit from success. Accomplishing that goes a long way toward establishing your company internationally."