How can you help franchisees overcome financial challenges when expanding internationally?

International development can be very rewarding but there are certainly risks as well. To mitigate those risks and have a higher probability of success requires: 1. As the franchisor ensure the market(s) you are targeting are a good fit for your brand and products. Also, think of overall business friendliness both to you and your future franchisees. 2. Ensure you are signing highly qualified franchisees both financially and operationally. 3. Have a solid training and support system in place to ensure franchisees are executing to brand standards. 4. While you may have a targeted fee structure, having some flexibility based on local economics and costs is advisable. 5. Ensure that locations are absolutely OPTIMAL.

Franchises that ‘Go Global’ Successfully have these Qualities: (1) Solid senior management commitment and a pro-active plan for carefully selecting countries to develop, (2) Clear differentiation from what is already in other countries, (3) A profile of their best licensee candidate, (4) A record of success in their country, (5) Strong unit franchise earnings results at home, (6) Consistent unit growth with few, if any, closures, (7) Trademarks and URLs in high priority countries, (8) Strong training, support, marketing, technology and Intranet resources, and (9) A financial model that offers international licensees the potential for a good return on their investment

As a certified public accountant (CPA) with expertise in finance and compliance, I guess, we (CPAs) can assist the franchisee in Market research and analysis Including currency fluctuations and exchange rate management, tax implications, meeting financial regulations, and reporting requirements. Also, the identification of financial risks and the development of risk mitigation strategies should be key points to consider when expanding internationally.

Identification of financial rules associated to any market along with understanding local rules allow you to ascertain risks and the development of risk mitigation and management strategies, and these should be key points to consider when expanding internationally.

There are different ways to expand your franchise on an international basis. These include direct franchising, master franchising, the creation of joint ventures targeting specific associates that offer strategic opportunities in any selected market , or company-owned outlets, depending upon the reach that a physical presence may offer Each option has its own advantages and disadvantages, depending on your goals, resources, and risks. Look at all options with focus on your desired results from said expansion.

One of the most important aspects of expanding your franchise internationally is setting the right franchise fees and royalties. These payments that franchisees make to you in exchange for using your brand, system, and support, must be created to encompass new markets and local trends and objectives. You need to balance the interests of both parties and ensure that the fees and royalties are fair, competitive, and sustainable to ensure a longterm viability.

Pay strict attention to local market trends. Dont be afraid to make changes if you get something incorrect. Local market expansion can be difficult so make sure your local team includes members with proven and noted experience in both the market and similar sectors