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Why now is the time to go international with your franchise

Written by Farrah Rose on Thursday, 04 March 2021. Posted in International

For many brands, international expansion has been put on hold over the past 12 months. However, now is the time for businesses to weigh up the benefits of entering markets where COVID-19 is under better control.

Why now is the time to go international with your franchise

Farrah Rose, Head of International Development at The Franchising Centre, has 37 years’ experience helping businesses grow globally through franchising. Typically visiting around 26 countries for her franchise consultancy work and travelling tens of thousands of miles in an average year, Farrah’s way of doing business has had to alter dramatically due to COVID-19. However, technology has enabled her to streamline communication and provide a more supportive service to clients than ever before - without even leaving the comfort of her home office. Farrah believes now is the perfect time for franchise brands to look at expanding internationally…

For many brands, international expansion has been put on hold over the past 12 months. However, now is the time for businesses to weigh up the benefits of entering markets where COVID-19 is under better control. Brands that look to get ahead of the curve and take action now could see immediate growth, especially where their products and services provide solutions to COVID-19 challenges and there’s little competition in new markets. So, here are my top five reasons why now is the perfect time for your franchise to expand overseas.

1. Franchising is more appealing than ever to prospects

2020 was very much a year for job losses. In fact, the most recent ONS statistics show that there are currently 1.72 million unemployed people in the UK alone, up 418,000 on the same period the previous year1. With other countries across the globe following this trend of unemployment, an increasing number of people are looking to start their own business or considering ways to generate a stable income. 

However, because new business start-ups have a far higher failure rate than buying a franchise, there’s no surprise that people are more eager than ever to invest in a proven business model. Franchising’s flexibility and potential for a steady income is an incredibly attractive proposition for prospective franchisees who are eager to invest their redundancy pay and take back control of their lives.  

Companies that franchise in new countries now will expose themselves to a huge, and expanding, market of potential franchisees with an excellent work ethic and good business acumen. On the flip side, franchises looking to expand internationally will be an attractive proposition for these potential franchisees searching for businesses who have proven they can step up to the mark and power on through when times get tough. 

2. Franchise brands have proven their adaptability

Many franchises have adapted over the past 12 months by providing services and products online. Using almost 100% online service provision and product retailing is a new route to market for many franchise brands, something that franchisors had not fully exploited before. By providing more accessible online services, franchises expanding internationally have the potential to grow a larger global customer base, which can be harnessed by local franchisees.

When setting up a franchise in any new country, franchisors map the places where there is a large potential demand for their services so that franchisees have the capacity to build a profitable business, which ultimately means that certain areas with less demand may not have a territory allocated. With more online provision, franchisees can gain customers in those areas that may have previously lost out.

 3. Businesses must spread their risk 

COVID-19 has made managing a business increasingly difficult, so spreading the risk in this ever-changing economic landscape has become vital to increasing the chances of success. For many, international franchising could be the answer. 

Businesses in the UK, which are suffering the backlash of Brexit and COVID-19, will undeniably be feeling a strain on the way they operate. They face challenges such as a rising cost of goods, an exodus of European workers causing staffing costs to rise, and reduced disposable income for consumers. Because of this, there’s little surprise that many businesses don’t want to rely on putting all their eggs in the UK basket. Franchising in international markets can reduce these businesses’ dependence on the potentially unstable market they’re already established in. 

Through international expansion, businesses spread their risk in a number of ways. By exposing them to new markets, it increases the franchise’s customer base and brand awareness. Businesses can also benefit from favourable regulations in other countries, protecting themselves against the risk of weakening domestic markets and significantly expanding their overall growth potential.

4. Franchises can cross borders with technology

Before the pandemic, businesses were lucky to have face-to-face contact with their international franchisees five or six times a year. Now, thanks to technology and with working remotely being so well accepted, the ability to start up, communicate with and manage new franchisees has been made easier than ever before.

When running a franchise, there are always two things you wish you had more of: time and money. The forced adoption of technology like Zoom into everyday life over the last 12 months allows you more of both by giving you the option to talk with franchise professionals and potential franchisees at the click of a button, saving you thousands of pounds in travelling costs. Webchat services also allow franchisors to provide a more superior and streamlined support service to their franchisees in other countries. A franchisor can now deliver training online and converse with franchisees face-to-face on a more regular, albeit virtual, basis. 

It’s true that you need substantial in-country research and data before you commit to taking your franchise brand into a new market. I’ve regularly travelled all over the world to conduct this type of research for clients. Whilst I may not be able to make it out to other countries for on-the-ground research, technology allows me to communicate with experienced franchise professionals in-country who are available to do that initial market research for you. For instance, TFC has franchise associates in 123 countries who can advise you on locations best suited to your business. So, by taking advantage of the technology available, the options for you to research new markets are wide open.

5. Real estate has become more available  

Due to the shakeup of commercial property in the majority of countries, resulting from a COVID-19-led recession, there’s a glut of real estate available for unit-based franchises. So, now is the time to take advantage of the real estate opportunities in other countries where the pandemic has caused property to open up and prices to drop. 

Finding affordable locations for franchisees to launch can often be the first stumbling block when entering new markets. Now is the time to take advantage of your buying power as a franchise brand. For brands that use sterling or dollars, you may find a strengthened position to buy or negotiate the leasing of real estate in countries where the currency has weakened significantly since the pandemic began.

As markets begin to open back up, it’s clear that international travel will take a little more time to resume. For franchisors who take this time as an opportunity to forge ahead rather than putting expansion on the back burner, you’ll find that fortune favours the brave.

1The Office for National Statistics, 2021, Employment in the UK: January 21

About the Author

Farrah Rose

Farrah Rose

Farrah Rose has over three decades of international franchise consultancy experience, winning the Contribution to International Franchising award at The Global Franchise Awards hosted at the IFA Convention 2020 in Florida. She drives the international expansion of The Franchising Centre through her 73 international franchise associates covering 123 countries.

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