CEO Consulting helps franchisors grow their franchise in overseas markets.
Our clients include Australian franchises and licensed businesses expanding to Asia, Europe and the US. We also represent international brands entering the Australian market.
What works in Australia does not always work overseas and what works overseas does not always work in Australia. Localising your offering and business model is an important success factor for international expansion.
Getting it right can add enormous leverage and value for your business. Getting it wrong is not only a missed opportunity but may cost you financially with bad deals, inflexible arrangements or legal disputes.
EXPANDING YOUR FRANCHISE OVERSEAS
Franchisors often get excited and see big dollars and new frontiers by entering international markets.
Often it is triggered by an enquiry from overseas saying “ I recently visited Australia and saw your franchise. I would like to acquire the rights to bring it to my country…”. The challenge then becomes whether you can accommodate and support an overseas operation without it affecting your core local business. Many franchisors make 2 common mistakes here:
- They chase the money at a time when they are not ready to expand and the deal falls apart after a short while; &
- They fail to understand the peculiarities of that new market and do not localise their product or offer to meet customer tastes or buying habits – they simply “cut & paste” their Australian offer into a foreign market. (The same often happens in reverse for international franchises entering the Australian market)
A better approach is to plan for international expansion:
- Research & prioritise your markets for expansion
- Develop a war chest – make sure you have specific expansion funding
- Profile & carefully select your overseas Master or partners
- Explore localisation strategies to adapt to new conditions
- Actively monitor & manage – put a trusted team member on the ground
- Recognise that different laws and taxation rules apply
- Do not let partners develop systems or intellectual property outside the model
EXPANDING YOUR FRANCHISE WITHIN AUSTRALIA
Some types of businesses are easier to run across multiple States than others.
A key consideration is the support structure you will need to underpin your network in those new markets and also any marketing to create brand awareness.
It is important to have sufficient resources to support expansion. If you do not, either wait until you do or consider other models such as a Master Franchise or Area Development Agreement. It is common for east coast based franchises to operate via Master Franchisees in WA or SA and vice versa.
Consider the travel and visitation implications and whether the reward for effort equation is strong enough.
Sometimes establishing a company owned store or territory is used as a new market entry strategy to test the market and establish a beachhead presence before franchises are sold. There are multiple ways you can grow your footprint into new areas but it is worth carefully considering the implications and exit strategies if it doesn’t work or becomes a drain on resources for your core markets.
CEO Consulting has substantial experience assisting Australian franchisors develop and execute strategies to expand interstate and overseas. We also help international Franchisors enter the Australian market.