The Golden Key
Getting started with the Global Franchise Team is as easy as reaching out to your nearby U.S. Commercial Service.
By Eric Johnson, CFE
When franchise companies explore taking their franchise systems international, many questions arise. One immediate question surrounds what resources exist that can be utilized for assistance and determining market selection and next steps. Another question is likely, “Where do I find credible prospects and targets?”
Countless questions will be faced by franchisors and their development teams, and a first step in this process should be acquainting your team with the Global Franchising Team of the U.S. Commercial Service. This is an important first step since 95 percent of the world’s consumers live outside the U.S., and 92 percent of the global economic growth will come from outside U.S. borders.
The U.S. Commercial Service division provides economic development and strategic business development expertise in franchising as a business model across industries. The Global Franchising Team is at the crux of assistance most franchisors require, and we provide an expansive footprint of domestic and international staff. The team comprises international trade specialists domestically, or account managers, to facilitate introductions, uncover research and information requests, and provide strategic direction.
Account managers are assigned to franchisors to determine their needs and guide the process with our staff, located in more than 75 countries, and into a wider region of locations through our U.S. State Department partner posts. We work with franchisors in almost every country around the world. Our staff is committed to learning the intricacies of the franchise space, and the team is expanding in knowledge with many starting to work on ICFE status. Both our domestic and international colleagues are always on the search for connections for prospecting and deals.
Many franchisors contact our organization after making the decision to export their brand and systems, or after having expanded in a few countries. Once brands begin the expansion process and have contacted any number of service providers or advisors, or the International Franchise Association, franchisors generally find their way to the Global Franchising Team. The team will explore with clients any existing leads and unique needs and spend appropriate time to learn the operation in terms of set-up, core offerings, success factors, and growth needs. The domestic team should be considered part of your brand ambassadors and should be able to articulate value propositions that resonate with our staff abroad as we contact them to align assistance, and with the variety of investors and providers that reach out to us.
Your account manager will be integral to help you align matching services and watch for prospects, insights and cues. Account managers also assist in a variety of counselling issues from registering brands in the expansion country; sorting supply-chain and cold-storage availability; understanding tariffs and impact on propriety system equipment or products; and among others, refining core product offerings to a different culture.
The Global Franchising Team looks at additional ways to provide research and market modeling to streamline expansion plans, supplemented with our events and trade missions. One of the team’s recent research products is the January 2018 Global Franchising Resource Guide, a publication profiling economic indicators of 39 countries open to franchise systems.
“92 percent of the global economic growth will come from outside U.S. borders.”
Gold Key Matchmaking
Our team has long been known to promote and complete Gold Key Matchmaking programs to introduce a series of franchisees, conglomerates, and investors. We continue to provide this service, along with a newer market assessment product, an Initial Market Check, and the popular due diligence product, the International Company Profile. And we offer Group Gold Keys and Trade Missions that align with the goals of our core clients and the IFA membership.
Annually our team seeks to offer research, service and events that will move franchise brands closer to their next international contacts for signing of deal and opening of units. Our team fields questions on how long expansion takes in each country. Franchising is a complex process, and there are no guidelines on timeframes to market. Market reality surrounds a very involved process with many moving parts requiring alignment. Determining the right approach, concentrated prospecting, appropriate visits to market, and making certain that the correct partner is vetted, selected and supported in-country goes a long way toward success in a new market.
Servicing franchise operators effectively requires effective communication, information, and marketing materials from clients. Franchise systems must present clear understanding of core values, and some flexibility on likely market customization. Franchisors should provide well-defined descriptions of likely candidates and industry alignment, capitalization, and appropriateness of fit in a franchise system. Our team needs a full understanding of past relationships to facilitate market re-entry or replacement partners as we will be asked why past relationships failed.
Partner and brand reappointments may take a longer-term horizon. Beyond re-entries, in some countries, you need to be prepared to search for a partner that is outside of densely populated and competitive central business districts. Franchisors should wait for the right candidate and timing, as an area developer that cannot perform their development schedule will not achieve awareness needed for longer term profitability.
“The domestic team should be considered part of your brand ambassadors.”
Franchisors should also know about our assistance provided annually during the IFA Annual Convention, and at the International Franchise Expo. A trade activator program called “Global Chat” is conducted at these premiere industry events, with trade counseling provided to franchisors on their brands and systems for market acceptance and approaches.
Franchisors receive the advance opportunity to register to meet with our commercial specialists to explore their unique situation and needs in expansion. Importantly our commercial specialist may even be able to introduce you to potential candidates.
Getting started with the Global Franchise Team is as easy as reaching out to an account manager in your nearby U.S. Commercial Service. If you do not currently have a domestic account manager, contact me, Eric Johnson, Global Franchising Team Leader, for the next steps. Team members look forward to sharing more plans available on the horizon, and if we are not familiar with your system currently, we look forward to seeing new innovations and brands to help introduce globally.
W. Eric Johnson, CFE, serves as Global Team Leader for Franchise Programs for the U.S. Export Assistance Center in Atlanta. He has been a part of the international trade and investment promotion arena for 20 years, and has consulted multi-unit chain and beverage organizations on menu conceptualization and wine programs.