Today the best way for business expansion is transforming it into a franchisee. Franchisee allows businesses to grow its roots and break the geographical boundaries. Brands with decades of success story were the ones that started franchisee with the view to reach untapped markets for achieving potential growth. But during the past couple of years as franchising has become a popular business model, the international growth strategy has been rising.
Through franchising, a business can grow but it still has dependency on local markets where international franchising gets a face to the brand at global market. The concept of international franchise shows the franchising industry’s tremendous potential also provide opportunities for new and existing small franchisees that are looking for expansion options.
There are several advantages of international franchising but all depend on the company’s franchise market, brand scope and service/product requirement that should attractive enough to catch the target audiences’ attention.
Advantages
- Exposure to New Markets
International franchising is the best way to get the international exposure and increase your reach at global scale that could not possible before. Most of the franchisees fail due to the market saturation or lethal competition however entering overseas market that isn’t saturated and offers growth for long term will be a greater opportunity to get hold on.
- Favorable Regulations
The most common issue while taking business to overseas is rules and regulations in that foreign markets operate. Franchising allows one to choose the country where market availability and government policies are favorable. The benefits can be many as lower taxes, supporting policies and high consumer availability.
Disadvantages
Compliance Challenges
Every country has its own culture and cultural diversity also effects propels choices. Sometimes in a country there are different rules and regulation and can be vary significantly differ between countries, provinces, and states.
Financial Risk
Moving business to another country is in itself a great risk. The chances of success are decreases as the success factors are different such as geographical changes, demand ratio, currency rates, transportation unavailability and high tariffs on supply. These factors could make business less profitable even it is going good.
International franchisee is a rising trend. Today, the International Franchise Association represents more than 1,300 franchisors, that include 10,000 franchisees and beyond 600 professionals and suppliers to the industry.
The industry offers the opportunity to max out brand territory brand and take organization to continue growth. But the speedy growth of franchising industry did not come without challenges.
