International Franchise Business Plan

International Franchise Business Plan

As your one point contact we also help you with all possible documentation. The importance of a business plan is not country specific. Wherever you decide to do business you will need a strong foundation in the form of this plan. This is the master plan on which the phased expansion of the brand is based. It involves all the necessary requisites for the brand to go global and ensures that it covers all aspects of being completely prepared to conduct business in foreign territory. It begins with resource planning, covers structuring the master franchise correctly, defining the roles and responsibilities of the incoming franchises and ends with the measurement of compliances. While there is elaborate work that goes into each of these areas, we would like to elaborate a few of them for your better understanding.

These are a few points covered when structuring a master franchise for any global market:

  • Franchise Structure: Country Master Vs Sub-franchise vs. Area Rep
  • Territory size should correspond to number of units to be opened.
  • Require that chosen franchisee open showcase and training unit(s) before selling franchises.
  • Development schedules to ensure short term and long term goals are set and to pre-empt competition.
  • Initial term should coincide with or extend just beyond the development schedule.
  • Allow franchisees that complete development schedule on time to renew for one or more additional terms, but retain the right to require establishment of additional franchises during any renewal term as a condition of renewal
  • If area Rep fails to comply or renew, franchisor may take over the area or appoint a new rep to manage the area.
  • Duties of a franchisee may include but not be limited to:
    • Contributing to Franchisor’s Franchise lead generation activities, such as advertising on the Web and national publications, preparing videos, and printing brochures, generating additional franchise sales leads,
    • Qualifying these leads,
    • Following up with qualified leads until ready to sign,
    • Filling in blanks in documents for franchisor and franchisees to sign after the appropriate cooling-off periods,
    • Training new franchisees at showcase unit,
    • Assisting new franchisees with opening of new units,
    • Periodically visiting with franchisees in area,
    • Coordinating marketing, testing, and introduction of new products within area,
    • Conducting refresher training,
    • Training new managers for franchisees when necessary,
    • Reporting to franchisor on franchisee compliance and recommending termination, if appropriate, etc.
    • Duties of the franchisor may include:
    • Coordinating internet and multi-territory marketing for franchise sales leads,
    • Providing lead generation and sales tools,
    • Turning over “local” leads to franchisees,
    • Training in franchise marketing and sales,
    • Training the franchisee in training, assisting, and supervising franchisees,
    • Coordinating system-wide product marketing measures,
    • Providing area rep with new developments to be introduced to the market,
    • Conducting annual franchise meets, etc.
    • Typical transfer and right of first refusal provisions should be included.
    • Typical default provisions should be included.
    • Typical choice of law and venue provisions should be included.
    • Typical confidentiality and non-compete provisions should be included.

Hence it is imperative that the franchisor understands the challenges in working in a global scenario and does the required homework before stepping out to ensure that the business is scaled up aptly and takes in the right master franchises.