IESE Business School Professor and Franchise Worldlink Philippines guest on the Economic Briefing of La Camara

La Cámara Oficial de Comercio de España en Filipinas (Spanish Chamber of Commerce in the Philippines) will have as guest speakers IESE Business School Professor Mike Rosenberg and the Franchise Worldlink Philippines team this coming 6th of September 2019 in Makati City, Metro Manila, Philippines. The session will be in the residence of the Spanish Ambassador to the Philippines.

Professor Rosenberg will present and provide a strategic framework that can help business executives address the challenges of globalization in this evolving geopolitical landscape. He will discuss current geopolitical issues that may cause success or failure in different markets, explore strategies for dealing with global and local complexity, and introduce innovative ideas on recruitment and organization.

Mike Rosenberg is an Associate Professor in the Strategic Management Department of IESE Business School. He began teaching part time in the MBA and Global Executive programs in 1999 and joined the faculty on a full time basis in 2003.

Professor Rosenberg lectures in IESE’s MBA and Executive Education programs where he teaches strategy, geo-politics, and sustainability and publishes a weekly blog on these topics
under the title Doing Business on the Earth. Professor Rosenberg is a member of the Steering Committee of Franchise World Link.

The Sep 6 session will be exclusively for the members of La Camara. La Camara is celebrating its120th anniversary in the Philippines. Since its establishment, the objective of the Chamber is to increase business opportunities among its members and perpetuate the commercial and economic ties that have existed for centuries between Spain and the Philippines.

Franchise Worldlink Philippines is a member of the Spanish Chamber of Commerce in the Philippines, connecting International franchised brands from Spain to Filipino investors. Franchise Worldlink has 17 country offices spanning 50 countries in Europe, Asia, Africa, Middle East and the Americas.

Aside from the event with La Camara, Professor Rosenberg will also facilitate a case presentation for prospective IESE students and will hold a learning session of IESE Alumni on September 7, 2019. Aimee Flordeliza and Cesca de Leon are alumni of IESE Business School.

IESE Business School is the business school of the University of Navarra in Spain, with its main campus in Barcelona. IESE is currently celebrating its 60th year. IESE also has campuses in Madrid, New York City, Munich and Sao Paulo. The school offers both degree and executive education programs for individuals in different career stages coming from all over the globe.

The internationalization of franchising companies is really booming. We are witnessing a new revolution driven mainly by globalization and new technologies. More and more franchisors are studying the different options in order to develop the business through International Master Franchise Licences. Franchise world link’s mission is to help these franchisers precisely. Olivier Guerrero, CEO of the company, agrees to deliver the 3 keys steps before going international.

©Franchise World Link, all rights reserved, May 2019.

Strong willingness to develop your business as an international master franchise.

Don’t start anywhere, no matter how!

In fact, the adaptation of a franchise concept in another part of the world is not really easy. After the indispensable market research or a market analysis alongside with a country visit, and once the countries are targeted, the company must agree on an international development strategy. Some franchisors will simply seize a few opportunities in various foreign countries. And this is fine for the beginning and for the short term; it is what we call internally “Managing Opportunities” many Franchisors at the beginning have been growing internationally that way in the past decades.

But, in truth, an international expansion plan is a necessary strategy for the success of the project! Franchise World Link’s finding is overwhelming: many franchisors are trying to establish themselves everywhere without any prior strategic thinking… Going everywhere and too fast, can create a multitude of problems of internal management at the franchisor headquarters: this type of approach can, in no way be a strategy for the long term.

The International development of your franchise: 2 schools.

The setting up of an international franchise network should be organized step by step. A real strategic pan and reflection on the quality of the partners you identify or that will be presented to you at an early stage is necessary. If you are already a regional franchisor and you are already located in some neighboring countries, then it will be easier to define the next region / continent you want to target.

It is noted that 2 schools of thought in international franchise development coexist:

The first school favours expansion in geographically and culturally closes countries.

The second view is that speaking the same language is the decisive criteria for the choice of countries. French companies entering French Speaking Africa or Spanish companies entering Latin America is a common example.

First of all, it is essential to analyze whether your business concept is free of duty. You need to identify in which country you could quickly be successful and what adaptations would be necessary to attract master franchisees from that country. For the company, the imperative need to rethink its strategy is a major challenge. This strategy must also be shared with shareholders and be non-restrictive. It also requires to be entrusted exclusively to the Director of international expansion or to its CEO. Ideally, at startup a small, culturally open team with international experience is needed. You must also plan a development budget and prepare a coherent “master” financial model.

Having a good Franchise legal adviser

 Having a good legal adviser is very important. In your home country, your legal department must be familiar with foreign countries. In the targeted country, you need a good specialist to check the master franchise contract. Each country is very different and the master franchise contract needs to be examined at the local level, in accordance with local laws and regulations. Then, the pilot test process, as well as pre-contractual information documents may vary from one country to another. In order for the chosen investor to operate, some countries require government authorization to be recognized as master franchisee. In addition, a pilot will be required before the master is allowed to market unit franchises. In some countries the Disclosure Document is required (Mainly USA and Europe) in some other countries it is not necessary (Africa and some Asian Countries), as the franchise laws are not applying and all contracts relies on commercial laws.

Nevertheless having a good Franchise lawyer is important, but is not everything. As a Franchisor you should be able to guide the franchise lawyer in what you want to achieve abroad in line with your strategy.

Too many franchisors that have been successful in their home countries tend to consider the world as a Global market. There are many various options that could be adapted, such as considering Licensing agreements in some countries or other hybrid systems that could adapt to the new country or the new continent.

Financial Modeling, accounting, reporting and controlling.

Reporting and controlling is essential.

The Financial model should be carefully prepared and monitor in line with the Legal targets reflected in the Master Franchise Agreement. (MFA).

The financial model should include all incomes such as Entry Fees, Royalties, and Marketing Fees.

Accounting would be done by the Master Franchisee and reviewed by an extralegal Auditor; this should be clearly specified in the MFA.

In fact the reporting and the control methodology should be clearly mentioned in the MFA, including targets in terms of sales and Key Performance Indicators.

The franchisor headquarters should have a dedicated manager following and monitoring carefully, each country or each area, with regular contacts and regular visits on the field.

Auditing.

Throughout the duration of any Franchise Agreement, the Master Franchisee should allow the Franchisor to electronically control sales and/or, to enter the premises used by the Master Franchisee during the trading hours, to carry out any inspections or audits of the Master Franchise as the Franchisor reasonably requires.

The Master Franchisee could conduct inspections of all the sub-franchisees in the Territory, and of its operations, in accordance with the standards from time to time established by the Franchisor in the MFA. The Master Franchisee shall provide all reports to the Franchisor with respect to the findings of such inspections, in such form and at such times as Franchisor shall require.

Another way to control the Master or the Unit Franchisees in through an integrated CRM and a cash control IT software tool (There are many available in the market), where the franchisor could have access to all the daily data.

Increase the value of the franchisor.

As for the financial aspect, an international expansion has its own costs, but will positively affect the valuation of the franchisor’s comapny. Being part of an international franchise network will greatly stimulate people internally and franchisees globally.

Olivier Guerrero – CEO franchise world link.

 

I. INTRODUCTION

As population growth decelerates or stagnates around the world, Africa will double its population in the next 30 years.

Indeed, according to a study did by INED in partnership with the French Development Agency entitled “All countries of the world”, the continent’s population will grow from 1.2 billion inhabitants in 2017 to 2.5 billion inhabitants in 2030.
Better still, this population is expected to quadruple to 4.4 billion inhabitants in 2100, or nearly 40% of the world’s population.

This demographic change will be accompanied by exponential economic growth. According to the American think-tank Brooking Institution, the consumption of African households will more than double in the next 15 years, from $ 1,100 billion in 2015 to $ 2,500 billion in 2030, and business-to-business (B2B) spending should almost triple over the same period, from $ 1600 billion in 2015 to more than $ 4200 billion in 2030.

In addition, several international organizations including the United Nations Population Fund (UNFPA), the sub-Saharan Africa, will achieve a “demographic dividend” of about $ 500 billion a year over a period of at least 30 years.

NB: The demographic dividend is economic growth derived from the change in the age structure of a population, with the decline in dependents (children and seniors) and the increase in working-age adults.

2. BACKGROUND

The demographic boom of Africa which favors in a virtuous circle: the emergence of an educated middle class, the take-off of household consumption, the intensification of the exchanges between companies, place the continent in the radars of the international investors who see it as a territory full of opportunities.

FRANCHISING AND LICENSING is viewed as a major leverage of economic development.

CHARACTERISTICS IN CENTRAL AFRICA AND WEST

1) Legal framework

In order to harmonize business laws in Central and West Africa, the OHADA (Organization for the Harmonization of African Business Rights) was created.
This organization has harmonized the rules by adopting uniform acts on others, commercial law.
On the other hand, the OHADA did not specifically refer to franchise or license cases. There is no uniform act on franchising or Licensing.

Therefore Franchising and Licensing laws in Central and West Africa will therefore be subject to the common law of business.

2) Regulatory Framework

When developing of a network of Franchises or Licenses in Central and West Africa, it will be necessary to be vigilant regarding:
– The specific rules for cross-border relations, in particular customs regulations,
– Rules relating to competition law, particularly those put in place by the Economic Community of Central African States (ECCAS) and the West African Economic and Monetary Union (UEMOA)

I- OUR TARGETS OF INVESTORS

The investor’s profiles relevant for the development of Master Franchise or Master Licenses in Africa are the following:

1) Entrepreneurs already present in a sector of activity/ industry connected directly or indirectly with the Franchisor and the Licensor and wishing to increase their turnover
They will benefit from the notoriety brought by the Franchisor or the Licensor to capture new customers and new markets.

2) Large investor families wishing to create other sources of income:

3) Senior managers who want to start their own business
Through Franchising or Licensing they will invest in a profitable business in the medium term and generate immediate income.

4) Investors looking to diversify their business to cope with business downturns.

Given the development of franchising in Europe, the international opening of the African economy, the historical link between France and French-speaking Africa, and especially the novelty of this economic model on the continent, we believe that Africa is an excellent opportunity for franchisors.

CENTRAL AFRICA : CAMEROON

CAMEROON
Location: Gulf of Guinea. Borded by Atlantic Ocean. His neighbor is Nigeria
Population: 25 million
Languages: French & English
Currency: XAF. $1= 500 XAF
GDP: 81 billion dollars- GDP/cap: $ 3400 ( World Bank 2017)
GDP by sector: Agriculture (22%); Industry (30%); Services (48%)
Average annual growth: 5% – 9%
Main industries: Oil, Aluminium, Wood, Foof industry, Shipyard, etc

CENTRAL AFRICA : DEMOCRATIC REPUBLIC OF CONGO

DEMOCRATIC REPUBLIC OF CONGO ( Former ZAIRE)
Location: Congo Basin. His neighbors are Angola, Rwanda
Population: 81 million
Area: 2,345 KM2; 11th of the world
Currency: Congolese Franc ( CDF); $1= 1652 CDF
GDP: 68 billion dollars – GDP/ cap: 800 dollars
GDP by sector: Agriculture (32%); Industry (26%); Services ( 34%)
Average annual groth: 5%-8%
Well exported: Diamant, Gold, Copper, Uranium, Oil, Manganese, Coal

WEST AFRICA : IVORY COAST

IVORY COAST
Location: African West Coast. Borded by Atlantic Ocean.
Population: 24 million
Languages: French
Currency: XOF; $1= 500 XOF
GDP: 96 billion dollars – GDP/cap: $ 3900 ( World Bank 2017)
GDP by sector: Agriculture (27%); Industry (18%); Services (55%)
Average annual growth: 7% – 10%
Main industries: Cocoa, Oil, Wood, Cocoa, Foodstuffs,Fertilizer, etc

WEST AFRICA : SENEGAL

SENEGAL
Location: African West Coast. Borded by Atlantic Ocean.
Population: 15 million
Languages: French
Currency: XOF; $1= 500 XOF
GDP: 45 billion dollars – GDP/cap: $ 2800 ( World Bank 2017)
GDP by sector: Agriculture (17%); Industry (23%); Services (59%)
Average annual growth: 5% – 8%
Main industries: Phosphate, Oil, Foodstuffs, Fertilizer, Food industry, etc

With its established world-wide network, FWL is now helping international brand owners access the Singapore & Indonesia markets and also offering access to 30+ global markets for successful home-grown brands from Singapore & Indonesia

Franchise World Link (FWL) announces the launch of its services in Singapore & Indonesia. With franchising and licensing maturing as a strategy for business expansion in Asia, FWL will extend their established global network to key Asian markets of Singapore & Indonesia.

The company will play a major role in helping Singaporean and Indonesian owned franchise businesses enter 30+ international markets. The company will also assist global brand owners and franchisors in accessing the dynamic and fast-growing markets of Singapore & Indonesia by identifying suitable partners and investors.

FWL connects all players in the global franchise market: individual entrepreneurs, start-ups, investors, franchisees and brand owners. The company’s mission is to create “win-win” for both franchisors and investors/business operators in key markets around the world. The company works with franchisors from around 10 industry sectors across 30+ countries under the leadership of its CEO Olivier Guerrero, a French businessman with more than 25 years of experience in the franchising industry as a business operator and owner.

“Whether you are a successful, home grown Asian business planning to enter overseas markets or a global franchisor wanting to access the dynamic Singapore and Indonesia markets, Franchise World Link will be delighted to work with you to meet your international expansion goals” said Alankar Joshi, Director for Singapore and Indonesia, while making the new announcement.

For more information, please contact:

Alankar Joshi

email: alankar.joshi@franchiseworldlink.com           mobile: +65 85113848

Visit the website at: www.franchiseworldlink.com

Franchise World Link at The Twelfth International Conference on Digital Society and e-Governments

We are delighted to announce that Amirhossein Roshanzamir the director of Franchise World Link Regional Office in the Middle East has published a new paper titled “ Dilemmas of Branding for Start-ups” at The Twelfth International Conference on Digital Society and e-Governments – ICDS 2018 in Rome, Italy.

IARIA

Amir discusses the opportunities and challenges which start-ups face in building up their brands in the digital era and suggests a three stages modular and incremental approach to build a start-up’s brand from scratch. The copy of the paper can be downloaded from below link :

http://www.thinkmind.org/index.php?view=article&articleid=icds_2018_4_10_10044

At Franchise World Link we believe reputation and brand are the most important financial assets of any franchise business model. We are also keen on working and supporting start-ups, especially in the emerging markets since we consider them to be the engines of growth for addressing local problems through creative technologies and innovative solutions.

We congratulate Amir on publishing this research and looking forward to supporting and helping start-ups in the emerging markets where we are operating.

Please contact us for more information, if you are a start-up who wish to grow or a company who plan to expand globally through franchise or license model.

 

Franchise World Link participates in the First International Franchise Expo in Casablanca, Morocco

We are pleased to announce that the Franchise World Link, with 16 offices in the World and present in more than 40 countries, specialized in helping investors to find international Franchise brands, will be present at the International Franchise Expo to be held in Casablanca, 13th and 14th of April 2018 at the Hyatt Hotel.

Lamyae Belqadi, Country Manager Morocco based in Casablanca, commented “We are a growing country for Franchise and Morocco is an entry gate for Africa, our CEO Olivier Guerrero will be present in Casablanca during the event”

For more information please contact us: Lamyae Belqadi, Country Manager Morocco, Franchise World Link, lamyae.belqadi@franchiseworldlink.com, Tel: + 212 619 39 83 79, Fax: + 212 522 98 69 06, www.franchiseworldlink.com

Colombia is the second exporter of flower species, the third largest coffee producer in the world, the first in Latin American coal reserves and in the first in production of emeralds in the world, and now, that peace has arrived in this country, the quality of life is improving, entrepreneurship is being encouraged, small and medium enterprises are projected to grow in small cities, and the country has already begun to grow in industrial, social and cultural terms, demonstrating that there is a little left of the image of war that it has had.

Colombia in economic terms

In 2016 during the peace process, according to figures from “La Revista Dinero” in its digital version, the construction sector grew 4.1% and obtained more than 1 trillion Colombian pesos (330 Billion USD) in profits and the manufacturing industry and financial institutions registered profits of just over 2 billion Colombian pesos (660 Million USD), and according to data released by the Banco de la República, FDI in the country grew 15.8% over the previous year, transport, agriculture and manufacturing surpassed the investment in 32%, also it is interesting the 122% increase in the electricity sector and 46.5% in communal services, and that Bogota, the Colombian capital, was positioned as the third city in Latin America that more generated direct jobs (approximately 5,000); confirming that Colombia is one of the most economically stable countries in Latin America.

Today, estimates predict that foreign investment will triple annually and reach USD 36 billion, compared to the USD 12 billion that come today. According to a DNP (National Planning Department) study, per capita income for Colombians would double in a decade from USD $ 6800 to USD $ 12,000, and economic growth of 1.1% and 1.9% annually, which means that in the coming years there will be a rebound in the sectors of construction, agriculture, tourism and industrial.

Figures released by the Banco de la República show that FDI in January of 2017 grew more than nine times compared to the same month in 2016, and between January 1 and August of 2017 FDI increased by 13, 5% compared to the balance a year ago, when it totaled 2,928 million dollars; foreign trade compared to the same quarter of 2016, in 2017 rose by 3.7%.

Status of franchises in Colombia

In the country, there are currently 443 franchises of both national and foreign origin, 47 in the beauty sector, 67 in specialist trade, 27 in training centers, 158 in food/ gastronomy (catering), 74 in fashion and 70 in the service sector.

There are 196 franchises of foreign origin that are currently established in Colombia, whose main country of origin is the United States, followed by Argentina, Brazil, Spain, Mexico, among others, in health and beauty, fashion, food/gastronomy and catering.

The franchise industry in Colombia has been booming for a couple of years, and this is mainly due to the fact that there have been various franchise projects promoted by public and private entities that have made this model known to the colombian population, in fact, the model of microfranchise for Colombia was developed thanks to an IDB project, where some colombian consulting firms developed the operational and process standardization part of that model, and it was established that microfranchises in this country would differentiate from the conventional franchises in the fact that they would not exceed an investment amount of more than 75 million pesos equivalent to USD 25,000 approximately. This amount is ideal for small and medium sizes investors. This might be an international or domestic franchise, but in other formats such as corners or small modules or mobile format unit franchises, requiring less investment.

To encourage the development of franchises in general, Franchise World Link would promote knowledge about franchising. Franchise World Link would help entrepreneurs who are interested in investing in Master franchises, Regional or Multi-Unit Franchises, and eventually creating alliances with different public and private entities.

Some cases of success of Colombian franchises
Servientrega
Created in 1982, is the leading messaging company in the country, with a presence in Ecuador, Peru, Spain, to name a few countries. Began to franchise in 1991, in this moment has more than 3,000 premises, having achieved great positioning in the country.

Totto
Created in 1987, the business idea is the design and commercialization of briefcases, accessories and clothing mainly for young people. It is one of the most successful franchises in the country, with presence in more than 40 countries, and 600 physical stores mainly in Latin America, 272 of which are located in Colombia, one of its largest projects in entering to the United States. As a franchise, it offers assistance in the area of marketing, profitability and the security of investing in a solid and recognized brand.

Sandwich Cubano
Created in 1978 by a Cuban settle in Cali, Colombia, was born as a small establishment selling sandwiches, in 1994 they opened more premises in that city, and for 1998 they granted their first franchise in Barranquilla, today they expanded their catalog of foods and also offer fast foods, salads, desserts, among others. at the moment it has 217 commercial establishments, only 9 are own and the other are franchises, also has presence in Panama and Miami.

Juan Valdez
Originated in 1950, and dedicated to the marketing of food and coffee products, it became a franchise in 2002. Currently, it has 300 stores worldwide, most located in Colombia, and in the country opens approximately 2 stores a month. Its franchises are part of the International Franchise Association (IFA), this association accredits experts in the franchise industry and endorses the services presented by the institutions belonging to that association. At the end of the first half of 2017, it invoiced more than 140,000 million pesos in Colombia.

Some cases of success of foreign franchises that have grown in Colombia
Cosechas
Franchise of Costa Rican origin, produces and sells fruit juices and vegetables in Colombia. Their key success factors are the original catalog of drinks they offer, the natural and nutritious concept, the location of their sales points and the quality of the products they work with. Arrived in Colombia in late 2012 and early 2013, invoiced 100,000 million Colombian pesos in 2016, and exceeds 500 points nationwide.

Subway
This franchise of American origin born in 1965, with a presence in 110 countries, offers sandwiches, cookies, drinks, breakfasts, among others, in some countries by cultural and religious impositions it changes its menu. In Colombia it landed in 1997; currently has 300 franchises in the national territory, and is present in 36 cities.

BodyBrite
The franchise of Spanish origin, born in 2011 and offers non-invasive aesthetic services such as laser hair removal, facial cleansing, body treatment, among others, in Colombia arrived between 2012 and 2013, and in less than a year of operation had 40 establishments, currently has more than 70 premises, and its success in the country is due to the low prices of its treatments, and the training and constant advice to its franchisees.

The future of the franchise in Colombia
For the next few years the arrival of various foreign franchises from all continents and the expansion of local franchises to other territories of the country previously unoccupied. One of the most anticipated franchises in Colombia this year was H & M, that arrived in the country in May of 2017, and expects to open more than 400 stores.

Other franchises that will arrive soon in the country, and that are partners of Franchise World Link, such as B.GOOD, of american origin, with its concept of organic and healthy fast food sees in Colombia the first destination country to enter the Latin market.

Colombia is certainly an ideal destination for all types of franchises, this type of business model came before the 90’s to stay, and to further boost the Colombian economy.

Info.colombia@franchiseworldlink.com

Sedar International, the marketing and franchising arm of Sedar Global, has entered into an exclusive agreement with Franchise World Link on June 2017 for expansion in South Africa, Mauritus and Tanzania. The kick of ceremony is scheduled on August 27th and 28th in the UAE when top management of Sedar International will meet Franchise World Link team including CEO, director of Middle East and country managers of South Africa and Morocco.
Sedar established in 1872, Sedar builds a world-class franchise concept with a unique retail experience to transform the world of retail window fashion in the eyes and hearts of consumers. Sedar successfully introduced countless designs and product concepts to the industry by having 20 showrooms across the GCC region including U.A.E, K.S.A, Bahrain, Oman and recently Egypt, Kurdistan – Iraq and Kuwait.
Sedar International providing the franchisee with non-stop support systems as Operational Support, Site Selection, Marketing Support, Procurement, Accounting, Ongoing Research and Development, Overall Program Oversight, and Global Benefits.

Sedar. Expansion to South Africa.

Shereef Abdelmalek, the International Franchise Manager of SEDAR, says that “ Sedar has developed a highly focused franchise system available in two models which is leading the global décor trends and setting the benchmark for an immersive retail experience.“ He further adds “ The agreement with Franchise World link reflects our strategy to accelerate our exposure in emerging markets and we are eager to explore the expansion opportunities in South Africa, Mauritus and Tanzania “

Sedar. Expansion to South Africa.

Being the most innovative and unique designer and supplier of curtain and wallpapers in Middle East, SEDAR has a huge potential in emerging African countries where tourism is booming. “ says the Middle East Director of Franchise World Link, Amir Hossein Roshanzamir. He further adds “ SEDAR has an amazing ERP Oracle based system which integrates several business units from design and production up to delivery and installation and this provides a unique experience from the time customers enter showroom till the order is concluded.

Sedar. Expansion to South Africa.

About Franchise World Link

Operating in more than 15 countries, Franchise World Link aims to help international franchisors and entrepreneurs to grow their business in fast developing countries of Africa and Asia, where there is a large potential for franchise business opportunities today. We liaise investors and entrepreneurs with franchisors worldwide and help investors to access the successful business and well known brands.

If you are an investor seeking for lucrative opportunities to invest in a master franchise in South Africa, you may contact Jason Thomson <jason.thomson@franchiseworldlink.com

Delifrance, the world’s leading French bakery-café-restaurant chain, has entered into an agreement with Franchise World Link on February 2017 for further expansion into the GGC (Gulf Cooperation Council).

Michel Nguyen, the Retail Franchise Director shared his views during the inauguration of Delifrance in Dubai. Delifrance is an international franchisor with over 400 outlets across 13 countries, with its most recent openings including Hong Kong and Milan”. He further stated that “We consider the Middle East as a strategic place for our future expansion and believe Franchise World Link expertise and strong network can promote French fine dining and our elegant Parisian flare in this region“.

During the inauguration ceremony Amir Hossein Roshanzamir the Middle East’s Director of Franchise World Link indicated “Franchise World Link team appreciate the confidence and trust that Delifrance has placed on us and we are delighted to contribute to the regional expansion of a renown brand like Delifrance”. Amir also added “There are ties between Delifrance and Franchise World Link since we are cooperating with them in two other countries namely Morocco and South Africa and I am sure this collaboration will only grow stronger in the near future“.

Delifrance entering Dubai

Operating in more than 15 countries, Franchise World Link aims to help international franchisors and entrepreneurs to grow their business in fast developing countries of Africa and Asia, where there is a large potential for franchise business opportunities today. We liaise investors and entrepreneurs with franchisors worldwide and help investors to access the main brands.

If you are an investor seeking for lucrative opportunities to invest in a master franchise in the region, you may contact Amir: amir.roshanzamir@franchiseworldlink.com www.franchiseworldlink.com

Franchise World Link had chosen India for their annual convention this year. Privately held event had been organized on the 13 and 14 the October 2016 in New Delhi. India was a strategic choice because franchise Industry in India is growing at 400 percent per year. Convention coincided with Franchise trade show held on the 15th of October in India. International members of the Franchise World link team are visiting the show today to identify franchise growth opportunities in this fast growing market.

 

Going international for a franchise organisation is not always easy. And once should learn from the various ways the industry has been moving over the last decades.

The key aspect is to think ahead and decide on a strategy.

In the late 90’ Michael Porter was already mentioning that companies had stopped thinking strategically. They were looking for a quick return on investment and copying what the others corporations were doing. This was and it is still the trend in franchising. A “me to” strategy can be observed with many franchisors. A lot of them just want short term to reduce costs and increase profits quickly without any strategic thinking.

Strategic issues in franchising abroad in term of geographies and market approach will have a direct impact in the franchisor medium and long term viability.

Internationalization of Franchise businesses is booming and we are in the midst of a new revolution driven by globalization and technology.

Strategic issues are completely different from tactical issues or operational issues.

For example companies like Tea Shop had planned a long time ago there strategic way of seen their expansion. We can observe from successful franchisors or licensors that the definition of the strategic issues is done by the board of directors or by the CEO.

One of the first steps of the analysis is the geography and the social economic aspects that would influence which territories to tackle first.

The world is changing and Asia and Africa are incredibly attractive territories for franchising or licensing with a large potential for the future. The next decades will see dramatic population changes in the world:

Country population. FWL.

By 2050, India will have overtaken the US as the world’s second largest economy

According to a report by “ Ecademy Asia Pacific”, the annual revenue from Asia’s franchise markets are growing at over US$50 billion annually, and annual revenue will grow at over US$100 billion annually within five years. 

In view of such encouraging statistics, Africa and Asia will be is attracting like-minded potential investors, entrepreneurs and new industry players.

More and more medium size franchisors will have to study the opportunity, the risk and decide on a strategy of going abroad.

 

Worlds Largest Economies 2014

Worlds Largest Economies 2050

 

Over the various successful internationalization franchisors we are helping, we at Franchise World Link a company which connects franchise entrepreneurs internationally had identified 2 key success factors for international franchise expansion:

1-  A strong willingness to franchise the business abroad is important: 

Adapting a successful franchise concept in another part of the world is not easy.

First it is necessary to have a market analysis and costumer buying behaviours study to understand if the Franchise concept would be suitable for the country.

Then a territory studies must decide how to target the country. This has to be largely accepted and explain internally. Then the strategy should be explained internally in the entire corporation must buy into it.

Some franchisors will just manage opportunities in foreign countries but ideally an international expansion plan is of paramount importance.  At Franchise World Link we have seen many franchisors or even licensors with a good local concept trying to go everywhere with no management strategic thinking. But we have seen as well franchisors like TAB an American franchise concept with a clear international strategy about how to go internationally.

Going everywhere and too fast, managing only day to day opportunities in various countries cannot stand as a strategy. Global franchise expansion should be done step by step through real strategic thinking and the driven factors should revolve around the quality of the partners you find at the early stage.

If  a Regional Franchisor is already present in some neighbouring countries, then it would be easier to define which region they want to target next. There are 2 schools of thinking: The first school advocates expanding to culturally closed countries as long as your franchise business concept is exportable.

Any franchisor will need first to analyse in which countries they are bound to be successful and what adaptations would be needed to attract country master franchisees.

This truly is a challenge and the entire corporation has to rethink its strategy. The strategy must also be shared with the shareholders and not left restrictively to the International Expansion director.

Ideally, at the beginning a small culturally open minded team with international experience would be required. Companies need to forecast enough internal resources and have a coherent internal financial model.

2-  A good legal advisor is really key:

What a lot of franchisors really need is a good legal advisor. In their country of origin, their legal department must be familiar with international operations and foreign countries (or eventually this could be subcontracted).

In the destination country the legal advisor will need a similar specialist to draft a good master franchise agreement. Each country is different and the Master Franchise agreement requires to be reviewed locally, in line with local laws and regulations. Then the pilot process and the disclosure documents may vary from one country to another.

The legal aspect of franchise is extremely regulated in the USA and Europe for example and less organized and structure in Africa or even some fast growing countries in Asia.

Some countries would request an authorization from (like in many countries in South East Asia the government would require to be a master franchisee a first pilot. This first pilot would be necessary before the franchise master should be authorized to sell franchise units.

But this would be as well very useful for both the franchisor and the franchisee to learn from mistakes.

At Franchise World Link we have identified with our clients one key internal and external motivation factor that have a direct impact on franchising overseas:

1-  An external motivation factor:

External consideration will help the franchisor to drive and push its business to identify international franchise opportunities.  If the shareholders or the board of director are comfortable with the actual profit figures it would be complicated. Internal resistances would be a limitation factor. On the contrary at Franchise World Link, we have identified that if you have an exit strategy to sell your business; this will boost considerably your Global franchise expansion. Being in various selected countries, with a franchise concept that works abroad and that is successful, would considerably increase considerably the value of the franchisor’s corporation.

Furthermore, when talking to suppliers, partners, new prospect unit franchisees, and new potential master franchisees this would also considerably increase the bargaining power of the franchisor.

2-     An internal motivation factor for the actual franchise network:

Assuming that the actual franchise network in the country / or region of origin is very satisfied and franchisees and country master franchises are comfortable with the actual image and dimension of the franchisor network it would be complicated to boost more countries.

However, if the actual network is not represented internationally there would be an immediate positive effect with the actual franchise network. Opening new countries and communicating it properly in the franchise network would considerably increase the motivation of actual franchisees, masters, multi-franchisees and employees in general. Facially there will be a positive impact in the franchise valuation of units and master when they would sell (what we normally call a transfer). 

Being perceived as an international franchise network will boost considerably the financial value of the unit franchise or the master franchise when a transfer is envisaged or even when the franchisor wants to sell its business to a larger franchisor. We have seen it recently with the example of Quick restaurants and Burger King.

The world is changing very fast and franchising overseas could bring incredible opportunities for generating both new revenue and new profit growth to franchisors and licensors.

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Olivier Guerrero – CEO Franchise World Link Corp

Contact us (info@franchiseworldlink.com) if you need help with bringing your franchise business abroad.

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Olivier Guerrero, CEO of Franchise World Link has recently participated in a Sunday Brunch talk focused on Franchise, Fashion and Retail on radio CoolturaFM in Barcelona. Olivier explained how Franchise systems work, why they are so successful and why adjusting the strategy to the local market is so important. (Minutes 48 – 56).

Operating in 10 countries around the Globe, Franchise World Link helps franchisors to succeed abroad and focuses on accessing Asia and Africa. Olivier is confident that African countries, which are just starting to emerge as an area of interest for franchisors, have a huge growth potential and even though this continent lacks rules and regulations, it is rapidly growing and can no longer be ignored. Franchise World Link has developed a locally based network of partners, able to provide all needed support, consultancy and the sourcing of qualified Master Franchisee in the country of interest for your business. Franchise World Link is very successful in Europe as well and currently working with many well-known brands.

If you are interested in learning more about open opportunities in Europe, Asia and Africa, please contact us at info@franchiseworldlink.com for a free consultation.