International franchising is much more than big American franchises such as Coca-Cola , KFC or General Motors establishing “master franchise” arrangements in 192 nations.
Although international franchise is on much more of a smaller scale, with countries in the global economy exporting as well as importing, it is seeing strong growth.
The International Franchise Association reports that the U.S.-based Arthur Andersen accounting firm conducted a national survey to the franchise associations in 39 countries. These associations were asked to name the number of franchisors and franchisees in each country, their country’s total retail volume, and the percentage of the volume that involved franchising.
The results of the survey found that growth potential for franchising worldwide is growing exponentially. “The global market is far from saturation” said Leonard Swartz who, at the time of the survey , was Arthur Andersen’s worldwide managing director of franchise services.
The franchising giants have their niches where they strongly dominate their markets. Coca-Cola sends a syrup concentrate which is known as its secret recipe to franchise bottlers because it simply cannot ship high volumes of bottles and cans to its franchises. Kentucky Fried Chicken relies on its “11 herbs and spices” secret recipe to send to its franchises all across the world. General Motors has expanded franchises to deal not only in vehicle sales, but also in vehicle financing and real estate sales.
Franchising monoliths indeed are monoliths. KFC is just one franchising brand owned by Yum! Brands Inc. Others are Taco Bell, Pizza Hut, Long John Silver’s and A&W. So, if you see these fast-food franchise brands clustered together, now you know why.
But keep in mind that in all countries across the planet, the main economic engines are small businesses, including small franchises. People want more than sodas, fast food and cars.
For example, there is an increasing demand for improved education.Bette Fedder, an America teacher, developed a drawing school in her own home. She then grouped a curriculum and began to recruit potential franchise operators. Young Rembrants now has franchises all across the United States and now in South Korea, with plans to expand on an international level. Other tutoring companies have franchises that focus on helping students with overall general education, writing essays, science and math.
The global economy and trade meant that more packages than ever are shipped internationally. The big companies such as UPS may have a strong hold on the market , but smaller companies such as . P.A.S.S. Shipping and Handling has 800 franchise stores around the world.
The costs and benefits of becoming a franchisee. You have to pay a one-time upfront franchise fee to the franchisor — anything from $50,000 to open a known pizza parlor to $800,000 for a hotel franchise. You may also have an arrangement that involves a royalty contribution as a percentage of monthly gross sales, and an advertising contribution to the parent company.
Once you’re a franchise owner, you can rest assured that the franchisor wants you to succeed. Once you qualify, you will receive plenty of upfront assistance and advice. There are some exceptions, especially in the international market, but most companies want their franchises to be similar from one location to another so that customers know what to expect.
If you are seeking a franchising opportunity, do not be overly persuaded by companies that describe themselves as “fast growing” or “hot” or “on fire.” Growth indeed can indicate that a company is moving toward success, but sometimes the pace of growth is too speedy and the company overextends with too many new franchises at once. A company with consistent and steady growth is your best franchise bet.
International franchising opportunities includes computer technology, food industry, cleaning products and services, home health care services, home repairs, health and beauty, sports and recreation, travel and hotel. Those are just to name a few.
Joshua Adekane is a franchise consultant. Get more details for investing in franchises, please review Franchise advice and most useful practices