Home' The Franchise Review : June 2015 Contents The Franchise review
2. Review your operation in Australia – will it need to
undertake a close analysis of your australian operation and
design the model you would use if you were starting out today.
what would you change? would you bring in key people
for management and advisory roles earlier? what were the
mistakes you made?
as part of this process, you need to review your agreements,
manuals, budgets, territory structures, and marketing
and organisation structures, as well as your recruitment
processes. as these all need to be determined for your target
country, use your perfected australian model as a template.
The surprise bonus is that you will probably tweak your
current model and improve your performance in australia –
This is a terrific opportunity to consult your current australian
team of advisers, your management, and especially your
franchisees to ask for suggestions on countries that they would
choose and how they would set up the structure, as well as
recommendations for changes that could be made. Keep your
eyes peeled, because you may find that your international
franchisor pops up unexpectedly from this group! when
expense reduction analysts was expanding, new Zealand
national Franchisor ross Pinkerton sold up and bought the
canadian rights. That simplified the process for everyone.
Determine options for your participation. For example, will
you open a corporate outlet or a joint venture with a local
businessperson, or bring in a master franchisor? Or will you
just recruit franchisees and put in a local management team,
providing high-level support from australia? These are all
important questions to ask as you look for the most effective
and efficient option with the lowest level of risk.
in one example that i’ll give to minimise the downside,
alarna longes of clearskincare clinics chose to establish
a european headquarters in london and open company
clinics before franchising.
everything must be open for review at all times, and you must
be particularly aware of the level of control that you will need,
as well as the initial and ongoing support that is required to
ensure success. you skimp here at your own risk!
a valuable tip is to speak to australian and local non-competing
franchisors operating in the same or a similar countries, and
learn from their experiences.
3. Build the support teams to work with you
you’ll need people you trust in australia and on the ground
overseas to form your international franchise business,
including consultants, brokers, product suppliers and
The first step in this process is to determine your ‘home team’,
because this will enable you to use their expertise to ensure
that you recruit the best possible people in your ‘away team’.
home team roles will change as you transition from initial set-
up to an established operation.
you also need to seriously consider which roles you’ll delegate
to your local operator, and how roles may change as the
business expands. is your training done in the new country, or
here in australia? who is responsible for quality control? how
do you maintain accountability and compliance?
4. Review your intellectual property and protection
it’s critical to fully understand any different legislation or
protocols that are in place, both from the franchisor and the
consumer viewpoint. This needs to be done meticulously
and should include contracts, trademarks, registration of
business names, operations and procedures manuals, and
your very own ‘seven herbs and spices’, which give you that
My recommendation is for your franchise-experienced
australian franchise lawyer to liaise very closely with the
overseas legal team.
5. Determine your research and development and funding
Determine how much you are prepared to invest in time, money,
and emotional energy – then add a 20 per cent contingency.
and commit in writing where you will draw the line!
carefully create your ideal model budgets for operating in the
australian environment, including research and development,
recruitment, capital, and product sourcing or manufacture. ask
yourself if you need to rely on exports from here. will you have
to change your recipes? For example, subway in india has to
provide vegetarian fillings in a separate booth, and Boost Juice
in some cases has yoghurt produced locally.
you will inevitably find items in your revenues and expenses
that will vary dramatically from those in australia, so you
need to revise budgets and reconsider your whole business
model for a new country. For example, when John O’Brien
of Poolwerx was looking at europe and the united states for
expansion and the global financial crisis hit, he reviewed
his business model, saw too many imponderables, and
prudently decided not to proceed. This was a difficult
decision after having already committed to going ahead, but
sometimes cutting your losses can be the best investment!
O’Brien is going ahead now, eight years later, because the
economy has improved (see Poolwerx case study below).
you also need a strategy in case your plans go pear-shaped.
This may be a decision that’s too hard for you because
you are too close to the project, so consider charging your
australian support team with that decision.
international franchising is exciting, and can be enormously
rewarding on many levels if you remember to keep it simple,
follow a system, and stand on the shoulders of others.
i wish you every success!
If you do it correctly, this international
move could be the first of many, so it’s
worth getting this first step right!
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