Australian franchisors are often approached by international entrepreneurs looking for the next hot concept to launch in their region. You need a well devised strategy, a well-resourced capability and a clear understanding of how to achieve a profitable outcome before proceeding.
Many established Australian companies look to international expansion by securing Master Franchisees in foreign countries as a new opportunity for growth. Although Australia represents less than 2% of the world economy, a surprising number of Australian franchise businesses such as Boost, Cartridge World, Pack and Send, Poolwerx, Crust Pizza, Clark Rubber, Guylian and Jenny Craig have successfully made the transition demonstrating how franchising grows brands on a global scale. There are many groups or individuals with substantial net worth who are searching for successful franchise concepts. Many governments and financial institutions also recognise that franchising creates economic opportunity, jobs and profits, so actively encourage overseas franchise systems to establish networks in their countries. Australian franchisors are often approached by foreign entrepreneurs and will use this interest as the sole basis for their international expansion. However, knowing when to expand internationally and with whom, and understanding that this requires a well-orchestrated strategy are the keys to this successful exercise. Our multi-disciplinary team of commercial strategists, lawyers, operations specialists, brand and marketing analysts and recruiters work together with you to develop your international expansion strategy. We prioritise first which countries you should expand to considering issues such as language, adherence to the rule of law including intellectual property protection, economic and political stability, the ease of doing business and the competitive landscape.
We evaluate your investors who need a demonstrated financial and operational capability, prior experience in business, people management and real estate if it is a bricks and mortar based business. Your Master Franchisee needs to be hands on, operating the business on a day to day basis autonomously. Your international expansion strategy needs to cover legal issues such as protecting your IP, registering your trademarks well ahead of commencing negotiations, drafting agreements that you can enforce and ensuring compliance with franchise requirements in that jurisdiction. We also advise on the optimal business structure and provide the financial analysis that assesses the franchise format, the commercial feasibility and your financial returns. We can assist with operational requirements: provisioning your international supply and ensuring the operational resource to train and support the Master Franchisee at a distance. It is imperative that the resource you allocate to international expansion must not put your growing domestic operation at risk. You need to have a brand and marketing strategy that can accommodate the inevitable changes that a foreign market demands whilst still delivering on its promise and ensuring brand consistency. A well implemented international expansion strategy can ensure sustainable future growth through new markets and revenue streams. A poorly executed one is an intolerable risk to your existing network.
Recent International Expansion Updates
As a franchisor, the Code requires you to update your Disclosure Document at least once a year and within 4 months of the end of your financial year. This means that for most Australian-based franchisors they must attend to the 2016 update sometime between 1 July 2016 and 31 October 2016. Franchisors can’t legally recruit franchisees without an up–to-date Disclosure Document. So it is crucial to ensure that this document is current and update at least once a year.
I warned a year ago that if the franchise industry did not clamp down on franchisee misconduct in relation to wages, the Fair Work Commission would do it for them. Sadly, after the 7-Eleven case, that time has come. The way in which 7-Eleven handled this matter is a case study in how to botch a response to a public relations disaster.
Our journey with DC Strategy has been fantastic! From that initial strategic workshop to implementing our franchise program – there’s been lots of touch points. But if I think of one really great thing in our overall relationship and how DC Strategy continues to contribute to our success, it’s having them on our board.Warren Jones - Chairman, Total Tools
When DC Strategy came in to meet the board at the time, the noise was taken away. Once they had been convinced by the expert this is what you need to do and this is how you need to approach it and from thereon we never looked back.Marshall Hartwich - National Market Development Manager, Ben and Jerry's
The DC Strategy team draws upon its solid understanding of the franchise model to improve the performance of our organization. By tapping their knowledge, we have more quickly identified our opportunity areas and defined the action steps to capitalize on them.Bill Swanson, - CEO, Cartridge World International