The fundamental principle involved in international franchising is a partnership between a company with international aspirations for its brand, and an individual or organisation in a target country which is better equipped, both culturally and logistically, to handle its own market. The Master Franchise combines a license (transferral of intellectual property rights), exclusive distribution agreement (for the franchisor's services and products), plus a commitment by the franchisor to provide initial and ongoing training and support to the Master Franchisee and its staff.
This international partnership model makes market penetration faster and smoother by utilising on-site expertise, contacts, language skills and local knowledge - all provided by the Master Franchisee, who is in an excellent position to help, guide and consolidate the franchisor's move into the target country.
North American franchisors have been particularly successful at adapting their extensive franchising experience to boosting exports, especially in the key entry technique of selling Master Franchises. In a recent survey of US franchises conducted by the Rosenberg International Center of Franchising and the International Franchise Association Educational Foundation, more than half of the respondents currently operate units outside the US with almost one third of their total franchise units being operated overseas (30.2 per cent). "This is nearly a 20 per cent increase in international expansion of US-based franchise systems since 1996," reveals the survey report, "and a 53 per cent increase since 1989."
The survey also found that "those surveyed appear poised for expansion. Nearly four out of five franchise companies (79 per cent) plan to open new units outside the United States in the next three years, which represents a 44 per cent increase since 1996, and nearly a 70 per cent increase since 1989. Canada (26 per cent) and Europe (15 per cent) were the primary areas targeted for overseas expansion during the next three years. Pacific Rim countries (nine per cent) and China (seven per cent) also emerged as strong contenders."
In this expansionary climate, Franchise International presents a host of expansionary brands from the Retail, Service and Food, Beverage & Hospitality sectors which are seeking to grant National and Regional Master Franchise brands.