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Benefits of International Franchising

Globalization is a driving force in the world economy. As the restrictions from the 2020 Pandemic began to ease, globalization surged. Countries like China, India, and Russia are particularly exciting because their exploding economies are producing millions of new consumers hungry for a higher standard of living.
Smaller countries, such as Vietnam, Cambodia, and New Zealand, are also showing impressive growth. In Africa, Rwanda’s growth is ranked in the Top 5 worldwide. Many countries in South America and other countries in Africa are also eager to gain access to new products and new markets. More than 450 U.S. franchisors already do business internationally.

Growth in consumer spending abroad creates fertile opportunities for U.S. franchisors to expand internationally. Expanding internationally is a logical progression where a market exists internationally, where a market may be built, or where the home market has become saturated. Foreign business operators may also approach U.S. franchisors with proposals to expand outside the U.S.

International franchising also allows a franchisor to build and enhance its brand as a global competitor, and to reduce its dependence on the U.S. market. Many international markets present growth opportunities that franchisors should develop in the interests of diversification, as well as growth of market share.

At The Johnson Franchise Law Firm, we help franchisors analyze the potential of international franchising. We also help them minimize the risks that accompany entering a new market. Rick Johnson has represented franchisors with franchise transactions in over 60 countries. He has a long record of successfully expanding U.S. franchises onto almost every continent.

Planning for international franchising

International franchises and franchising have become a popular method for companies to diversify into new markets. The U.S. franchisor uses the franchisee’s local market knowledge to expand into the new geographic area.

An American franchisor expanding abroad must address several concerns, such as:

  • Determining the type of franchise to be offered: unit franchises, master franchises, area directorships, co-ops, or some other collaborative arrangement
  • Protecting trademarks and other intellectual property internationally
  • Complying with the laws of the host country
  • Drafting international franchise agreements and disclosures
  • Creating manuals and training programs
  • Creating supply chains
  • Cooperating with the government agencies of the host country
  • Respecting the customs and cultures of the host country

Rick notes that immediately before the 2020 Pandemic shut down travel, he met with face-to-face with government officials in Germany, Austria, and Hungary:

     “The authorities were uniformly shocked that an American would take the time to meet with them, give them assurances about the integrity of the companies he represents, and show a genuine interest in filling the needs of the investors and markets in their countries. All in an atmosphere of shared friendship and respect.”

Contact our franchise law firm

At The Johnson Franchise Law Firm, our focus is on franchise laws, including international franchises and franchising. With over 10 years of business experience and 30 years of legal experience, franchise attorney Rick Johnson understands the complexities of international franchise law and can guide your company away from costly pitfalls. To take your business to the next level through international franchise development, please contact The Johnson Franchise Law Firm today.

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