Scott Lehr, IFA’s VP for International, reports from the IFA Annual Convention International Summit that international development is powering the growth for many IFA member fanchise systems. Bill Edwards, moderator of the session International Expansion – Identifying Market Opportunities, described some of the hot markets right now to target for international expansion. He also states that international business development should be treated as a long term strategic decision requiring planning and focused resources.
Edwards cites some of the top markets right now including Brazil, Hong Kong, Saudi Arabia, Singapore, Urban China, India, Indonesia and Vietnam. Of course food and hotels traditional lead the way in these markets but automotive, education, retail, and services are getting lots of attention in these top markets. Brazil, with more than 93% of their franchises being indiginous to Brazil, is a real leader in Latin America right now. The Growth in China is now expanding to the 2nd and 3rd tier cities. India also has a strong desire for food and retail.
Mike Powers, CFE, Executive Vice President of Business Development with Smoothie King Franchises discussed getting your legal and financial resources in line for the markets you are entering at today’s International Summit. His biggest piece of advice? “Make sure your trademarks are protected in the markets you are entering.” Powers also discussed pricing of territories and the support involved.
Smoothie King has been franchising for about 9 years and has learned many of their strategies from events like teh IFA Annual Convention. Mike just returned from Thailand and Singapore and was working with the U.S. Commercial Service and using their gold key program in their markets.
When Smoothie King entered Korea in 2003, they spent five times what their domestic unit would cost to get the right location to build the market. By the end of 2010 they had 79 locations with 35 being franchised. Other keys to success include selecting countries where you have a good chance of making a good rate of return and taking the time to select the right master franchisees.
David Ramadan, President of RAMA International, and a master franchisee of Curves International in the Middle East, stated that franchisors have to make a commitment to the markets that you are entering. Other considerations for entering the Middle East and India include defining your model whether it is utilizing a master franchisor, master franchisee or area developers.
Posted by Scott Lehr, IFA Vice President, International