| Potential franchisees out there: don’t let this article discourage you from approaching those franchisors who you think you can work well with – maybe you can. Franchisors out there – enter a new market when you think you’re ready. Franchising takes more effort than most realize. The degree of support that needs to be provided and which franchisees expect can be overwhelming, and it is generally (though not always) easier for an emerging franchisor to be able to lend that support when the geographic distance between head office and franchisee is smaller. Further than that, it helps when you know the market you are servicing. Going international before you are ready, or broaching a territory that wasn’t necessarily on your immediate radar, presents a few potential risks. First, if you haven’t already set your sights on that new country, you likely have no idea whether you can even get the trade-mark to operate there. And given how long it takes to obtain trade-mark registration in most jurisdictions, it’s a question you’d want to have answered as early as possible before the franchisee opens a business with your logo branded across the storefront signage. Second, when you start franchising, you’re no longer in the business of operating that business – you’re in the business of selling and supporting franchises, and your franchisees are in the business of operating that business. If you’re not prepared devote the amount of resources and develop the appropriate infrastructure to support those international franchisees, you’ve probably taken their initial fee for the wrong reason. Third, unless you have the infrastructure in place to provide regional supervision and support in multiple territories, your visits to and inspections of a franchised business are likely to be less frequent than of those which are geographically closer to you. As a result, you may find that, when you do board a plane for your annual inspection, either brand standards are being considerably deviated from, or the business has been failing at far faster clip than you were aware, either of which only serve to dilute the strength of your brand in that region. Of course, international franchising presents numerous opportunities, and the road to brand strength and global expansion is populated with plenty of success stories. International franchising may be the logical next move for your system and the next step towards capturing larger market share. Just make sure you’re pursuing it for the right reasons – your reasons. See also:
About the author
Chad Finkelstein is a franchise lawyer at Dale & Lessmann LLP in Toronto and can be reached at [email protected] or (416) 369-7883.
| 
