Why Master Franchising Could Be the Perfect Solution to Your International Growth
City Wide Facility Solutions CEO and owner, Jeff Oddo, recently shared why master franchising is the most viable option when growing your brand internationally with the Global Franchise Magazine editorial team. Read the article below or visit Global Franchise Magazine’s website.
Why Master Franchising Could Be the Perfect Solution to Your International Growth
Launching your brand overseas can be a huge step, but with these essential tips, you can avoid the hardship of unprepared expansion
By Jeff Oddo
After dedicating time and effort to creating a well-established, successful business in the United States, franchisors might start to think about other ways they can keep growing their brand. For some, the next step could be new product innovation, partnerships with other like-minded companies, or expanding to other countries. As City Wide Facility Solutions continues to hit major milestones, international franchising was the ultimate answer to the following question: how can City Wide spread a positive ripple beyond North America? To those brands that are ready to begin the journey towards international franchising – below are a few tips to help franchisors determine when is the right time and why they should choose master franchising.
There is never a perfect formula
Much like everything in life, there is no perfect formula to help determine when a brand is ready to begin franchising internationally. However, there are certainly a few aspects that should be in place before expanding.
Franchisors need to have a trusted management team and the proper financial resources. One of the key ways to ensure this is to already be a dominant player within the industry you serve. It is a risk and much more of a monetary investment to begin expanding overseas when a brand has yet to establish itself in its industry. Potential franchisees in other countries will evaluate the success achieved in the home market to determine whether they want to invest in the opportunity. If a franchisor isn’t able to prove that prosperity, it will become very difficult to sell a franchise to individuals who are already unfamiliar with the brand.
In the case of City Wide, there were several pieces in play that allowed for the launch of international franchising efforts. The economy is currently in the right place; the need for a single-source management company for various interior and exterior facility solutions is there; the corporate team is very capable of handling an initiative at this level; and the resources to execute on this long-standing dream are there.
Ultimately, international franchising might not be the right path for everyone, but it is also hard to know if it is or isn’t when a brand doesn’t take the chance.
Benefits of master franchising
One of the most crucial benefits master franchising provides is it allows the ownership group to be closer to the end user. This means the client or customer will be receiving the best service possible because the master franchisee has a deep understanding of the culture. It also gives an opportunity for individuals to spread and share the wealth and success of the brand themselves. For City Wide, this strategy fell in line with our longstanding philosophy of creating a positive ripple effect. As a franchisor, with master franchising, you allow other small business owners to live their entrepreneurship dreams, and support their own family, community, and local causes they believe in.
Another important aspect is the master franchisee understands the legal and business aspects of their particular home country better than the franchisor. By partnering with the right individuals or company, it allows franchisors to maximize efficiencies and drive excess costs out of the system while giving the chance for both parties to focus on what they do best. The franchisor will provide the master franchisee with all the support they need and in turn, they can support their franchisees and clients/customers at a local level. It offers a win/win/win situation for the franchisor, master franchisee, and client/customer (which can often be a rare occurrence).
As an example, from the perspective of City Wide, granting a master license allows the franchisor to provide the type of support they are accustomed to, which gives them the ability to find franchisees quicker. City Wide then only has to ensure one entity is fully trained and ready to start franchising, which allows both teams to specialize in their area of expertise.
So, why not multi-unit or direct franchising? Simply put, these models are incredibly hard to manage in foreign countries. The level of support needed from the corporate Support Center would become quite complicated, due to the variation in business practices across each region and country. Bottom line – direct franchising adds costs, decreases the client experience, and dramatically reduces the impact a brand can make internationally.
Maintaining the brand’s legacy overseas
Even with the benefits that master franchising offers, bringing a brand to a market that is completely unfamiliar with it, especially one with different customs and expectations, will always come with its own set of challenges.
The solution to these obstacles you will face is actually a lot more straightforward than you would think, and that is having the ability to adapt. Just take a look at any company that has established itself as a major global powerhouse like McDonald’s, Apple and PepsiCo. McDonald’s and PepsiCo, in particular, have adjusted their menus and products to each country. It’s well known that if you go to a McDonald’s in Japan as opposed to one in the United States, you won’t get the same menu as the company has adapted its food offerings to something that is more customary to the country’s culture.
One thing to make clear here is that you should not be completely overhauling the brand to the point where you lose the core values of what you stand for. The main philosophy for City Wide is to always be the “First Choice” for clients, employees, franchise owners, independent contractors and vendors. That sentiment will remain the same for us no matter where the next location opens. It could be in Texas or it could be in Germany, but the standards we follow to ensure we are simplifying the janitorial, disinfecting and maintenance issues critical to building owners are able to transcend cultural differences. Values are what makes your brand unique from others in the marketplace, and should be instilled within your master franchisee as well so as not to lose the legacy that you and all those before you have worked hard to create.
The other advantage here is master franchising gives a chance for current employees, franchisees, or others within the company to relocate or expand if they’re looking to experience other parts of the world. An ultimate goal for many franchisors is to form a legacy brand where franchisees end up passing along ownership to daughters and sons, or the passion they’ve had for the brand influences them enough to open up their own location. This shows the staying power that you as a franchisor have. Not only that but in the situation of master franchising, having a master franchisee who already has that initial background knowledge of the brand ensures your identity and legacy will remain intact.
Final advice before taking the leap
Before you make any final decisions, reach out and have a conversation with an international franchise consultant to help you navigate the landscape. There is a lot about international franchising we still do not know and are continuing to discover.
Also, things that come into play when launching international franchising efforts, like market analysis and building key relationships, take time. Patience will be key when working with foreign entities. It is a good idea to have someone on your franchise development team focus on expanding internationally. With the time and effort it takes to progress a brand on an international level, it is crucial to have someone dedicated to this initiative.
Most importantly though, franchisors need to understand why they want to expand and ensure the rest of the team is in alignment with the decision. This kind of initiative is not one that franchisors can make happen on their own. It is a big decision impacting everyone who is a part of the company – from corporate employees to franchisees to vendors and, in the case of City Wide, independent contractors; there are many people who are impacted by this decision. In the end, the key decision makers for the company should make sure all parties have bought into the idea and are bringing the same level of excitement to the prospect of growing the brand internationally.