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Tuesday 16th August, 2022

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Master franchising: the solution to your growth pains

Insight

Master franchising: the solution to your growth pains

Launching your brand overseas can be a huge step, but with these essential tips, you can avoid the hardship of unprepared expansion

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.

“Much like everything in life, there is no perfect formula to help determine when a brand is ready to begin franchising internationally”

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 singlesource 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.

The author

Jeff Oddo is the CEO and owner of City Wide Facility Solutions and City Wide Franchise, a leading management company in the building maintenance industry with nearly 70 franchise locations across the United States and Canada.

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