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Wednesday 10th August, 2022

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Tackling international expansion through the master franchisee model

Insight

Tackling international expansion through the master franchisee model

A franchisor of a global brand espouses the virtues of recruiting master franchisees to help grow an organization’s international presence

A franchisor of a global brand espouses the virtues of recruiting master franchisees to help grow an organization’s international presence.

For franchise brands that have found success stateside, international expansion is often the logical next step. By expanding into new regions your business is not only exposed to a larger market, but it also opens you to so many different ideas and ways of thinking that will aid in the continual evolution of your brand.

However, there is a considerable amount of research, time, and even risk, to consider when deciding to expand your brand into another country. It can be difficult to figure out where and how to start. As a franchisor, one option is to utilize the master franchisee model. With this model, the franchisor hands over control of a territory to a person or organization; the master franchisee. This master franchisee is not only required to operate their own franchise business successfully but must also develop the region by building and managing a team of sub-franchisees. While this model has the potential to make entering a new market easier, it is essential that a franchisor finds the right fit – the perfect fit – to successfully introduce and grow their brand in an international market.

Finding the perfect fit at the right time

When deciding to partner with a master franchisee, you need to ensure they have more than just the qualities of a traditional franchise owner (although those qualities are important, too). Take the time to reflect on the values of your brand: what is your mission? If that person or organization does not align with your purpose, mission and values, then they will not be an adequate representation of your brand. They may take shortcuts or compromise on the parts of your brand identity that make it successful and unique. In the end, the integrity of the business should be at the forefront of your mind when considering a master franchisee.

“When deciding to partner with a master franchisee, you need to ensure they have more than just the qualities of a traditional franchise owner”

Another element to consider is the person or organization’s business acumen and experience in franchising. Because you will be licensing an entire region – not just a territory like with a traditional franchisee – the master franchisee has to be extremely business savvy. Take their previous experiences into account before moving forward in the process. But, be wary – while their experience may look good on paper, it won’t guarantee success with your business. You may want to consider a kind of trial period. Have the franchisee open one unit, and give them a set amount of time to ramp-up the business and make it successful. If they can’t handle managing one territory, they are likely not the appropriate fit to own and manage an entire region. It is also essential they have a keen understanding and awareness of the region itself. To appropriately market the business, they have to know their audience. In general, a person or organization that is qualified to be a master franchisee looks at the big picture. While they are considerate of the smaller aspects of running a business, they often think more like a franchisor. If you can’t find a partner that encompasses the traits mentioned above, you haven’t found your master franchisee yet.

Aside from finding the right fit, my biggest piece of advice for anyone who is considering the implementation of this model within their system is: don’t rush anything. Even if you receive an inquiry from an interested franchise investor who seems promising, it’s important to take a step back and do your research. Ask yourself, will your concept even work in their market? For instance, an after- school program like Young Rembrandts will not work in certain countries because of the structure of their education system. Additionally, your business model may not be where it needs to be in order to successfully grow the concept – your processes must be nearly perfected before you can take your brand international. Overall, it is essential that you take your time and consider all potential outcomes before moving forward in the process.

The benefits of the master franchisee model

As previously mentioned, expanding your business internationally is no small undertaking. But, when utilizing this master model, it does make the process more manageable. The master franchisee’s insight and experiences may help to improve your domestic locations, too.

While keeping the integrity of your business is essential, the master franchisee – if they’re the right fit – may suggest modifications to the business plan in order to make it appealing to an international audience. This is appropriate, and welcome, as they should be the expert source on how to market the brand successfully in that region. Plus, you may even consider implementing their suggested changes in the business plan for your domestic locations. Even if your brand is operating successfully in its home market, there is always room for improvement. And, a fresh perspective can offer new insight on how to further enhance the business. Additionally, on a more personal level, their insight will help you gain a unique perspective into a different culture, giving you an expanded view of the world.

An additional benefit to utilizing the master franchisee model is that it doesn’t overtax the home office. Your first commitment is to your domestic owners, and they may be concerned when you announce the brand is looking to add international locations. But, by reiterating your commitment to their success, the prosperity of the franchise and the low cost of adding a master franchise partner, it makes the decision easier to explain to the franchise system.

While Young Rembrandts is still relatively new to the master franchisee model, we’ve already seen the benefits. When appropriately handled, it offers a reasonable way to spread your brand to an entire region or country. You can still focus on your domestic locations while empowering your master franchisee to provide that dedicated support to their franchise owners. In the end, when you find the right person in the right territory at the right time, all of the work and time put in will be worth it.

THE AUTHOR

Bette Fetter is the founder and CEO of Young Rembrandts, an art enrichment program that serves children in communities around the world.

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