The United States continues to be the leading exporter of franchise brands worldwide, but non-U.S. brands are developing into international concepts, and entering North America, as well as other global markets. More of that is going to occur in the future, and as it does franchising as we know it will change.
There was a time not so long ago when U.S. franchise brands dominated global markets. You could see the brands at franchise expos and then out in the marketplace as local consumers frequented the new franchises. In the Gulf Countries, for example, food courts in malls look like food courts in the USA.
In many countries of Europe and Asia, however, local franchise brands are popping up and their franchisors – sometimes driven by slowing local economies – are looking for opportunities to move into the global marketplace. The big winners in all of this – besides franchisors and the consumers they serve – will be master licensees!
As a franchise community, we don’t know enough about master franchising. Little relevant data is available about the hundreds of master franchisees that exist in the world – the majority operating outside of North America.
Even though the data is old, I’ve read survey results that say master franchisees are under-whelmed. Many become dissatisfied after buying a franchise because the franchisor – often based in North America – isn’t in step with local customs and cultures. Consequently, many master franchisees do not develop successful networks.
Master franchisees, who must become franchisors within their country or territory, are looking at a huge task. They must not only learn how to sell franchises, but also how to train and support franchisees, and handle all of the other challenges that franchisors face. Look at the amount of support that’s available to help franchisors globally – a smidgen of that support exists for master franchisees.
However, I see all of that changing within the coming 10 years. As more and more foreign franchisors step up to enter North America they will likely sell to master franchisees in America. That’s when the focus on master franchising will intensify.
Better yet, the focus on master franchising should begin now so that we’ll be prepared for the future.