The children’s services sector of the franchise industry is thriving and lends itself well to international expansion
Children are increasingly global customers and parents in the developed world desire high-quality service providers to care for, teach and entertain their children. Children know what they want and what they like and are not afraid to tell you! Franchises operating in this market have to be lithe and responsive, keeping up with trends and offering well-thought through solutions to families’ needs.
Having established a unique child-led position in the holiday childcare market in the UK, Fun Fest Holiday Club is preparing to expand internationally by taking the following steps:
1. Ensuring a robust business in the UK
• A clear market proposition which is proven to appeal to the target market
• A track record of financial stability and growth for the franchisor and its franchisees
• A reputation for quality and consistency within the industry. Awards, accreditations and membership of professional bodies help to establish this
• Proven franchise systems and support mechanisms
• Franchisees who are passionate ambassadors for the brand and the business
2. Establishing a framework for growth
Consider what needs to happen for the business to be able to support its growth expectations in the UK and internationally in terms of the finances, people, skills, infrastructure and technology. Research sources of potential funding and financial assistance through local business support services.
Your local Department of Trade and Industry offers a ‘Passport to Export’ service which analyses the main characteristics of countries around the world in terms of demographics and culture. This enables you to identify the countries which most closely match your key criteria so that you can start your journey with the greatest chance of success.
Compile a SWOT analysis for these countries by investigating relevant cultural customs, regulatory bodies, the competitive landscape, franchise awareness and any other legal, political or geographical factors that could impact your business. This will enable you to make educated and informed decisions as the process moves forward.
5. Expert advice
The advice of someone who has experience of your industry on an international level is invaluable as they can guide you safely around the pitfalls which the unsuspecting may fall into. A mentor may already be available or you can engage a consultant with relevant experience. It is worth contacting local universities and other organisations which support businesses in your area as many offer free courses and support.
6. Identify the desired structure for expansion
There are two main options to consider; a master franchisee or an area franchisee. A master franchisee needs to be trained as a franchisee and as a franchisor as they are granted the right to sell franchises in the country. This tends to work well in large countries similar to the UK which are familiar with the franchise model. Area development offers a single operator the right to open multiple locations themselves and so they operate as a franchisee with a country as their territory.
7. Prepare a rigorous recruitment process
Decide upon the personality and skills that you require from a master or area franchisee and devise a rigorous recruitment process which tests those desired traits. Any established franchisor recognises the importance of recruiting franchisees with the right skills and mindset and this becomes even more crucial when they are responsible for the success of your international expansion.
8. Consider the valuation
What price is fair for the master or area franchise as well as ongoing fees? Consider the potential of the area but also be careful not to underestimate the time and energy required to complete this process or the value of your brand and business model.
9. Action Plan
Having completed the preparation, it is time to make an action plan. Consider what has worked well in the UK and translate this into a global context. If domestic growth has been achieved by exhibiting at trade or franchise shows, targeted PR, press advertising or digital marketing, then your experience in these disciplines will help you to achieve results in other geographies. In addition, keep abreast of international trade missions run by the local chamber of commerce or other organisations supporting British businesses to export. International consultants and brokers can be engaged if you wish to delegate more of the process.
As a franchisor it is usual to develop rigid systems and processes to ensure that customers in the UK have a consistently positive experience of your brand. Whilst these will help you expand your business model into another country, it is important to recognise when to allow some flexibility in response to local influences to enable it to reach its potential in a different market.
The process should not be rushed as it will take time to prepare thoroughly for international expansion but you need to be able to identify and capitalise on an opportunity when it presents itself.
ABOUT THE AUTHOR
Sarah Beattie is Managing Director of Fun Fest Holiday Club, Ofsted registered childcare which offers children a choice about how they spend their holiday. With a menu of exciting activities, each child can design their own individual holiday programme.