Monday, April 20, 2015

Expansion Temptation!

From time to time, business owners visit with me and ask about expanding their businesses through franchising. That's good, they're in the right place. And, then they inform me that their interest was triggered by a visit from a solid business person who wants to open a unit in RUSSIA or some other international location. Of course, the business owner is gun-ho to get the deal done.

Now mind you, they have only one location, have not opened any other units and have not offered a franchise domestically. In other words, they do not have a proven concept. They have not trained a single franchisee.

So my answer is NO!

While international expansion through franchising is do-able  - legally and from a business standpoint - international expansion is NOT the way to gain your franchise-chops. Resist this urge.

Indeed, I often advise new franchise systems to expand slowly, with a deliberate plan and with great caution. Why?

First, you do not want to expand beyond your support infrastructure. Especially with your initial core group of franchisees. They need support and you need to provide it to make them successful. And, if they are successful, you will have your best sales tool to sell additional franchises.

Next, you have a lot to learn: standardized operations, training, local suppliers, demographics, marketing and legal requirements for you and the franchisees. It is difficult to learn from your franchisees if they are 10,000 miles away!

Of course, there are many more reasons why you should not jump into the international pool before you launch a domestic franchise program ... but you get the picture.

So resist the temptation to go international too early. In fact, develop a solid domestic expansion plan and stick to it. You will succeed by first helping your franchisees succeed.

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