Other fees
In addition to the fees and royalties mentioned above, it is common these days to
charge technology fees for use of a franchise’s proprietary software or web-based
management systems. Marketing fees are
sometimes charged for development of
marketing collateral. The franchisee also
will be asked to spend 3 to 6 percent of
their estimated gross sales in the country
on local marketing.
A clear trend
While we continue to see all types of international franchises, master franchises
and area franchises are the most common.
They leverage a brand the most because
of the lower up-front investment, but
they also give away the most control to
the franchisee.
One of the biggest challenges in international franchising is control of how
your brand will be developed in another
country—who will be representing your
brand.
Increasingly, we are seeing U.S. franchise
brands looking for substantial companies
to acquire the rights to their franchise in
a country through an area franchise that
does not allow sub-franchising. This gives
tight control of who is operating the
franchise and also requires a franchisee
with experience, infrastructure, management talent, and considerable capital
to invest. For the franchisor, this means
better brand control in a foreign country,
less investment, and most revenue from
direct royalties. n
Multi-Unit Franchisees Dream.
Build. Grow. Succeed.
Grow Market Lead
Hut units they are starting to franchise
in smaller cities. Obviously, control of
the brand is the highest for this type of
international franchise, but so is the franchisor investment.
To provide a deeper sense of their journeys, insights, and
personalities, we’ve selected from our most inspiring print
interviews to create a new series of videos of
these franchisee leaders.
We call them Empire Builders.
(408) 997- 7795 ext. 202
William G. Edwards, with 40 years of international business experience, has lived in
7 countries and worked on projects in more
than 60. In addition to having been a master
licensee in 5 countries and in charge of international operations and development for a
U.S. franchise, he has advised more than 50
U.S. companies on their international development. Contact him at 949-224-3896, see
his blog at http://edwardsglobal.com/blog/, or
visit www.egs-intl.com.
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