Twelve months working across borders taught me the fundamentals don’t change – they just become far less forgiving.
I’ve worked in franchising for a long time, across operations, franchise development, franchisee recruitment and supporting franchise networks, so when I became more involved in international franchising a little over a year ago, I wasn’t learning franchising from scratch. Instead, I discovered how to add a new, specialist international layer on top of the experience I already had, and that layer has changed how I apply almost everything I knew.
International franchising is still franchising, the principles you already know still apply, and the disciplines involved don’t really change. What does change is the margin of error. Distance, currency, culture and different legislation don’t so much introduce new rules as magnify the consequences of the old ones, which is exactly why the fundamentals you think you have covered matter more overseas, not less.
Much of the new perspective I’ve gained in the last 12 months has come from working closely with Farrah Rose, who leads international franchising at The Franchising Centre. She was able to show me a whole new international dimension to the work we were doing – a market nuance, a structural risk, the way a particular route to market tends to play out in practice.
The same mistakes, on a completely different scale
If your model is loosely structured, your training thin, your manual vague, or your systems reliant on people “just knowing what to do,” those gaps are survivable when the franchisee is an hour down the road. You can get in the car and go and sort it out. You can’t do that when the operator, master franchisee or area developer is several thousand miles away, working in a different language, market and legal system.
I have seen people make mistakes in how they approach franchising, development and recruitment in the UK, and the consequences are serious even when everyone involved is in the same country. When that happens on an international scale, you’re looking at a whole new level of problems. A struggling single-unit franchisee is a tricky fix, but handing someone the rights to develop your brand across a whole country, with significant money invested on both sides, and then watching it falter at that distance, just isn’t containable in the same way.
International expansion doesn’t rewrite the principles of franchising, but it does remove your room to ignore them.
“A good franchise” and “a good franchise for this market” are not the same thing
There are two questions here that are easy to run together but should always be considered separately: is this a good franchise, and is this a good franchise for this particular market?
A brand can be hugely successful at home and still lack a compelling proposition elsewhere, while a concept that looks relatively niche in its home country can turn out to fit another market exceptionally well. A concept can be exported, but the economics, customer behaviour, competition and operating environment of your target market – and how you adapt to them – determine whether or not it succeeds.
The financial side is a good example. Building franchise financial models is something I do a great deal of in the UK, and international work has reinforced how much more careful you have to be when you apply that discipline in another market. If a product sells for a set price in the US, converting that figure into pounds tells you almost nothing about the right UK price. You have to look at what the market will bear, what competitors charge, what customers perceive as value and whether the margin actually works for the franchisee — then do the same for rent, labour, business rates, supply chain and marketing. Currency conversion is just arithmetic. Rebuilding the commercial model for another country is market analysis, and mistaking the first for the second is one of the easiest and most expensive errors to make.
Territory design can come with very similar problems. Dividing a country by population produces a tidy map that looks good on paper, but might not actually give you the right kind of territories to make growth viable. What actually drives demand for your business might be households in one sector, employment or business density in another, income levels, specific industries, road networks or commercial centres. How that works in one country can be very different from the next, so what’s worked in your domestic market can’t simply be copied over.
The structure should come out of the analysis, not before it
This is probably where working alongside Farrah changed my thinking most, and where I would gently challenge the most common assumption I hear. Almost every international conversation opens the same way: “We want to enter the UK, so we need a UK master franchisee.”
Master franchising is a structure which works well for a lot of franchises, but so can area development models, direct franchising, or a joint venture/partnership approach. There’s no one-size-fits-all – the right choice depends on the market, the economics, how much control you want to keep, and the kind of operator your brand is realistically likely to attract, and that will change from brand to brand, and from market to market. Which model you choose should be informed by your market analysis, not the other way around. It certainly shouldn’t be decided before you’ve even done any analysis at all.
Something else which keeps coming up that I’ve now learned to challenge is the assumption that your business should already be franchising at home before you can take it abroad. That isn’t true and I’ve seen plenty of examples now of brands who only franchise in overseas markets. However, what does need to happen first is gaining an understanding of what it means to be a franchisor.
Running a successful business and running a successful franchise network are two different jobs. Once you franchise, you’re transferring knowledge, teaching someone else to replicate what you do, recruiting people who can protect the brand and holding standards across a long-term relationship. If you haven’t built the infrastructure to do that well, putting another country between you and the operator only makes it harder.
Choosing the wrong partner is where it gets expensive
The right local partner brings knowledge you will never have from a distance: the property market, employment environment, suppliers, customers and business culture. That judgement matters, because good international franchising depends on knowing what is fundamental to your brand and what is merely the way it has always been done. Some things will need to change – products, pricing, suppliers, formats, marketing – and protecting what genuinely matters while allowing sensible local adaptation is absolutely key to success. Finding a partner with the right amount of capital is essential, of course, but it counts for nothing if you aren’t also looking for capability, infrastructure, judgement and cultural fit.
Due diligence has to run both ways, too. We rightly talk about franchisees investigating franchisors, but an international franchisor has just as much homework to do on the market it is entering. “The market is large” is not a finding. The addressable market, the competitors, the likely investor profile, the regulatory environment and the realistic number of territories are what tell you whether the opportunity is genuinely viable. Doing that work properly doesn’t only prepare you for the market – it also shows a serious partner that your brand is genuinely ready to enter it, which makes you a more attractive investment.
Which is exactly why this is a poor place to cut corners
When a brand is excited about a new market, the temptation is to move fast: reuse existing documents, lean on someone who “knows the country,” or keep parts of the work in-house to save a bit of money. It rarely works, and will end up costing you more in the long run.
International expansion is not the place to improvise. You want people who understand franchising, people who understand international market entry, people who know the local market, and the right legal, financial and operational expertise where it counts. That isn’t about stacking up advisers for their own sake. It’s about removing avoidable risk from a decision where the downside is unusually large and arrives unusually fast.
That is really the whole point. Looking back over the last year, my biggest takeaway isn’t that international franchising is a different craft. It’s actually that the fundamentals I already valued matter even more once you cross a border.
It’s not about removing all possible risk – we all know that’s impossible. It’s about making sure the risks you take are understood, tested and deliberate rather than the result of something you simply didn’t know you needed to consider.
So, the first question for a brand considering an overseas move probably should not be “who can take our brand into that country?” It should be “is our system genuinely strong enough to travel, and have we done the work to understand where we are sending it?”
If you’d like to talk about this some more, I’d be happy to share what I’ve learned and help you find out if your system is ready to travel.
Michael Hulmes
Franchise Consultant
