Important Considerations for Acquiring an International Franchise Brand

Anti-apartheid leader and African National Congress (ANC) member Nelson Mandela raises clenched fist, arriving to address mass rally, a few days after his release from jail, 25 February 1990, in the conservative Afrikaaner town of Bloemfontein, where ANC was formed 75 years ago.        (Photo credit should read TREVOR SAMSON/AFP/Getty Images)

The late Nelson Mandela, revolutionary, politician, philanthropist and Nobel Peace Prize recipient once said that “A good head and a good heart are always a formidable combination”. I have always found Mr. Mandela’s words to be very profound and I believe the combination of head and heart to be very relevant to international franchising and in particular to the decision making process when a local investor is considering acquiring and developing an international franchise brand in their home market.To successfully acquire, launch and develop an international franchise brand in a new market, I believe a potential investor must have both the right Head and the right Heart to take on the franchise brand. Determining if you have the Head and Heart for the business/brand requires a significant amount of internal or self-analysis in addition to and concurrently with the standard due diligence you will conduct on the franchise brand and the potential for the brand in your country. Let’s explore my philosophy in greater detail:

Team of skilled designers and business people working together on a project

The Head for the Business:
The Cambridge Dictionary of American Idioms describes having a “head for something” as “having a natural ability to do something well”. In terms of acquiring and developing an international franchise brand I believe that the important Head considerations can be summarized as follows:

Head for the business – Do you have the capability to successfully acquire, launch and develop the brand in your country?

Economics – Do you understand the economics involved in acquiring and developing the franchise business and what it will take for you to generate a return on your investment and achieve your goals? This will need to include both an understanding of the unit or facility level economics involved in establishing the brand’s retail outlets or branches and the overall economics involved in setting up a company and managing the human and financial resources and assets.

Apptitude & Application – Do you understand the fundamentals of the franchise business and its unique selling proposition and core consumer base in its home market and what changes you will need to propose to, agree upon and implement in cooperation with the franchise brand’s management team to ensure the brand is successfully positioned for launch and development in your country?

Development – Do you and your team have the vision and capability to formulate and implement a market entry and market penetration strategy and grow and expand the franchise business into a key player in your country?

The Heart for the Business:
The Cambridge Dictionary of American Idioms describes having a “heart for something” or “putting your heart into something” as “doing something with all of your energy and interest”. In terms of acquiring and developing an international franchise brand I believe that the important Heart considerations can be summarized as follows:

Heart for the business – Are you going to apply your complete energy and interest towards successfully acquiring, launching and developing the brand in your country? Are you going to give the business/brand 100% 24-7-365?

Enthusiasm – Are you, your family and your team excited about the franchise business and the opportunity to introduce the brand and offer the brands products and services to the people in your country? Are you confident in your belief that the consumers in your country will be as excited about the brand and its products and services as you are?

Attitude – Are you convinced that the franchise business is going to be rewarding for you and your family and stakeholders in the ways that are the most important to all of you? To answer this question, you must be very clear on what is most important to you?

Relationships – Are you comfortable with the people who own and manage the franchise business and have you gotten to know and understand them well enough that you are confident that you can develop a long, meaningful and mutually beneficial business relationship based on shared objectives and founded on integrity and trust?

teamwork

Time – Do you have the time? Are you committed to invest the time and effort that it takes to succeed and can you balance your many personal and professional priorities to allow you to do so? Remember time is one of the only commodities that can’t be grown or multiplied or reproduced if it is lost or wasted so don’t fool yourself by telling yourself and others that you can “make” the time if you just don’t have it.

So in summary before you decide to commit to the acquisition of an international franchise brand in your country you, your family and all of your stakeholders need to look to your Head and Heart to determine if you have the capability to successfully acquire, launch and develop the brand in your country and that you are committed to apply your complete energy and interest towards successfully acquiring, launching and developing the brand in your country taking into account the key considerations I have summarized above.

Once you are convinced you have the Head and Heart for the business/brand you can move forward with your further analysis and due diligence knowing that you have acted wisely and responsibly by conducting the critical self-analysis required for a major undertaking of this nature.

Additionally, you shouldn’t just keep this to yourself or treat it solely as an internal exercise you should share it with the business/brand as your progress your discussions and negotiations with them so that they understand the level of your commitment to developing their brand in your country.

Of course these Head and Heart considerations are not the only considerations and there are many other issues to consider when acquiring an international franchise brand and many steps in the process but having the right Head and the right Heart makes for a very a good start on the journey to creating a franchise relationship that looks like a “match made in heaven”.

Wishing you every success with your franchising endeavours!

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