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4 Things to Know About Buying an International Franchise

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4 Things to Know About Buying an International Franchise
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Are you interested in extending your reach across the southern border and buying an International franchise? If so, you might be in for a few surprises along the way. None are insurmountable but all require you to take extra consideration and precaution as you make your journey to international franchise ownership.

1. American Franchises are Still Considered International

There’s a term in the franchising world called “International light.” Some franchises, especially restaurant franchises, use this term to describe a move across the border from the United States to Canada. That’s because the two countries share so many of the same or similar lifestyles and business laws.

Although it might feel as though it’s a “light” move to buy an American franchise over a Canadian franchise, you should still treat the process the same you would if you were buying from any other foreign country. There will be differences. There will be unique hurdles to cross than if you were to buy a Canadian franchise. It’s important to maintain the mindset that you are, indeed, buying an international franchise, even if it is from our friends south of the border.

2. Research is a Non-Negotiable

Whether you’re a serial franchise owner or brand new to the world of franchise ownership, research is critical. Research is what helps you understand the details you might not know exist before you get too far down the line.

Buying a franchise is filled with details and nuances. Add into the mix the element of the franchise coming from another country and there are even more small intricacies to the deal to consider. Research is what will help you uncover those details and nuances — ones you might not know exist.

3. Plan for Product Differentiators

Businesses that offer any type of product should research supply chain logistics before making the leap and bringing a franchise across the border. If you’re selling any type of food product, realize that you’ll need completely different product labels than those that are used in the United States, which will require extra steps and could add extra costs. If you’re known for sourcing specific ingredients or elements to the product, you and the franchisor will need to do extensive research to find vendors that offer similar quality at the same price-point in your country.

Unique product details can be costly. If you’re one of the first opening up this particular international franchise in Canada, plan for some wrinkles in the supply chain. If your franchisor is more established in Canada, you might still incur higher costs by opening the franchise in Canada simply because the franchisor must adjust liquid capital requirements to account for these hurdles. It’s not necessarily bad, but it is important to take note of as you decide which franchise to buy.

4. Branding Still Matters Across the Border

Regardless of whether a patron visits your establishment in America or in Canada, the experience must feel the same. If you’re buying a franchise steeped in American tradition, you’ll need to maintain that branding. You won’t have as much flexibility to adapt the brand to your Canadian market. Although the American branding could offer appeal to certain demographics, it’s important to remember as you analyze who you’re trying to reach and how you’ll get in front of them.

Stay Detail-Oriented

As you consider buying an international franchise, it’s important to stay detail-oriented. Research - consider your market, and analyze supply chain logistics. The more you know about what it will look like to own an American franchise in Canada before you buy, the more informed a decision you can make.

Susan Guillory is the President of Egg Marketing & Communications, a marketing firm specializing in content writing and social media management. She’s written three business books, including How to Get More Customers With Press Releases, and frequently blogs about small business and marketing on sites including ForbesAllBusinessThe Marketing Eggspert Blog, and Tweak Your Biz. Follow her on Twitter @eggmarketing.

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