International franchise rights

A recent article in ArticleBase outlines some of the steps to take when acquiring international franchise rights: 

If you have found an overseas franchise opportunity that you wish to market in your country, you may be able to secure development rights to operate multiple franchises in a specified location. This can definitely prove to be a lucrative investment, heading the expansion of a franchise in a new international market. Here are several steps to get you started:

Determine your finances: When deciding whether or not to invest in an international franchise you will want to consider the resources and financing you will have available to cover your start-up costs and carry your business until it can turn a profit.  Don't forget to consider additional costs, such as travel, long-distance charges, trademark registration, importing/exporting costs, taxes, marketing and franchise attorney fees.

Research: You will also want to investigate the background of your chosen franchise and do some market research on the territory in which you are considering opening your new franchise.  You can find valuable resources through the United States Department of Commerce, United States Commercial Service, International Franchise Association, and International Trade Administration when researching your potential development area. To find out more information about your potential franchise business opportunity, you will want to consult with a non-partisan investigative company that can perform background research and let you know how accurate the provided data and information is.

Work through the system: Once you've researched the franchise background and are ready to move forward with the business deal, it's important to find out if there are any legal or technical barriers that could hinder the final contract (such as currency export restrictions and trade embargos). Once you've received the all-clear, you can then determine if there are franchise disclosure requirements in your chosen country.  If there are disclosure requirements, review these documents with a skilled franchise attorney. If possible, use the services of an international franchise attorney to ensure that all aspects of the franchise agreement are legal and your investment is protected.  You may also wish to retain a local franchise lawyer in your chosen country to ensure that all the local legal requirements are met as well.

Once the contract has been negotiated, and you have secured development rights, it's time to get started on the nitty-gritty details. You will have to register trademarks, develop training methods, determine importing methods, develop your site, and create marketing materials - all while maintaining close contact with your overseas franchisor to ensure that you are on the right track. Once your first franchise is operational, you can consider expanding your business franchise by securing additional franchisees.

Again, keep in mind that this is the opinion of a single franchise lawyer and by no means a the complete picture: for a more complete picture, go to international franchising, where these issues will be thoroughly covered in the months to come. 

International franchising strategy important to Totvs of Brazil

International franchising is alive and well in Brazil. 

Brazilian software development group Totvs(Bovespa: TOTS3) will hone its 2011 international expansion plans on Argentina, Mexico, Colombia and Peru, but will employ different strategies in each market, the company's executive VP Jose Rogerio Luiz told BNamericas.

Totvs has both direct offices and franchise networks in Mexico and Argentina, and will be looking to grow inorganically to give its presence in those countries a shot in the arm.

Meanwhile, Totvs will lay the groundwork for a network of franchises in Colombia, though Luiz noted that the company is considering offices in that country.

"We are eyeing growth trends in Colombia, which could present such opportunities for Totvs," he said. "We should make a decision towards the end of the first half of the year [in 2011], depending on the evolution in the analyses that we are carrying out."

Finally, the Brazilian firm will make its foray into Peru strictly through franchises.

Despite the different strategies, Luiz said all four countries are significant for Totvs due to their high GDP growth and volume of SMEs.

The executive also underscored the importance of electronic billing regulations in Mexico. Totvs has racked up 20% year-over-year revenue growth in that country so far this year, and is expected to maintain double digit increases due to the new laws.

"As the government increases pressure for more efficient tax collection, then companies will face a greater need for technology," he said. "This will play into the hands of a company like Totvs, which provides management software solutions."

"This will drive Mexico's IT sector during the next 3 or 4 years."

The executive added that Totvs will finance its international growth plans through cash on hand, though the company is open to other alternatives such as loans or debentures.

Totvs posted net profits of 33.0mn reais (currently US$19.3mn) in the third quarter 2010, up 6.8% from the year-ago quarter. Global revenues during the same period jumped 20% to hit 303mn reais.

Go to internationalexpansion.org where we track the expansion of international companies, including international franchise companies, and bookmark the site. 

International franchising includes importing franchise brands

International Expansion covers both import-export issues and international franchising issues. A recent article on eHow deals with importing a franchise to the US. It is rather cursory, but gives a couple of pointers worth noting:

A franchise business is based around a specific concept, product or recipe. The United States has very low barriers to entering the market for entrepreneurs, making the U.S. the ideal soil to import a successful franchise idea. The technical procedure for establishing the business or incorporating in the US will be the easy part. Importers of franchise businesses must prepare to adapt the franchise to the U.S. market.

Difficulty:

 

Moderately Challenging

Instructions

1. • 1

     Adapt the franchise business plan to suit American consumers. Change the name, brand or logo by abbreviating the name or modernizing the look if necessary. Eliminate any local or cultural references that Americans would not understand, such as references to local or cultural leaders from the country of franchise origin. Streamline and automate any back-office functions that could benefit from American technology, such as tracking paperwork.

   • 2

     Establish an initial location where a distinct market for the franchise concept exists. For example, set food imports near cities with large concentrations of immigrants from the country of franchise origin. Set fashion imports in cities known for fashionability, such as in New York or Los Angeles.

   • 3

     Register your company with the state secretary in the state where the business will be conducted. Register for state and local taxes.

   • 4

     Apply for an Employer Identification Number (EIN) from the Internal Revenue Service. You can apply online at IRS.gov. Since your franchise may be a master franchise in the U.S., you may be considered the sole proprietor or part of a partnership or joint venture depending on the terms of your contract with the main franchiser. Consult an attorney to be clear on how to self identify for EIN application.

   • 5

     Obtain state permits or licenses if necessary. Not all franchise concepts call for a permit or a license to be sold. However, since you may be importing products from the franchise's home country, you will need an import license for any trademarked or copyrighted items.

   • 6

     Market the product to the target audience. Consult a marketing agency for the best methods of reaching your audience, but you will definitely need a website, separate from the franchisor's site.

There will be more useful and in depth articles on this under international franchising later on. Go there and bookmark the site for future reference. 

International expansion through strategic partnerships and publicity

The key to domestic and international expansion is strategic partnerships and publicity" argues James Scott, author of

http://article-author.com/global-expansion-taking-your-company-public-the-truth-about-corporate-strategies-available/

We could not agree more. In fact, we will soon be posting an article, at http://www.internationalexpansion.org, detailing 7 steps to increasing the value of your company, in which strategic partnerships and publicity are two of the seven steps to take. 

International expansion by going public

International Expansion concurs with James Scott when he advises that "Going public can be rewarding, prosperous, empowering and the beginning of massive capitalization and international expansion." And also when he continues, "Use the process of going public to create wealth for your family, long term job stability for loyal and hard working employees and a product or service distribution that spans the globe."

But he also warns that it is well-worth the cost of hiring a strategy consultant: "Strategies consultants that specialize in pre public corporate strategies and structuring, IPO facilitation and post public investor relations planning and mergers and acquisitions. They’ll expedite the public offering while giving your company a powerful foundation conducive to hardcore domestic and global expansion."

International Expansion will cover all of these issues in much more detail in upcoming articles. 

International staffing usually includes relocation

International staffing often requires relocation. The following EzineMark.com article covers some of what you need to know. International Expansion will follow up with much more in later articles. 

The global expansion of corporations and ever increasing educational opportunities has made international travel and relocating a very common phenomenon. The experience of moving overseas is looked at as an opportunity for growth.  International relocation requires many changes, additional planning and preparation. These range from the simple everyday basic necessities, such as 

household

 electrical appliances, to the professional and cultural aspects.

The first step is to contact the embassy of the new country and obtain information on visa requirements and vaccinations. A valid passport is essential, prior to filling in an application for a visa. Most embassies are located in Washington D.

Details of all consulates are also listed in the Foreign Consuls of the United States directory, available at public libraries. Many countries require a letter of recommendation, which can be obtained from an individual's bank manager or employer.

It is a good idea to contact a relocation specialist. They offer a chance to have a smooth and trouble free relocation. They assist movers not only in finding a home, but also in taking charge of setting up the home, 

utilities

and communications. 

International licensing deal between MG ICON and HBC for Material Girl

International Expansion found the following press release that may be of interest to those following up on international licensing, and especially, international retail licensing: 

NEW YORK

, Dec. 13, 2010 /PRNewswire/ -- MG ICON, the joint venture between Madonna and Iconix Brand Group, Inc., (Nasdaq: ICON) announced today its first international partnership with Hudson's Bay Company (HBC or the "Bay") for its junior brand, Material Girl. The Material Girl collection of apparel and accessories will be exclusively available in all Bay doors this spring 2011.

This is the first license outside of the United States for "Material Girl" and marks the beginning of an international expansion strategy for the brand. The "Material Girl" collection was inspired and designed in collaboration with Madonna and her daughter Lourdes, along with Iconix Brand Group's in-house fashion department.

HBC, one of Canada's leading fashion retailers, has entered into a multi-year license agreement to manufacture and distribute "Material Girl" clothing and accessories in Canada through their 91 Bay stores.  

Lanie List, Chief Merchandising Officer, Iconix, stated, "The creation and launch of the Material Girl brand was a success in the United States and we are thrilled to expand into Canada. HBC is the premier retailer in Canada and we are pleased to partner with them on this exciting expansion endeavor.  This is the first in a series of new partnerships we plan on announcing for MG Icon properties."

To add excitement for the launch of Material Girl, key styles will be available for the upcoming holiday season. The full collection of tops, dresses, jackets, denim, shorts, footwear, and handbags will launch for the spring 2011 season.

"Material Girl" is a fast-fashion junior collection that launched exclusively in Macy's stores in the United States in August 2010.