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Franchise generally means a right or privilege.
In business, a franchise is a method of marketing and distributing based on a two parties relationship, which comprise of the franchisor (the owner and granter of right) and the franchisee (recipient of right). |
International franchising is a business method that involves licensing of trademarks and methods of doing business globally, it may consists of chain store, an exclusive right or media franchise.
What is the benefit of international franchising ?
Retail outlets which share a brand and central management are chain store international franchise, while an exclusive rights may be the rights to sell branded merchandise.
In media franchise, it involves ownership of the characters and setting of a film, video game, book, etc., particularly in North American usage.
International Franchising
Given the stagnant state of the economy, the recent financial crisis and lower expectations for growth in domestic markets, many companies are looking to international franchising markets to ignite growth and meet future development projections.
When we look at international franchising, it is important to know a little bit more about the International Franchise Association.
The International Franchise Association has represented and protected the interests of the franchise community as well as the American entrepreneurial spirit since its inception in 1960.
A membership organization of franchisors, franchisees and suppliers, International Franchise Association is dedicated to providing the members with the best franchise information.
International Franchising Basics
As globalization plays an increasingly prominent role in the world economy, businesses are prudently seeking to expand their operations abroad.
The rise of giant franchisors, such as McDonalds in China, are sending an urgent signal to large franchise behemoths and newly established franchises alike that international franchising is here to stay.
To begin with, an organization must have a solid domestic foundation and must be in a solid competitive position.
Its core competencies and positioning need to be clearly understood and need to remain the guiding force as the company expands into new markets.
Additionally, it’s critical that the franchise has a profitable business model, strong unit-level economics and a track record of success in its home market from both a company-operated and franchise basis.
A profitable business model must be duplicated in international markets for the company and its franchisees to succeed when it goes to international franchising.
In summary, when planning for international franchising, a business must be able to stand firm local before expand global.
Personal wise, international franchising is a good consideration as part of your portfolio of multiple streams of passive income, as a well established franchise system such as a beauty salon franchise will be able to generate good passive residual income for you.
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