Bringing a franchise to the UK - questions to ask an international franchisor
Article by Farrah Rose
The Franchising Centre
If you are looking to buy an international franchise to launch in the UK, there are many issues you need to look into. Below is a list of questions you need to ask the franchisor.
1. How well established is the franchisor - what is its track record in its owned and franchised operation, what are the split between owned and franchise units (territories)
2. How many franchisees has the franchisor got - are the franchisees all domestic franchisees? Is the franchisor franchising internationally if so, which countries are the international franchisees based in?
3. How many franchisees has the franchisor got domestically? How are they doing? Are they operating profitably, how long have they been a franchisee of the franchisor.. Have there been any franchisee resell and why .. Get to talk to one or two of them with the permission of the franchisor a
4. Has there been or are there any franchisee dispute or legal suit pending and if so why?
5. Has the franchisor got a domestic or international Franchise Disclosure Documentation or some form of details Information memorandum adapted for the UK Market
6. Look at how transferrable the franchise concept is to the UK Market – Please do your homework well - what works in one country may not work in the UK in its entirety – you need to assess if the concept and/ or the business operating format requires modification, would those modifications be significant to the point of diluting the concept beyond recognition and /or could the modification make the proposition financially unviable and impractical
7. Will the Franchisor commit you to a strict and unrealistic development schedule for an unrealistic period of time
8. How large would you territory be.
9. Will you be a sub franchisee of a local Master Franchisee or will you be the regional or country franchisee with or without the right to sell franchises on.
10. Is the franchise a product driven franchise? If so what is the supply logistics
11. Would the implementation of the system and business format require any form of certificates, permits etc. In the UK, if so what sort of support will you get from the Franchisor
12. What is the price parity between UK and domestic markets
13. Are the tradename and marks registered for the UK
14. Are there any legal requirements for entry of the brand in the UK
15. How long is the contract and is it renewable automatically
16. What are the key terms and conditions of the agreement and are they in line with British Franchise Association Guidelines – does the franchisor buy into BFA code of ethics
17. What sort of one off and ongoing support will the franchisor give you and who pays for what
18. How are the support delivered
19. Has the franchisor done its research for the UK market
20. Does he have modified operation manual to suit the UK market (which will necessitate the franchisor to have done its UK market study)
21. Are the rights granted to you for one unit or one territory or is it for a larger area with a tight development schedule
22. What is your fee structure to the Franchisor. Are there any hidden costs or fees you have to pay
23. How long is the training
24. Key terms of your agreement
25. What are the termination terms
26. Talk to their local franchise association and find out if they are a member of that association
27. Get yourself some decent one day advice from British Franchise Consultants who can review all the above information with you to see if anything looks out of the ordinary or not in line with franchise practices in the UK.
If you should like to ask Farrah a question about international master franchises for free, click here to fill out the question form.
Last Updated: 23-November-2015