HOW TO KNOW WHEN YOU ARE READY
'TO GO INTERNATIONAL'
Franchise Times, MAY 2004 USA and Japan

We are often asked by senior executives how they will know they are ready to make the strategic decision to enter international markets. From our own experience as senior international executives, as consultants and from the experience of our Clients, we offer 10 milestones that you need for a solid foundation for international development.

1. Strong senior management buy-in to ‘Going International’
Make a strategic decision to build the foundation of a successful international business on an ongoing basis (versus making a couple of deals only for the initial fees). This is the single most important step in your process of Going International with your business. Without the most senior people in the business being convinced that this is the proper strategic step do NOT start an international program. And your Board of Directors should also strongly buy in to this strategic decision.

2. A proactive ‘Going International’ strategy and business plan
Create a realistic budget and establish achievable goals for revenues and numbers of units to be opened outside your home country for the first couple of years. Perhaps the single biggest mistake we see companies make is to react to internet or other leads from international markets before first establishing a business plan and budget for international development. This usually leads to costly mistakes.

3. Apply for trademarks early to protect your intellectual property and your brand
Apply for trademarks before starting to market in a country or someone in the country will do it for you! Never let an international candidate ‘help’ you register your trademarks, as they will also own them with you, or instead of you.

4. Clearly defined market and competitive advantage
Know what clearly makes your concept different than the average business in your sector. It is essential to show prospective international partners of your business that you can compete in their marketplace. Licensee, distributor or joint venture candidates will be looking for something that makes your business different so they can bring a new competitive business to their home market.

5. Have a good record of success in your country
Good international candidates will want to know how your business is doing and had done in your home country. If the international candidate is not interested in how you have done in your home country, look for another candidate. They need to do their own due diligence to be real candidates. You want them to thoroughly understand your business before you sign an agreement to work with an international candidate.

6. Have documented training, support and marketing programs
These are much more important outside your home country where your licensee, distributor or joint venture partner has to make your concept work in their country.
You, in effect, have to transport your business model to another country and culture. The stronger your systems, training and support, the better the concept will transfer in the form you want it to operate.

7. An Intranet for cost-effective training, support & communication
This is simply the most cost effective and controlled method of providing international training and support. And an excellent way for you to manage your international, licensees, distributors or partners. An intranet is 24/7/365, cutting across all time zones. It also contains only what you want international partners to know about your business and how it works. This is very important in international markets where you cannot see what is happening to your business.

8. System standards and reporting processes are in place
Once you are established outside your home country, it is essential to monitor and enforce your business systems just like you do at home. We are always amazed to find Franchisers who have good systems standards and monitoring processes in their country but they do not enforce the same standards outside their home country.

9. Be prepared to do market and competitor research
You need to know the market to be in a position to negotiate with a licensee, distributor or joint venture partner in a country. Find out who is the local competition and how you are better than they are. Assess the market to determine in advance how your business will do in a country. The alternative is your being at a disadvantage in candidate negotiations. Use home country and target country Advisors who have experience to minimize mistakes in market entry.

10. Be prepared to conduct due diligence on overseas candidates
Know who you are dealing with to minimize surprises in the future. There are several services available to help you find out the details of your prospective licensee, distributor or partner. Again, utilize experienced Advisors in the target country to conduct due diligence.