Tom Portesy on 'Franchising in the States'

For many years….The US had been to major exporter of franchise concepts.

The world is full of US brands and in most countries, owned by a savvy master licensee who saw an opportunity and capitalised on it. And although the US is still the leading exporter of franchise concepts, the tide is shifting. More and more non-US brands are leaving the boarders of their country and taking their concept International.

The reason varies:

a.       Outside markets are out pacing their domestic market, which have hit a downturn.

b.       They have all but maxed out development in their home country.

c.       They have found the perfect International Partner (usually by accident at first).

Those franchisors who do decide to develop outside their country are now looking at the US in many cases. They see the tremendous upside of the huge economy far out weighing any of the registration requirements steps they must take to enter the US.

US investors (and in some cases actual existing franchise companies) are taking advantage of this shift. They are seeing non-US brands as an amazing opportunity to introduce an exciting new (but proven) brand to the thriving US market.

So many International Brands have high level, sophisticated systems and operational support that importuning them comes with little risk. And in the case of an existing US franchisor acquiring the US development rights, it allows the US entity to take advantage of their existing infrastructure to sell and support franchisees. If I were to guess what would be the biggest trend in franchise development in the next 10 years, I would say it is the importing of brands into the US.

Over the years I've had the privilege of meeting many UK franchisors and learning about their brands. I have watched them grow in number of units and infrastructure. These brands are some the world’s finest concepts, with a high level of start-up assistance and ongoing support. They are poised for International expansions and have many advantages in coming to the US, with a common language being just one.

As companies realise the registration process is not as difficult as it has been made out to be, more and more International Franchise Concepts will be entering the US.

Why shouldn't the UK lead that charge?