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I Want to Develop an Overseas Franchise in my Country - Can I Secure Development Rights to Operate Multiple Franchises?
Posted on November 16, 2010 by My Franchise Law

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.

 

External Resources

Small Business Administration

A government resource for finding information on planning, mentoring, and strategies for franchises and small businesses.
SBA Small Business Planner

USA.gov Business Gateway

Resources for every step in planning your business or non-profit, from getting your EIN to handling wages.  
USA.gov Business Gateway

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