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This past week franchise-focused companies and entrepreneurs descended upon New York City for the annual International Franchise Expo, including a handful from overseas looking to crack U.S. markets or woo investors to look beyond their own shores.
“We have franchise concepts from probably 30 countries,” says Tom Portesy, president of MFV Expositions, which organized the event in conjunction with the International Franchise Association. Many, he said, are established abroad and want to grow. “These are people who have made the decision to franchise in their own countries, have had significant success and have said, ‘you know what? It’s time for us to export a brand.’”
This year’s IFE convention in New York – a massive trade show that attracts more than 12,000 people and hundreds of brands – saw more than 40 non-U.S.-based franchise companies attend, Portesy says. Most are looking for master franchisees to help grow their franchise systems in various territories in North America.
One such company is Fit20, a fitness concept based in the Netherlands that has 140 locations worldwide, including three in the United States in the Washington D.C. area. The brand’s managing director, Ad de Waard, had set up a booth at the expo in search of master franchisees or multi-unit owners willing to develop territories in the U.S., as well as international investors looking to bring the brand to their own countries. For Fit20, America’s fitness space is a goldmine of potential, he told Forbes. “It’s a big market.”
Also in search of U.S. expansion is The Christmas Decorators, a Liverpool, UK-based brand that provides Christmas decoration services to businesses and individuals. The brand – which launched in 1999 in Aspen, Colorado, and still has a single location in the U.S. – went franchise in the UK in 2007 and today has 52 locations there.
Ged Comerford, the company’s head of operations, was on hand at the IFE this year to make connections that might help The Christmas Decorators find franchisee interest stateside, as well as to learn more about how to play to an American market. “Americans like to be sold to,” explained Comerford, “British people don’t … they don’t like feeling that they’re being pressured.” That dynamic requires the company make adjustments in how it sells itself to potential investors and customers.
There are other differences: EU privacy laws, he notes, regulate how much of customers’ personal information a company can store. Also, UK franchise brokers charge a monthly fee to find prospective franchisees while U.S. brokers often receive around 40% of the franchise fee for a deal closed. “For a British business to be successful here it has to be Americanized,” says Comerford.
Franz-Josef Ebel was also at IFE this year seeking investors, but ones willing to go to Europe rather than bring business from Europe. As managing director of Master Franchise Germany, Ebel has spent the past eight years getting franchisors to make the leap into Germany, and has worked with brands like shipping service InXpress, art education franchise The Seasons Art Class – both UK brands – as well as the Polish franchisor FreshBike, a mobile food kiosk concept. Ebel says he advises brands how to approach the German market and helps them recruit master franchisees or developers to spread their businesses in the country. This is his second year attending IFE and so far he has yet to close a deal with an American franchise. But he’s optimistic, he says, as he unveils a stack of business cards, each given to him by an interested party. The U.S., Ebel explains, is a top target for him. “You have so many franchises here.”
June 3, 2019 at 03:35PM
Forbes – Entrepreneurs