You franchisors Those seeking growth through international expansion face the need to choose where to put their financial, human and time resources. see why open a franchise in the USA!
Opportunities must be prioritized. And there is often a trade-off between where the franchisor sees the greatest opportunity, and where a potential franchise steps forward and asks to bring the concept to market.
As such, it can be tempting to delay entering what is perceived as a tough market for what is, in the short term, easy money.
1. US market
With a population that is educated and highly literate, the US is a country that offers a consumer market with a high level of disposable income.
Furthermore (and important for those wanting to introduce a new concept), the US demonstrates an abundant desire to try to accept new branded products and services. They are constantly looking for providers that can exceed expectations, enabling the entry of new markets.
The population is largely concentrated (81.4%) in urban areas and is ethnically and religiously diverse.
So, in a total population of over 313 million, the overall penetration of franchise branded locations is still relatively low. But with a per capita ratio of 379 franchised locations for every person nationwide.
2. Franchise in the US
The dynamics of franchising have provided an ever-increasing benefit to consumers around the world. Plus, the US is still the economic gem, which makes it an attractive place to expand.
Certainly, for foreign franchisors, the attractiveness of a deductibles existing robustness, with increasing acceptance of multi-unit ownership, enables faster achievement of brand recognition, critical mass and lower unit support costs.
Capital for franchisee expansion is relatively easier to obtain in the United States than in other countries. In addition, financial institutions are experienced in lending to franchisees.
The regulations of franchise in USA are based on the premise that the franchisor, within some relatively clear limitations, can choose its methods of expansion and independently define the terms of its franchise offering.
Certainly, the regulation of franchises has been great for their acceptance in the United States.
That's because it was rooted in pre-sales to publicize potential franchisees presented in a structured format, and it largely eliminated the fraudulent practices that occurred before regulation.
Potential franchisees are given the terms of the franchisor's offer well in advance of making their franchise investment. And they are given the time needed to perform adequate due diligence on the franchisor opportunity.
3. Advantages of opening a franchise in the US
It is advantageous to open a franchise in the US because there is such a well-defined and structured (certainly not perfect) regulatory framework that makes the US one of the easiest markets for foreign franchisors to enter.
The attractiveness of the US market is due to:
- Strong consumer acceptance of franchised concepts
- Largest and most experienced global franchise market
- Clear and well-defined regulation of franchises and businesses
- Access to capital and financing for franchisees
- Well-defined methods of recruiting franchisees
- Significant brand protection
- Treaties and low barrier to entry for foreign franchisors
- Significant supply chain capabilities
- Strong and improving economy
- Experienced workforce available
- English is the predominant language
4. Planning your entry into the US market
Regardless of where your franchise is operating and which countries you plan to expand into, you still need to plan your market entry.
This requires an internal assessment of your strengths and capabilities. It also requires an understanding of whether your products and services will meet consumer demand.
But also and you will be able to effectively support your franchise organization to achieve its financial and other goals.
- First, are you ready to expand, and do you have the necessary financial and human resources?
- Do you have realistic expectations about the time and money required to enter the market?
- Are your supply chain systems sufficient to meet your expansion goals?
- Do you have the resources to carry out a sufficient marketing program to introduce your brand and build a loyal clientele?
- Is there a market for your business? Do you have an advantage over established competition both as a consumer offering and as a franchise system?
- What modifications to your “retail” and “franchise” offerings will it take for you to be competitive?
- More important, you and Does your franchisee achieve an acceptable return on investment in an acceptable timeframe?
There are a number of decisions and adaptations that are required when entering any new market. And America Expert can help you with that! Get in touch and request more information on how to open a franchise in the USA!
