Finding an ethical partner with a proven track record, and whose values are in line with your values is also key. There are many things that can go wrong, or get misguided over a long period, and it helps knowing the actual investor or board director personally in case something ‘sensitive’ ever happens.
Last but not least, it is important to define your expansion strategy well before choosing a business partner or partners. Your expansion plan will determine whether you want to strategically have one partner for a full region, or whether you want to have a different partner in each country.
The advantage of having one partner per region is that it gives you less of a headache, as you only have to train one franchisee and deal with only one person for the entire region, which therefore demands fewer resources from you. In theory when you have one partner, once the systems are in place, the expansion is just exponential and things should in theory operate smoothly. However, is if it turns out that it is ultimately not the right partner, then you will have no good partners in the entire region. Putting all eggs in one basket is sometimes dangerous.
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Having separate partners in a region means you will require a bigger support team to manage all the partners. But you can also expand faster as each franchisee will be opening simultaneously. Many different partners in a region also gives you the advantage of being able to charge multiple individual country fees, rather than having only one partner who will be negotiating a lower single territorial fee.
In conclusion, before you approach a franchisee, or reply to one who approached you, to expand your brand out of your territory, I recommend you focus on your requirements and expectations. Then evaluate the potential partner’s financial capability, his business ethics, area of coverage and experience in the business.
And once you have gone through the process of strategically shortlisting your potential partners based on the criteria above, meet them over coffee and see how the conversation goes...
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