Many small businesses have discovered that exporting to countries overseas is a lucrative business opportunity. However, when they sit down and develop their operating plan they are faced with the dilemma of what type of exporting to engage in. Franchising is a very popular business venture both on the domestic front and internationally. However, it is more difficult to franchise a business internationally than it is domestically. There are some key differences between the two that every business owner needs to be aware of, especially if they are trying to get their small business exporting division off the ground.

Franchising has long been a business that has proven to be effective and profitable on both sides of the fence. Domestic franchising is considerably easier, however, because all of the resources needed for it are within a reasonable distance of one another. International franchising, on the other hand, requires a great more patience, expertise, and resources, especially when dealing with a foreign culture that may or may not have the additional problem of a language barrier.

Does this mean small businesses should skip franchising as a way to break into the exporting market? No. It does mean that small business owners will need to be more on the ball when it comes to making sound financial business decisions.

There are three main issues each international franchiser needs to be aware of. Let’s take a look at them:

Issue #1: The risk involved

• There is risk involved in any business venture, but when it comes to international franchising they tend to be greater. Most small business owners suddenly find themselves working outside their comfort zone in dealing with product issues as well as staff. They are required to deal with markets that are unfamiliar to them both culturally and professionally and they must be prepared to deal with the unknowns of the business. Franchisers are required on the international level to deal with partners that are from the country they are setting up in which requires a great deal of research in order to find ones that are reliable. While using a partner with international experience is a plus, international franchising is still filled with risks.

Issue #2: The culture

• Research is imperative in any exporting operation, especially when you are not familiar with the culture you want to set your franchise in. Exporters need to educate themselves on the culture their franchise will be in, and it is a good idea to seek out indigenous partners and advisors who can aid them in understanding the myriad issues they will face during the first few years of business overseas.

Issue #3: Adapting to the international environ

• Not every franchise will work in the original format. For example, if the franchise is a fast food chain in India, there will need to be adaptations made to the menu. This is where many international franchisers run into problems. The franchise has to be adaptable otherwise it is not going to succeed in the international environ. International franchise owners must be prepared to adapt.