Should you buy a foreign franchise?
Are you interested in buying a foreign franchise? I found some info about whether or not it is a wise decision. There are more foreign franchises coming over to the U.S. every year, such as Kumon Math, Reading Centers and so forth.
Are you the pioneering-type who likes to the first to try things? This can be a lot of work and start off on a rocky road. However, there are benefits to being the first ever to bring a foreign franchise over to the U.S. For example, some franchisors will cut the costs such as, the franchise fee or the cost of marketing materials because you are taking a huge risk with their company. You should feel free to ask whether or not they are willing to give you this kind of discount. If you are drawn to things such as this, here are some things you should do before you make a decision.
First off you should definitely investigate the franchise you are thinking of. You want to find available info on its history, product, performance record, and future goals. You also want to investigate how well the franchise is doing in other countries other than the U.S. You also want to find out how well the franchise is doing in the U.S. by contacting the master licensee based in the U.S. If the master licensee is a dimwit, you probably do not want to go with that company. If the master licensee is knowledgeable enough to answer your questions, then that is a good sign. This will determine if down the road the master licensee will be able to help you out when you’re in a jam in terms of sales and finances.
You will also want to request the UFOC for the franchise, just as you would with a U.S. based franchise.
Another thing you want to consider is whether or not the foreign franchise will be popular in the place you want to start it. Sometimes foreign franchises are a huge hit because it’s new and exciting, but sometimes it can be a huge dud because the people in the area do not like change or exotic things. You want to understand the cultural trends in the area you are thinking of entering. For example, say you want to open up a Thai food restaurant. Before you enter the area you want to think of these questions: Are the people here adventurous? Do they like exotic food? Are they willing to step out of the normal foods they eat?
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