Most master franchises on offer in the UK are for products and services originally developed overseas. Formerly, the vast majority of franchises being marketed, for example, the big name fast food restaurant chains, originated in the USA. But, in recent years, an increasing number of master franchises have come from elsewhere, particularly Australia and the countries of the European Union.
American and Australian franchise owners often look to the UK when considering their first steps to expansion outside their native countries. The main reason for this is that English is the common language. This major advantage, coupled with a stable UK economy, favourable taxation regime, uncomplicated employment laws, low levels of corruption, similar legal systems and relatively light regulation of businesses, make the UK an attractive country for franchise owners seeking to expand. By the same token, these advantages offer budding British entrepreneurs scope to become successful master franchisees.
If a company operates a flourishing UK master franchise, at some point it could come close to saturation point within its market segment. In order to continue to develop their business, master franchisees may need to look elsewhere to continue to expand their franchised businesses.
The creation of a successful national franchised business would suggest that the master franchisee has really got to grips with the franchise environment in which he or she operates. This knowledge gives the master franchisee a distinct advantage when considering taking on a master franchise in another country. The particular franchised business model is understood; all that needs to be ascertained is to how this knowledge can be applied to another country!
Nevertheless, even for an experienced master franchisee, developing a franchise overseas is not for the faint-hearted. The language issue must be addressed; both in regard to the master franchise agreement and to the subsequent development of the business. In addition, higher wage levels, a harsher tax regime and stricter employment laws in another country could result in a business being unviable in that location, even though it is based on a formula that has proved successful in the UK. Opportunities exist for profitable overseas master franchises, but just like any for other new venture, the business opportunities should be thoroughly researched, before any decisions are made.
Being able to use the English language makes the UK popular with franchisors from the USA and Australia;
the UK offers a generally benign environment for overseas franchise owners to expand their franchised operations;
master franchises overseas offer good prospects to British master franchisees looking to expand their businesses;
issues regarding language and levels of bureaucracy need to be addressed fully in order to ensure the success of an overseas master franchise.