Global Brand Exposure Focus Reading »

Starting a business is only the tip of the iceberg. The real thrill and challenge lies in developing the business into a brand that constitutes the actual mass beneath the surface. Building a brand requires looking beyond territorial limitations and adopting a global perspective. Most small and midsize business entrepreneurs consider breaking into the global marketplace as venturing into unchartered territories. This perception often restricts the entrepreneurs, making them hesitant to open their business to global exposure. This, in turn, limits the business from reaching its true potential and attaining excellence, which is imperative for becoming a well-known brand.   

Building a Global Brand

One of the world’s best known franchises include McDonalds, which would have been just another burger joint had it not been for the fact that you can find one in every corner of the world.

The company, which started out as a single eatery in 1927 succeeded in becoming a popular global brand by pursuing smart initiatives in global franchising. The benefits of a franchise business model are undeniable, which predominantly helps to overcome the cost-prohibitive constraints of operating at a global scale.

Franchise Agreement: What it Entails

Entering a franchise agreement with independent entrepreneurs will help you to duplicate your business model around the world without duplicating efforts. Taking this recourse will also enable you, as a franchisor, to share your risk with multiple franchisees and earn fixed revenues in the form of:

Franchise fee: This is typically a one-time charge levied on prospective franchisees, in exchange for obtaining a license to operate in the name of your business. Depending on the franchise agreement, you may also recover the cost of:

• Rent
• Building
• Equipment and
• initial inventory as franchise fee

Royalty payments: This is charged on a weekly or monthly basis at a predetermined rate, depending on the individual franchisees’ gross income. Typically, royalty payments are charged for providing technical assistance and market exposure to the franchisees. However, you are entitled to them even in the absence of such aids through the entire duration of the franchise agreement.

While attempting global franchising, consider legal methods to avoid import and export duties from and to a specific country. To identify such avenues and gain a clear advantage, it is vital to continually evaluate the provisions of different trade programs, both national and international.