on about the business of doing business. But to be successful it ... substantial adaptation be needed? ... license it is
Geopolitical Tensions in 2017? Bill Edwards, CEO, Edwards Global Services, Inc. Whether it is BREXIT, the Trump presidency, populism and nationalism in the European Union trade agreements, China or various wars, one might think 2017 would be a difficult year to find international buyers for US products and services around the world. In fact, business people around the world turn out to be very pragmatic and tend to get on about the business of doing business. But to be successful it is important to look out for the political meltdowns, economic disasters and wars and unrest. And the go to countries that do not have these conditions. Our company will be active in 21 countries in 2017 for the 10 U.S. food and beverage, retail and service sector franchise brands we help ‘Go Global’ through licensing their businesses to companies in other countries. What follows largely applies to all companies seeking to enter new countries into 2017. Over 40 years of doing international business across many industry sectors and in 68 countries informs that a U.S. company should consider these eight factors when deciding where to take their business in 2017. Rule of Law – Will you be able to enforce the terms of your license agreement and get back the rights to your brand if there is a problem with the licensee? Country Stability – Are the politics and economics of the country stable so that a development plan can be realized? IP Protection – Will your brand logo and other intellectual property be protected and remain the sole property of your company? Good Annual GDP Growth = Investors – A recent World Bank study showed that if there is real annual Gross Domestic Product (GDP) growth of 4% or more there will be considerable new business development in a country. Your Consumer Market Size – Is there a sufficient consumer base who can and will want to pay for the products and/or services of your franchise? Culture – Will your product and/or service be acceptable in the country or will substantial adaptation be needed?
Recipient of the US Presidential “E” and “E” Star Award for Excellence in Exporting
Ability To Get Paid – Will you be able to get paid initial and on-going fees and royalties in a timely manner? Investment Risk – As the U.S. company is investing time and money into a country license it is wise to consider the perceived risk of doing business in a country. AON Risk Solutions and Eules Hermes publish periodic reports that rank countries as to the risk of doing business in a country. As a license in a country can be a 10-20 year ‘investment’ it is important to consider how the country is perceived as a place to invest. Ease Of Doing Business – The World Bank annually publishes the ‘Ease of Doing Business Index’ that ranks 190 countries on 10 factors key to doing business in the country. What Are The Best Countries For U.S. Franchise Companies in 2017? Considering a wide variety of business, political and economic parameters as well as on the ground market research, the following countries are expected to see good to excellent new U.S. franchise license development in 2017: The Dominican Republic - new interest in US franchise investments Japan - Large corporations are seeking large consumer franchises Peru – New pro-business government, US franchise brand friendly The Philippines - Many new US F&B franchises opening Poland - High GDP growth, open to international brands Viet Nam - 6%+ GDP growth, F&B franchises desired Spain - Recovery speeding up, new franchise investment happening Thailand - Starting a comeback from post-coup recession The United Arab Emirates – Many new international franchise brands opening Countries normally good for franchise development that will be challenging in 2017 are: Brazil - Economy is stalled, inflation up, government problems Chile – 1.8% GDP growth, government regulations and business taxation increasing Mexico - Post US election new investment slowdown China – There is move towards local Chinese franchise brands Turkey - Political unrest and terrorism = little new investment by local companies
In Summary Research the details of each country to ensure the conditions are right for new franchise investment
Focus on countries that have the highest ROI for your specific business Determine the level of investment risk your company finds comfortable Find and use the best and most cost effective international development resources Be prepared to change country priorities if internal situations change Find the right licensees to build a long-term revenue stream for your business
ABOUT THE AUTHOR An executive with over 40 years of international operations, development, executive and entrepreneurial experience, Mr. Edwards has lived in China, the Czech Republic, Hong Kong, Indonesia, Iran, Turkey and the USA. He has directed projects on-site in Alaska, Asia, Eastern Europe and the Near East and worked on projects in 68 countries. Mr. Edwards has experience in the oil and gas, information technology, management consulting and licensing sectors. Since 2001, EGS has published the GlobalVue™ country ranking survey on a quarterly basis. In 2015, he received the U.S. President’s Award for Export Excellence. Contact him on +1 949 375 1896 or at
[email protected] 