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Our work in the area of ​​Franchises and Distribution, leads us to assist and advise, both judicially and extrajudicially, to numerous franchising companies and also franchisees, having been part of the Committee of Legal Experts of the Spanish Association of Franchisors and having carried out the Legal Advice of the Aragonese Association of Franchisors.

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"Office of the year in Spain in Right of Distribution and Franchising"

Office of the year in Spain in Right of Distribution and Franchising

The internationalization of franchises as a strategy to take your company abroad

The internationalization of franchises as a strategy to take your company abroad

Published in Murcia Economía , 25 - March , 2021 abogados franquicias Overview franchises

When you want to internationalize your business you need to choose a precise strategy. You have to know your company well and the characteristics of the market segment in which you want to operate. Depending on that and on multiple factors, we are presented with various tools to make the leap abroad and that we will have to choose carefully:

1. Export The most common strategy to internationalize a company is undoubtedly the export of goods or services. The company may be directly involved in the process (direct exports) or have a commercial intermediary who negotiates and distributes its product abroad (indirect exports). Indirect exports are the least demanding, but also the most precarious of all internationalization strategies. Precisely because they are not directly related to the market or the final consumer compared to direct exports, which imply a higher level of involvement, especially in economic terms.

2. Foreign direct investment (FDI)

Acquire a company abroad.

Another strategy to reach other markets is direct investment in the partial or total acquisition of a company that already operates abroad).

 

Despite the high costs, this alternative can enjoy a reduction in the risks of entering a new country: investing in a company that already operates abroad minimizes the risk of implementation and you can rely on the skills and knowledge of the existing. 

 

Another type of direct investment is the opening of a subsidiary abroad.

Although it can be more expensive, if it is markets that present a good opportunity it can be very interesting.

3. Licensing Agreement Licensing is an international agreement in which two or more parties agree that the licensee, subject to the payment of royalties, can use the resource owned by the licensor for a specified period, acting as a partner in the new market. The main disadvantage is that a foreign company is not part of the parent company. Therefore, there is a risk that the licensee will become a competitor if the license agreement expires.

4. Create a joint venture with a local A joint venture is a partnership between two or more companies for a specified period with a common purpose, in which the partners share capital, management, profit or loss, and know-how. This strategy can be interesting to internationalize a company with the support of a partner who already knows the foreign market.

5. Establish a franchise The franchise is a combination of resources and capabilities to achieve a strategic marketing, distribution and sales objective for a company. Typically, it involves a franchisor granting an individual or company (the franchisee) the right to run a business by selling a product or service under the franchisor's successful business model and identified by the franchisor's trademark or trademark. The franchisor collects an initial fee in advance from the franchisee, payable at the time the franchise agreement is signed. Other fees, such as marketing, advertising, or royalties, may apply and are largely based on how the contract is negotiated and established. The franchisor makes advertising, training and other support services available.

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La internacionalización de franquicias como estrategia para llevar tu empresa al exterior
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