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How to Enter a Country the Second Time Around Peter D. Holt Chief Operating Officer Tasti D-Lite LLC.

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Presentation on theme: "How to Enter a Country the Second Time Around Peter D. Holt Chief Operating Officer Tasti D-Lite LLC."— Presentation transcript:

1 How to Enter a Country the Second Time Around Peter D. Holt Chief Operating Officer Tasti D-Lite LLC

2 Worked at the International Franchise Association (in membership and then created the international division for IFA) Developed and ultimately led the international division for I Can’t Believe It’s Yogurt and Java Coast Fine Coffees Led the International Division, Domestic Franchise Sales, Retail Center Design, and Real Estate for Mail Boxes Etc. Led the US development of 24seven Vending, A New Zealand based publicly traded franchisor Executive in Residence for the private equity fund, Great Hill Partners Currently, COO for Tasti D-Lite, LLC, the number one New York City frozen dairy dessert concept that possesses lower caloric and fat content than traditional ice cream offerings and presents an opportunity develop the business into the number-one ‘better-for-you’ frozen dessert to the world. Over 20 years of making mistakes in building franchise systems in the US and overseas! My Background

3 Topics Covered We’re international! Now what? (the most important decision that you will make to prevent that second time) How to maintain growth and vitality internationally to avoid a second time Problems faced…solutions offered

4 Most Important Decision! Pick the right partner! How to select the right master licensee Shared vision & values Personal commitment Leadership & management skills Resources: financial, etc. Related business experience Local retail knowledge The process is the qualifier

5 Managing Expectations Proper planning & management of expectations reduces many potentially damaging problems –Expectations for initial investment & operating capital requirements –Expectations for break-even and ROI timing –Expectations for difficulty and time- commitment –Clear roles and responsibilities

6 What Not To Do (Training): Training ML as a USA unit franchisee Little or no international training & collateral Not understanding the different business model with different training needs Little or no international dedicated corporate staff

7 What To Do (Training): Complete documentation of training & operations manuals Structured international curriculum –Mission, vision, values & corporate culture –Setting expectations –Roles & responsibilities

8 What To Do (Training): Training on how to be a franchisor Infrastructure required & how it changes over time –ML management team & growth –Vendor negotiations & relations –Legal issues and agreements Network development –Goal setting, budget & HR planning –Lead generation –Franchise sales process –Site selection & lease negotiation

9 What Not To Do (Support) Limited communications and country visits Challenges created: –Low level of information & understanding –Deviation from the business model –Late discovery of problems –Difficulty influencing solutions

10 What To Do (Support): Dedicated international support staff: –Operations support staff (with regional assignments) –Company-wide department support Contractual commitment to 2 visits to territory/year - alternating cost basis –Post-training visit: infrastructure & lead generation –Pilot Center grand opening –Training of first franchisees –Ongoing support for development & assistance

11 What To Do (Support): High level of communication Annual master franchisee conference Global annual conventions Surveys & feedback Web based international marketing & training support Master licensee visitations to HQ franchisor Best practices and benchmarking

12 What To Do (Support): Hold master licensees accountable to reasonable performance requirements Recognize & reward performance achievements Deal fairly & consistently with performance deficiencies High level of communication & involvement

13 Are the Challenges Controllable?

14 Uncontrollable Challenges Fluctuations in the economy Political instability Regulatory changes Environmental challenges Broad changes in the market

15 Only Solution to Dealing with Uncontrollable Challenges If the vision, commitment and capabilities remain in tact - mutual openness, flexibility and an effort towards mutually acceptable solutions is key Modification to performance requirements

16 Dealing with Controllable Challenges Ownership issues Management issues Business performance issues

17 Dealing with Controllable Challenges Ownership issues –Facilitate redistribution of ownership interests among current partners/shareholders –Assist in finding new partners/shareholders –Assist in finding and transferring ownership to entirely new principal(s)

18 Dealing with Controllable Challenges Management issues –Assist in identifying specific management issue –Provide further training, support and consultation –Assist in changing management personnel

19 Dealing with Controllable Challenges Business performance issues –Analyze business operations and financials to identify problem areas –Directly resolve problem area, if possible –If not possible, look at other areas to offset problem

20 No solution to the challenge Abandon the market Determine that the asset is not worth saving If there are franchisees allow them to go independent Implement de-identification program

21 No solution to the challenge Determine the asset is worth saving Take over and run the operations! Huge investment on every level Requires total support from HQ Requires level management direct supervision Learning curve of how to run a business outside of your home market is massive

22 No solution to the challenge Convert existing franchisees to license a license agreement and concurrently aggressively seek new master franchisee Meet with all franchisees explaining change Require licensees to convert when new master franchise agreement is in place

23 Summary The building of international franchised retail business is one of the most challenging, exciting and rewarding opportunities that you may experience. The key to successful international franchising is to keep all the parties focused on the management of the relationship and the fundamentals of the business. When things go wrong, aggressively respond to the problem working creatively and in good faith to find the alternative solutions.

24 Thank you! Peter D. Holt Tasti D-Lite, LLC Email: pholt@tastidlite.com Tel: (615) 550-3012 ext. 11


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