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Researching a Franchise

Investing in a Foreign Franchise

What to know when researching a franchise based outside of South Africa.

Jeff Elgin




Investing in a foreign-based franchiseposes an exciting business dynamic, as it gives franchisees a fantastic way totake advantage of business concepts that may not exist in the domestic marketor that have a unique twist. That said, this dynamic also raises a number ofquestions in the minds of many prospective franchisees. Some of the most commonquestions one hears in relation to foreign-based franchises include:

1.How safe is investing with a foreign-based franchise?

The same disclosure requirements that applyto a domestic franchise also apply to any foreign company that comes into South Africa tooffer franchise opportunities. The franchise must provide you with a fulldisclosure document containing information on key mandated factors. They arealso subject to the same consumer protection rules in terms of their behaviourduring the process of selling their franchise. Also, you can use the Internetto find out information about any company anywhere in the world. Mostprospective franchisees don’t find any significant difference in the researchprocess of a foreign-based franchise company compared to any other, so the factthat they are foreign-based should not, in and of itself, affect your risk in anegative way.

2.What corporate structure do foreign-based franchises typically use in the newcountry?

Most successful international franchises,in either direction, use a “master licensing” arrangement. In this scenario,the franchisor finds a domestic partner that they contractually agree willdevelop the franchise in the selected country. In the case of foreign-basedfranchises, this is the most typical structure we see. The foreign-basedcompany will research the franchise business in the new country, then interviewand select a master licensee that will own and control the franchise rights inthis market. The foreign-based company may own some percentage of this entityor may simply require the entity to pay it fixed or variable fees in exchangefor the development rights. The most common alternative to this structure isfor the foreign-based company to create a wholly-owned subsidiary in the newcountry and then hire local employees to run the operation.

3.What extra research do I need to undertake?

It’s always a good idea to check out thetrack record of any franchise company in relation to their past results. In thecase of foreign-based franchises, you effectively have two companies you shouldresearch: the local master licensee and the foreign-based main franchisecompany. In relation to the local master, you want to make sure you have atrack record of performance sufficient to demonstrate that they know what theyare doing and can help you to be successful. You also need to know that theyare strong enough financially to last and support your efforts long term. Inrelation to the foreign-based franchise company, you may want to gatheradditional information about the franchisor’s operations in other foreigncountries to see how well they follow the standards and values you’re used toin South Africa.Also check on the financial strength of the parent company in case the masterlicensee in the South Africaencounters difficulty and needs to be supported in some manner by the parentcompany.

The benefits of investing in a foreign-based franchise

Thebenefits are many and in some respects are similar to those associated withbuying into any franchised business. Perhaps most obvious is the fact that thebusiness is established and has a model that has been proven to work.Franchises with an international footprint and the proliferation of branchesthat come with it, generally have systems that have been extremely well tested.In many instances, you will be able to leverage the credibility of aninternationally recognised brand and use it to build partnerships and attractclientele. As a local franchisee, you can draw on the collective strength,experience and expertise of a global group with a track record.

4.What if I am the first South African franchisee?

There’s an old adage used in relation tosmart money investing in franchises: “When in doubt, send a scout.” The simplefact is that being the first franchisee, or even part of the first group offranchisees, in any system under any circumstances always involves far morerisk than waiting until later. No matter how much experience a franchisor haselsewhere, each country they go into is different. Until they are tested in thereal world, the company simply doesn’t know how well their operating systems,marketing, training and brand are going to work. If you do decide to be a testsubject for them in their new South African operation, one advantage you may haverelates to bargaining power. The very least you should do is negotiate for someform of an early bird discount of costs, such as the initial franchise fee (oreven better – a large special marketing test allowance paid for by thefranchisor). This approach will help you, but it still doesn’t change the factthat you will be entering the business with a fair degree of uncertainty.

What are the red flags I should be on thelookout for with a foreign-based franchise company? There is really just one,and that involves the transition of their opportunity into a different culture.There are many examples of U.S.-based franchises that have struggled when theytook their concepts to a foreign country because of cultural or languagebarriers. Make sure you have taken this into consideration prior to making anyinvestment. If the company has not been operating in the domestic South Africanmarket long enough to prove the effectiveness of their concept, you haveexactly the same risk as with any other startup franchise – you don’t know forsure that it’s going to work well and should therefore be cautious.

One final piece of advice: When in doubtabout anything, ask the franchisor. Don’t be bashful about this, since theyhave probably been asked the same thing by many others before you and shouldhave the answers to your tough questions all ready to go. Research thoroughly,take the time to do this right, and you should be fine.

Some Drawbacks

A newbusiness idea may allow you a unique opportunity to establish a foothold in themarket, but it often means educating the consumer about an entirely new productor service category. Word about trends that are well known overseas may nothave reached our shores yet and it will be up to the local representatives ofthe international franchisor to build the brand and increase awareness aboutwhat the new market category has to offer. This typically requires a bigmarketing budget so it’s critical to ask probing questions about the company’splans for marketing and concept roll-out. Is the local franchisorrepresentative committed to educating the market or is that something you asthe franchisee will be expected to do? If so, what kind of marketing materialwill you be provided with and what back-end support systems are in place toassist you? Another factor to consider is fees. If the franchise fees arepayable in foreign currency, you will need to factor a fluctuating exchangerate into your planning, something that can have enormous and ongoingimplications for your business.

Jeff Elgin has developed a consulting system that matches pre-screened, high-quality prospective franchisees with the franchise opportunities that best fit their personal profile.

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Researching a Franchise

The Digital Headaches Of A Franchise Marketing Team

Here are my top 5 tools that can help control and regulate franchisees marketing with minimum friction.

JG Bezuidenhout




Franchise marketing teams already know that managing campaigns for a business with multiple locations and/or stores is a time-consuming job.

When it comes to online marketing, many franchisees are frustrated with the mother brands’ national campaign strategy, as it may not suit their immediate needs. This often means they embark down the dangerous route of “rogue” or unapproved campaigns.

This is a huge risk for any brand as there is limited to no control over the message and quality of creative, often resulting in brand CI and best practices not being followed.

Rogue advertising can be totally avoided by a franchises’ marketing team by employing tools that allow them to set up a managed process where franchisees can advertise through. With a managed approval process (preferably automated) it is easier to manage “rouge” content.

Here are my top 5 tools that can help control and regulate franchisees marketing with minimum friction.

1. Create a consistent Facebook content experience whilst still allowing your franchisees to post to their own page

Facebook location pages makes it possible to, as an alternative, allow every store to open a Facebook page, each with different versions of your logo as their profile picture, as well as incomplete profile data or even old or past promotions as their cover image. You as a brand manager can set up each store as a location page on the brand’s main FB page.

The pages can all be linked to the main page and if you change the profile image or cover art, it will automatically update all the other pages. There are also a number of other marketing advantages to this, but most importantly for me was the ability to manage them all from a single interface and clean up all the old and abandoned pages that just confused customers.

2. Manage social media content

Gain is extremely simple to use and connected to all the popular social media platforms such as Facebook, Twitter, LinkedIn etc. As a user, you can create posts or ads and schedule them all from the same window. Once said posts are scheduled, the marketing team can preview the content and approve it for publication or request changes all within a matter of seconds.  Best of all, nothing will get posted without your approval.

3. Free professional looking content in a template

Pablo is an old favourite of mine! It supplies predefined size templates where a user can use free professional stock photos and quickly overlay text. The feature I love most on this tool is the “insert logo” feature, which with the click of a button can overlay a banner or brand element that creates consistent content experiences. Once done, you can export the image and post it to gain for approval. Simple right!

4. Create email alerts for when your brand is found online

Talk Walker alerts is a nifty tool and acts like your personal internet detective who constantly crawls the internet for keywords that you define. I like to use my clients’ brand names and sometimes even my competitors just to keep tabs on their activity. Once set up, you receive daily emails with links to the content in question.

5. Pre-approved marketing creatives and targeting with machine learning optimisation

Lead Gener8or tool can define a bespoke target audience per store and lock advertising geographical areas to prevent any cannibalisation. Once completed, franchisees can execute pre-approved marketing campaigns as and when they wish on any of the integrated channels (SMS, Email, Facebook, Google and Youtube), without any further involvement required from the marketing team.

Powered by big-data machine learning, campaigns are automatically optimised while in flight. Marketing teams can monitor all campaigns in real time. This tool really is a game changer for franchise marketing teams and brand managers.

With these tools correctly implemented into your business, the digital headache of your franchise’s marketing team can subside and focus on what you do best, delivering results!

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Company Posts

Choose A Job You Love, And You Will Never Have To Work A Day In Your Life

Join Col’Cacchio’s 26-year-long love story.





Vital Stats

  • Joining fee: R125 000
  • Monthly management fee: 6% of turnover
  • Monthly marketing fee: 2% of turnover
  • Total investment: approx. R2.5m to R4.2m (turnkey) Size: 140m2 to 350m2
  • Unencumbered cash (before loan): 50% of total investment

(Above figures exclude VAT) 

“Owning your own restaurant is like owning your own future.” – Dominic Dempers, Franchisee Durbanville, Belvedere & Meadowridge Cape Town

We’re looking for passionate franchisees who will love our brand as much as we do.

Why you should join this delicious success story


  • Assistance with site selection & lease negotiation
  • Store design & build
  • Full training provided for management and staff
  • Marketing & operational support
  • Product innovation & menu development
  • Efficiency in all systems
  • Healthy margins.

Related: 300 Business Ideas To Inspire You Into Entrepreneurship


“Our journey started with a single restaurant on the foreshore with the aim to serve the very best pizza around” – Greg Mommsen, Business Development Director

“Watching this brand grow and empowering people has been immensely rewarding. We have staff that have been with us for over 20 years. It’s like a family, we work hard, we laugh, we cry, we celebrate and of course, we eat a lot of pizza.” – Michael Terespolsky, Founder and Managing Director

“Becoming a franchisee is an amazing opportunity to join the family and become part of the Col’Cacchio success story. We’re 100% behind out franchises at every step, making sure that we all continue to learn and flourish” – Greg Mommsen, Business Development Director

“It has been filled with challenges along the way, but all the rewards have made every moment worth it.” – Michael Terespolsky, Founder and Managing Director

Related: Got An Awesome New Business Idea? Here’s What To Do Next

Visit or call Tarryn Godley on 084 800 7264 and let’s get this adventure going.

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Company Posts

Smoothie Franchise Opportunity: Puré Frooty Is A One-Of-A-Kind Smoothie Franchise Business

Looking for the next greatest franchise opportunity? Puré Frooty Smoothie is a highly perfected Australian business model launching in the South African market that doesn’t require extensive shop fitting or a large workforce.

Pure Frooty Smoothie




Vital Stats

Puré Frooty Smoothie is a unique business model to the South African market. A delicious, fruit filled smoothie will be created at the touch of a few buttons.

An Innovative Franchising Concept

This innovation in the healthy smoothie industry is ground breaking for South Africa. The machine is manufactured in Australia by a highly skilled team. It took six years to perfect this business model for the consumer market.

The vision of Puré Frooty Smoothie is to offer convenient on-the-go smoothies for anyone. The experience and quality will always be of the highest standard. We aim to be a staple convenience in malls, schools, office parks and hospitals. This is a platform that will allow for self-growth for passionate entrepreneurs.

Our mission is to create a unique customer experience. We want to satisfy the nutritional needs of customers by providing quality smoothies. Puré Frooty Smoothie will be packed with all the goodness a smoothie should offer.

Related: Why Your Franchise Should Adopt A Shared Value Business Model

The four values we pride ourselves in are:

  1. Convenience
  2. Consistency
  3. Quality
  4. Customer Satisfaction.

Why Consider This Franchising Opportunity


Extensive research into the business model and market

Puré Frooty Smoothie was an idea, researched widely, by people looking to simplify the business process for the consumer and business owner. There was a gap in the market for simplified customer service and a demand for a quicker turnaround time.

Simplified process for setting up a business

For an entrepreneur it can be very overwhelming to start or buy a new or existing business. There are so many crucial decisions that need to be made from the beginning and new concepts to adapt to.

Puré Frooty Smoothie simplifies that drastically:

  • Free-standing machines: The business model revolves around a free-standing vending machine which needs to be visited to refill and maintenance.
  • No shop-fitting required: There is no need for shop fittings or a large work force. All that is required is an inside space for the machine with a power supply.
  • Minimal human resources needed: In terms of a work force, you could either do it yourself or have one person to assist you. There is also a part time involvement where refill station teams can refill and maintain the machine.
  • Cashless business: The business is completely cashless so there are no worries of a note jam, full cash canister or insufficient denomination rand values. More importantly the machines would do a higher turnover than an ordinary vending machine so safety of no cash is important.
  • Easy tracking of stock and performance: A cloud-based system is linked to the point of sale which allows you to monitor your performance and stock from the back-office platform at any given time.
  • Efficient handling of maintenance: With a live point of sale system, the business is linked to a software which monitors the operations of the machine. Should anything malfunction an immediate notification will be sent with a diagnostics report.
  • Human error is eliminated: Everything is done with a computer which leaves little to no room for errors. It is self-order and very user friendly.

Related: SA Fast Food Franchising On The Rise

Why Will Customers Love It

Puré Frooty Smoothie offers a vending machine that can produce a delicious smoothie in forty seconds. An informative touch screen ordering panel which displays all the nutritional information of the smoothie ordered and has the current news and weather.

No time wasted for the consumer. In fact, it’s a learning session disguised as a waiting period. The machine has two wash cycles after every smoothie is made to be freshly prepared for the next smoothie, business hygiene is important.

Consumers live in the fast lane. We are looking for something quick and most times we would like to be healthier. With the hustle and bustle of today’s life every little bit helps. Puré Frooty Smoothie fills that gap in the market.

Interested in Becoming A Franchisee?

Visit our Franchise Info Page for everything you need to know about how to become information a Puré Frooty Smoothie Franchisee owner.

You can also call or write to us:

Phone / 012-942 6360
Email / 

Want to know more about this franchise? Watch the video below for more.



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