Air Stream Consultants Start Meetings For Our//Space Malaysia

The franchise laws in Malaysia are unique in many ways and we advise any franchisor to seek legal advice before making a start. The Franchise Act (FA) is one that allows regulators to add to a franchise territory size, prevent new companies from entering the market and seeks compensation from a franchisor who does not renew a franchisees agreement.

Although the FA does not expressly restrict the manner in which a franchisor recruits franchisees or selects its suppliers, the government does exercise some form of control and impose certain conditions (when granting its approval during the approval application/registration process). For instance, if the territorial area granted to a potential franchisee is considered to be too small or restrictive, the Registrar would request that the applicant to extend the territorial right to a larger area (usually by reference to a radius in km). The Registrar of Franchises would also require the franchisor to submit a list of its suppliers in granting approvals. If the franchisor has not shown profitability or healthy growth in their financial statements for the franchise business, the Registrar is likely to refuse the approval application or registration on the basis that the franchisor is not ready to sell its franchise systems to franchisees in Malaysia.

 

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Kevan Halliwell CEO Our//Space meeting Mr Yusuf from Malaysia

It might however be a case of attending a tradeshow in say Singapore and nobody can stop a Malay businessman from approaching your stand and making a master franchise enquiry.

If this does happen I would suggest you ask the prospect to come up with some answers and this is what is happening with Our Space after Air Stream had some great guys to meet after the franchise show

 

This link offers helpful IFA advice on global franchising law

 

Obligations of a franchisee

 The Relationship Structure defines the elements that will make up the detailed terms of the various contracts.

Eight Steps To Buying a Franchise

  1. We’ve broken down the franchise buying process, as you are aware, buying a franchise means you are buying a tried/tested format, whilst we’d hope that this takes the guesswork away we must say take care, before you get dazzled by the bigger bank balances of the larger corporations you must do your own due diligence.

    In theory it is presented that you can also save time and energy by not worrying about generating publicity to raise the awareness of your new venture but as much as your customers will know what to expect from a big chain, they don’t always flock to a brand name they haven’t realised has opened.

    Having an established brand, proven market and a respected system of operation means that the battle could already half won for you before you even start your first day of trading. That is if all your facts are straight and you have looked at the business plan properly. The manner of response and quality of the information you prospective franchisor gives you can be a deciding factor in your final decision to purchase the franchise from that franchisor.

    My Passion Is To Help You Find Yours

    Richard Williams UK Franchise Broker Tel 01886 880088

    Gathering as much data on the sales potential of the market/territory you are going be operating in is critical and identifying future potential will be the backbone of the business.

  2. Use every resource available including demographic data from the Office of National Statistics, Trade Associations, Local Chamber of Commerce, Local Enterprise unit, Councils for town and borough.Look at the competitive information in annual report of brand leaders and request market information from the franchisor regarding the rationale for defining a territory.
  3. Crunch the numbers on your own and test the figures as your franchisee gross margin and the relationship to the royalties compared to net margin. You simply should walkway from a franchisor asking you to pay an 8% royalty on a gross margin percent is in 20 to 30% region. Check how long you should be in business before breaking even and what this period will cost you. Factor in extra for a safety margin.
  4. The requirements regarding any PR or advertising fund will be of interest. Is the fund fully operational?  Ask about the franchisees task in the administration and use of PR and marketing fund monies.
  5. Complete in depth due diligence on the franchisor’s financial statements with a focus on the source of revenue and any positive or negative trends. As stability is important in terms of the franchisor being able to service and support its franchisees– you must check the levels and source of capital.
  6. Interview current franchisees and ask for a list of terminated franchisees. Again verify the numbers by finding out what time frame they found when getting to reach break-even. After some coughing & spluttering they will say we are slow but its all different now… Its not! Have a prepared list of questions and you then must ask each franchisee and the franchisor the same questions. Then work out the facts for yourself.
  7. Asking the franchisor if they have ever been in or are in any sort of litigation will be of help and it might be worth checking the franchisees out with a litigation type question.
  8. Insist that you meet with the CEO or managing director in order to understand their role in the day-to-day operation of the franchise. What is their strategy for growing the franchise network and what is the longer term vision and then ask what happens at the end of franchise term? Can I carry on or do I have  any restraint of trade? Would you see yourself getting on with the directors and would you be comfortable to have them in your home socially…

 

The above are some of the points to get you started, it might also be worth considering your personal passion and how your passion is aligned with your business.

 

This is about your life and the choices you make must be your own and of course you must get some good professional advisors to support you.

You would also be sensible to seek the help of a franchise broker, just like an insurance broker or a stockbroker they tend to discover your appetite and match you to the best franchise for you and your income requirements

http://airstreamconsultants.co.uk/

Global Giants

Are You a U.S. Franchisor Going Global?

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The team at Airstream Consultants seeks to enable franchisine entrepreneurs from all over the world to globalise their business from a UK strategic hub.

Airstream does this by harnessing the support, master franchisees , broker networks and experience of its team of internationally successful franchise entrepreneurs.

We are known as franchise dealmakers, we identify emerging franchise brands and accelerate the world’s franchised businesses.

Our team’s impressive international networks and track record in building successful international businesses, enables the team to identify and work with these high growth franchise businesses and then help them accelerate from a UK strategic HQ.

For more information about the team at Airstream Consultants and to see if you have a company that matches its eligibility criteria, please contact: info@airstreamconsultants.co.uk  or call +44 1886 880088 or visit airstreamconsultants.co.uk 

UK Franchise Companies – The Greatest Opportunity Ever

Every day, in every country around the world, there are franchise seekers looking for franchise business opportunities ideally supplied by UK franchisors’ products and services.

The demand is out there, you could be, Airstream Consultants (UK) Limited is set up so you can find the right master franchisee/franchisee and offer your team as much or as little support as they require.

Going Global

Richard Williams Director of International Master Franchise Sales

 

 

 

Welcome to the Franchisor World Blog

Here you will find exclusive international trade news, support and inspiration from franchise businesses thriving on the global stage. Franchisor World is the blog for TopFranchise.net and Airstream Consultants (UK) Limited.

It’s still early days, but already the campaign to take the best of British franchising overseas is cutting through and changing UK Franchisors behaviour for the first time.

Trading overseas is vital for ensuring the long term health of the UK economy. As such, HM Government has committed to support 100,000 additional UK businesses to sell their goods or services overseas by 2020.

In May 2016, we made a strategic decision to help mobilise the franchise business community to support these companies by finding great partners and combining together in launching Franchise Great Britain into new territories

The bull’s-eye target for this campaign was the group of Great British franchisors who were not open to the idea of exporting. Not because they didn’t believe it would be good for their business, but because they didn’t believe there was any overseas demand for what they offered.

At Airstream Consultants/TopFranchise.net we set out to turn this perception into reality and show franchisors see demand is out there.

Looking at US based franchisors you can see some great and more off the wall ideas doing very well in the UK/EU/Asia and Middle East.

We believe that British Franchisors are sitting on very valuable brands and these can be connected them to master franchisors matched for their business and we are here to inspire British Franchisors to take action.

Firstly, we attended every UKTI workshop, we developed TopFranchise.net with help from franchise guru Les Armitage and set up an online hub that housed  live franchise opportunities from around the globe.

Second, we set up a broker network in strategic locations around the world. a franchise operations and training support system was setup to allow fast growth with the needful support to drive business but without the usual eye-wateringly high costs usually associated with overseas expansion.

The prospect of franchising in overseas (new) markets can often feel daunting. There are many things to consider, such as how you will identify the potential franchisee or master franchise buyer for your product or service in the target market.

Which market first?

The overseas end user buyers and customers your franchisee encounter are not necessarily going to respond like those in the UK and how can we react as they vary in each country.

Even the legal aspects of franchising legislation comes up as companies often are unsure of the laws around franchising in new countries. And what about cultural business etiquette and those unwritten norms and taboos— How do you position your brand?

Our role is to help companies address these challenges.  Our International Franchise Advisors all have industry, sector or market experience in exporting your franchise.

Some have been in your position running an international franchise business or launched overseas market leaders on new continents.

By embarking on your franchise export journey, I would expect your company will quadruple in size, as your brand aims to continue expanding to new countries and this globalisation makes the domestic team feel they are apart of something great

To find out how we can help your franchise business expand overseas, please contact info@airstreamconsultants.co.uk or call 01886 880088

What is a Franchise?

In my opinion the answer could be really short, it could be said that a franchisor must have a profitable concept that is worthy of being firstly capable of duplication and secondly a teachable business transferable to investors as a master franchise as well as independent owner operating franchisees who are entrepreneurs remotely from a franchisor.

Subway Franchise

Franchise brands entering EU Markets Study Legislation

Image courtesy of Mister GC at FreeDigitalPhotos.net

This simplistic approach is quite enough to get you into franchising and frankly you would be well advised to pay heed to the EU Franchising legislation.

Of course you are only interested in EU franchise legislation if EU countries are a target market for you to either expand your franchise into or if you are an investor seeking to buy a brand.

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European Code of Ethics for Franchising.

Image courtesy of Rawich at FreeDigitalPhotos.net

 

The EU Franchise Code:

“Franchising is a system of marketing goods and/or services and/or technology, which is based upon a close and ongoing collaboration between legally and financially separate and independent undertakings, the Franchisor and its individual Franchisees, whereby the Franchisor grants its individual Franchisee the right, and imposes the obligation, to conduct a business in accordance with the Franchisor’s concept.

The right entitles and compels the individual Franchisee, in exchange for a direct or indirect financial consideration, to use the Franchisor’s trade name, and/or trade mark and /or service mark, know-how, business and technical methods, procedural system, and other industrial and /or intellectual property rights, supported by continuing provision of commercial and technical assistance, within the framework and for the term of a written franchise agreement, concluded between parties for this purpose.

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Image courtesy of Stuart Miles at FreeDigitalPhotos.net

KNOW-HOW – the description below is adapted for franchising from the definition in:
COMMISSION REGULATION (EC) No 2790/1999 of 22 December 1999 on the application of Article 81(3) of the Treaty to categories of vertical agreements and concerted practices*
*replaced in 2010 by the COMMISSION REGULATION (EU) No 330/2010 of 20 April 2010 on the application of Article 101(3) of the Treaty on the Functioning of the European Union to categories of vertical agreements and concerted practices which is accompanied by its Guidelines http://ec.europa.eu/competition/antitrust/legislation/vertical.html

Learn more:  at EFF Website or have a free consultation with Richard Williams +441886 880088

 

Note: EC Regulations 330/2010 and 2790/1999 describe intellectual property rights’ (IPRs) as including industrial property rights, KNOW HOW, copyright and neighboring rights.

“Know-how” means a body of non-patented practical information, resulting from experience and testing by the Franchisor, which is secret, substantial and identified;

-“secret” means that the know-how, as a body or in the precise configuration and assembly of its components, is not generally known or easily accessible;

EFF interpretation: ‘secret’ must not be understood in a narrow sense whereby each individual component of the know-how should be totally unknown or unobtainable outside the Franchisor’s business;

-“substantial” means that the know-how includes information which is indispensable to the franchisee for the use, sale or resale of the contract goods or services;

EFF interpretation: in particular for the presentation of goods for sale, the processing of goods in connection with the provision of services, methods of dealing with customers, and administration and financial management; the know-how is indispensable for the Franchisee because it constitutes the transfer of a tested and proven business system, devised to improve the competitive position of the Franchisee, in particular by improving the Franchisee’s performance or helping it to enter a new market .

-“identified” means that the know-how must be described in a sufficiently comprehensive manner so as to make it possible to verify that it fulfils the criteria of secrecy and substantiality ;

EFF interpretation: the description of the know-how can be set out either in the franchise agreement, in a separate document or recorded in any other appropriate form.

• In a lot of franchise literature, particular in English, the business system described above is known as “business-format franchising”. Other languages use the terms “formula” or “system” in reference to format.

Source of the following description: Martin Mendelsohn, “Franchising Law”, Kluwer, 2004

“Business format franchising” is a type of commercial relationship based on a contractual agreement between two independent business parties, the franchisor (the seller of the business proposition) and the franchisee (the buyer of the business proposition), in which the franchisor grants the franchisee, for the term of the contract, the right to buy and operate the franchisor’s branded and formatted business system for a fee and according to the prescribed rules and procedures developed for the system by the franchisor.

The franchisor’s “business format franchise” necessarily comprises the following 5 essential elements:
1. A brand name (registered as a brand name and/or a trademark, etc.) which serves as the umbrella sign for the network, and a rallying sign for the consumer and public,
2. a licence to the use the brand, granted to the franchisee by the franchisor,
3. a business system – a business concept formatted into a duplicable value “package” founded on the franchisor’s tested Know How and his continued assistance during the term of the agreement,
4. payment by the franchisee of a financial consideration, either in a direct form, such as an entrance fee and/or a continuing fee (“royalty”), and/or an indirect form such as a mark-up on supplied goods,
5. the investment in, and ownership of, the assets of the franchised business by the franchisee. See more at European Franchise Federation 

Are you looking to franchise into Europe?

Get in touch with an Airstream Consultant