Master Franchising: Strategic Planning for International Growth
9Round is one of the fastest growing brands in the fitness and franchising world. Entrepreneur Magazine’s 2017 Fastest Growing Franchises listed 9Round at number 22 and, most recently, 9Round added locations in two new countries, growing the list to over 490 locations in 11 countries. Currently, 9Round aims for 15 to 20 percent of all open locations to be in international markets. Going forward, successful entry into target markets such as India and China, and Latin and South American regions, could far exceed those percentages. So, in a world where fitness franchises are a dime a dozen, what has been the key to 9Round’s successful international expansion?
Besides having a franchise model that is affordable to own and operate, and a concept that delivers effective, 30-minute workouts to busy clients, a large part of 9Round’s global growth lies in successful master franchising in the international market. Master franchising is the strategy wherein a franchisor sells the rights to an individual to sell franchise units within a specific territory. These individuals, or “master franchisees,” are responsible for finding suitable franchisees to purchase a unit (or units) within the country that they now own. The franchise concept’s proven business model helps to attract these master franchisees to partner with the franchisor, but there are a few more factors to consider when embarking on the master franchising journey.
Identify Qualities of the Ideal Master Franchisee
Before diving into new markets and seeking out potential master franchisees, it’s necessary to establish what type of person will best fit as a master franchisee for your brand. Master franchisees will be serving as the brand ambassador of your concept in their home country, it’s important to find motivated, trustworthy people who fully understand the culture and can successfully communicate your concept to potential franchisees.
For 9Round, exemplary master franchisees don’t have to be experts in kickbox-style fitness as much as they need to possess strong business acumen, energy and enthusiasm for the brand, and the ability to build a strong support infrastructure around them. Master franchisees must have a strong understanding of sales, market development and penetration, and must be passionate about making a difference in their geographical area while generating a residual, royalty-based income stream.
Conduct Market Research
Take the time to research a country’s market to learn about its demographics, existing competition, economic strength, and demand for your services before making a concrete plan to expand there. Also consider the communication styles and customs of different countries when exploring international opportunities. Whereas you may find work and communication styles in Canada very similar to what you experience in the United States, other countries may be more reserved or have different practices when conducting business. A good master franshisee will help you understand and navigate these cultural differences.
It’s important to understand that although your business model has been molded for success in your home market, making adjustments may be necessary in order for the brand to fit into different cultures abroad. For example, 9Round locations in Saudi Arabi require a larger footprint than in the U.S. because showers are a requirement. Learn as much as possible about local customs and culture and take cues from your master franchisee to ensure success in the new market.
Build a Strategic Growth Plan
Once you’ve conducted market research and established ideal qualities to look for in a master franchisee, it’s time to create a strategic plan for growth. Compiling and finalizing a growth plan will provide you and your team with a tangible reference point as you launch your master franchising initiative. In addition to the list of targeted growth countries/markets you’ve identified, create a projected timeline for completion of crucial tasks, including:
- Scheduling initial meetings with master franchisee candidates
- Setting deadlines for when master franchising agreements should be signed
- Determining development schedule and expectations for master franchisees in new markets
- Planning travel to visit newly opened locations and support international operations
Keep in mind, a franchise’s growth plan is a fluid strategy that can fluctuate when newly targeted markets are established, and if demand for your services increase or decrease over time. When executed properly, master franchising can be a financially efficient strategy for rapid and exponential international growth. 9Round is closing in on 500 locations worldwide, and successful master franchising of international locations has been key to this fast-rising brand’s global growth.