Franchise Update Magazine Issue IV, 2016 | Page 65
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GROWING
Frandcahte
up
UPDA
William Edwards, CEO of EGS LLC, has 40
years of international business experience.
He has lived in 7 countries, worked on projects in more than 60, and has advised more
than 50 U.S. companies on international development. Contact him at 949-375-1896,
[email protected], or read his blog
at edwardsglobal.com/blog
BUSINESS INTELLIGENCE FOR
CHISE
Big picture
Master franchising remains the prevalent
type of franchise model in most of the
world, except for the food and beverage
sector where area franchising remains the
model. An area franchise is one where the
local franchisee builds, owns, and operates
all the units of the franchisor in a country.
This requires a much higher level of capital
than master franchising.
Food and beverage franchises typically
seek multi-unit franchisees in the U.S.,
and this has begun to happen in Europe.
Franchise Update Media will hold the first
multi-unit franchise conference in Europe
in early December in Florence, Italy. Again,
a sign of the times. n
Franchise
updateise
FRAN
franchises in Kenya and South Africa. But
the economies, unemployment, and political situations are barriers to finding investors. Nigeria is going through economic
challenges that may limit new franchise
development in 2017.
Middle East
Given the political turmoil and today’s
low oil prices, the Middle East would
seem a place where there would be little
interest in new franchise development.
There is no doubt that the price of oil,
much lower than just 1 or 2 years ago,
has diminished new investment in countries like Kuwait, Saudi Arabia, and the
United Arab Emirates. But there remain
companies that think 3 to 5 years out and
are still investing in new brands. New
franchise investment in the Middle East
is lower than 2 to 3 years ago and is limited to these countries. Food and beverage
franchises are still the primary interest,
40 years after the first U.S. burger brands
entered these countries.
Turkey has seen good foreign franchise
investment in the past five years. Unfortunately with the unrest in Syria and internal political changes, Turkish companies
have recently become reluctant to develop
new brands. History says this will change
in the future.
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