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FRANCHISING INDUSTRY a Reference for U.S FRANCHISING INDUSTRY A Reference for U.S. Exporters Franchising Resource Guide | 2018 1 2 U.S. Commercial Service 2018 Edition FRANCHISING INDUSTRY A Reference for U.S. Exporters Franchising Resource Guide | 2018 3 4 U.S. Commercial Service Table of Contents Introduction...................................................................................................... 1 Market Briefs.................................................................................................... 4 Australia.................................... 5 Honduras.............................. 38 Nigeria........................... 74 Austria....................................... 7 Hungary................................. 41 Peru............................... 76 Brazil......................................... 9 India ...................................... 43 Philippines.................... 78 Canada......................................12 Indonesia.............................. 45 Romania ....................... 82 Chile..........................................15 Israel...................................... 48 Saudi Arabia ................ 85 Colombia..................................17 Japan...................................... 51 Serbia ........................... 88 Costa Rica................................ 20 Kazakhstan............................ 53 Slovakia......................... 94 Egypt........................................ 22 Kenya..................................... 57 Spain............................. 100 El Salvador...............................24 Korea..................................... 59 Sweden......................... 104 Finland..................................... 26 Kuwait.................................... 64 Thailand....................... 107 France...................................... 30 Mexico................................... 67 Turkey........................... 110 Germany.................................. 33 Netherlands.......................... 70 UAE............................... 113 Guatemala............................... 35 New Zealand......................... 72 Ukraine......................... 117 U.S. Offices..................................................................................................... 123 Franchising Resource Guide | 2018 5 Introduction The U.S. Commercial Service’s Global Franchising Team wants to partner with you as you expand to new global markets. Our team of locally-based professionals and internationally-based specialists provide timely market insight and customized programs give you the tools needed for success. In addition, we have programs at many major trade events to help you find opportunities and meet partners. The market intelligence in the guide that follows is just one of the ways we can help your company plan to succeed in markets around the world. Connect with us through our global network of trade experts in all 50 states and over 80 international markets. Eric Johnson Global Franchising Industry Team Leader U.S. Commercial Service About the U.S. Commercial Service What Can the U.S. Commercial Service Do for You? The U.S. Commercial Service is the trade promotion arm of the U.S. Department of Commerce’s International Trade Administration. Through its network of trade experts and policy professionals in 78 markets, and all 50 states, the U.S. Commercial Service assists U.S. firms in selling their “Made in the USA” products around the world, advises them on how to use trade deals to their advantage, and helps them overcome obstacles and barriers to international expansion. How we can help your business: Our trade specialists work to address issues and trade opportunities to ensure you have the information you need to grow your business. Market Intelligence Business Matchmaking • Customized reports analyzing your • Meetings with pre-screened, vetted potential market potential, alongside your overseas partners foreign competitors • Introductions for your product or service to • Briefing materials on export financing, prospective buyers at trade events worldwide laws, and cultural issues • Meetings with industry and government • Background checks on potential buyers decision makers in your target market(s) Trade Counseling Commercial Diplomacy • Guidance on developing effective market • Direct assistance to overcome trade entry and sales strategies obstacles in international markets • Export documentation requirements and • Government-to-government engagement import regulations of foreign markets to protect your • Background on U.S. government export company’s interests controls, compliance, and trade • Advocacy support from the U.S. financing options government for your foreign government procurement bids 1 U.S. Commercial Service For more information, visit www.franchise.org. From the International Franchise Association The franchise sector is an important, yet often overlooked, component of U.S. exports. In the United States franchised business directly accounts for more than 733,000 establishments that support nearly 7.6 million direct jobs, $674.3 billion of economic output for the U.S. economy and 3 percent of Gross Domestic Product. Franchising as we know it today emerged in the U.S., but has found success across virtually every culture on Earth. Because America is the world’s most mature and sophisticated franchise market, use of the franchise model internationally is a competitive advantage for U.S. exports, agriculture, manufacturing, and supply chains. According to the U.S. Bureau of Economic Analysis, franchise fees have an overwhelmingly (34 to 1) positive impact on America’s trade balance. The international growth of franchises acts as a significant export multiplier, with many other U.S. goods and services flowing through the door opened by the franchise agreements and further driving U.S. employment. The International Franchise Association has long worked to help its members expand their brands to foreign markets, but cannot afford to open offices across the world. The U.S. Commercial Service (USCS) possesses great reach and capacity to drive US exports, but supporting franchising is seen as a challenge because the nature and process of franchise exports differ from most other direct sales of U.S. goods and services. Eventually, this convergence of strengths and needs became clear. The Commercial Service has come to rely on IFA’s franchise expertise, role as the voice of franchising, and unparalleled contacts and standing in the franchise community. IFA has come to rely on USCS’s expanse, market expertise and the standing and resources that working from US embassies and consulates provides. This alignment has produced a partnership between the International Franchise Association and the U.S. Commercial Service that goes back decades. Today the partnership is central to IFA’s international program and has been cited as the Commercial Service’s strongest and deepest relationship with a trade association. IFA is glad to support the U.S. Commercial Service’s Franchise Reference Guide and promote it to our members as an extension of our still deepening partnership. Robert Cresanti, CFE President & Chief Executive Officer International Franchise Association MARKET BRIEFS Franchising Resource Guide | 2018 4 Australia Capital: Canberra Population: 24 million GDP*: USD 1.349 trillion Currency: Australian Dollar Language: English Summary Australia has more franchising outlets per capita than any other country and three times more than the United States, but over 92 percent of franchises are Australian-developed. U.S. brands (not individual units) represent approximately five percent of the market. According to an official study by the Griffith University in Queensland, there are over 1,100 franchisors, 65,000 franchise units and 8,000 company-owned units. The franchise sector has been flourishing since the 70s with most growth occurring since the 1980s and industry commentators note that it is now very mature. The growth of new Australian systems and the expansion of existing systems have not only increased competition, but have meant the pool of quality franchisees has steadily gotten smaller. Within this climate, identifying investors and potential partners with an interest in master franchise opportunities remains a major challenge. The majority of recent market entry successes has resulted from Australian entrepreneurs actively searching out the opportunity and directly approaching the international franchisor. Industry Opportunities The Australian market is receptive to new concepts that speak to current and emerging trends. For example, Australia has an aging population and by 2020 there will be more 65 year-olds than one-year-olds. Demand for senior care services will continue to increase. It is also anticipated that older Australian generations will have an increased preference for independent living arrangements supported by community care and more affluent lifestyles. Additionally, data shows a rise in participation rates in non-competitive activities. With fewer organized sports and less time for leisure activities, the 24-hour gym concept and personal trainers are increasingly popular. Demographics Australia has the fifth highest average household net disposable income rate in the OECD. With a high level of discretionary spending, Australia is an important market for premium and luxury items. Australia’s total population in 2016 was 24 million and grew by 1.4 percent on 2015 figures. Approximately 66 percent of the population is aged
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