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Conclusion

The lure of international markets for U.S. franchisors is understandable. Huge market potential driven by populations far exceeding U.S. totals, more open borders than ever and more ubiquitous communication of brands can mean vastly increased growth. However, there is no risk-free approach to entering a foreign country from a U.S. base. The lure of up-front fees and support-free royalties is an illusion. A failed franchise effort in a foreign country may very well have far-reaching negative brand implications, truncate future international expansion, and result in litigation. A Franchise relationship Model Approach will ensure a disciplined due diligence and a more accurate assessment of the risk-return scenarios.

Further Reading

Mendelsohn, Martin and Brennan, Michael. The International Encyclopedia of Franchising. London: Kluwer Law International, 1999.


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