Franchise Explosion

What's In Style

Most franchise watchers agree that one of the biggest industry trends is the internationalization of American franchise systems. It seems overseas markets are more ravenous than ever for American products and services. From fast food to business-to-business services, American franchisors are leading the way in franchising, showing other countries how it's done.

"International expansion is so attractive because many countries are willing to pay substantial amounts for the use of a Western trademark and the training and knowledge that go with it," says Edward Kushell, president of Los Angeles-based Franchise Consulting Group.

Many experts believe the success of U.S. franchises overseas can pave the way for the further success of American companies in general. "American marketing practices are expanding around the globe and competing aggressively with European and Japanese businesses," says Selden. "The leveraging strength of franchising will give [other] American companies a real advantage in penetrating underdeveloped markets around the globe."

In addition to marketing their products and services overseas, U.S. franchisors are also seeking new avenues of distribution at home. Dual-branding, convenience stores offering branded franchise products, and combination franchises are part of another sizzling industry trend. Increasingly, noncompetitive franchisors are pairing up to offer their complementary products. Retail couples like coffee shops and bakeries are gaining popularity among a fickle crowd looking for as many options as they can get.

Proving what smaller businesses have long known-the power of franchising to grow a company-a few corporate powerhouses joined the franchising ranks in 1995. Among them were language services company Berlitz, financial services giant Dun & Bradstreet and health-club chain Bally Total Fitness.

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This article was originally published in the January 1996 print edition of Entrepreneur with the headline: Franchise Explosion.

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