How to Enter a Country the
Second Time Around
Peter D. Holt
Chief Operating Officer
Tasti D-Lite LLC
My Background
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Worked at the International Franchise Association (in membership and then
created the international division for IFA)
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Developed and ultimately led the international division for I Can’t Believe It’s
Yogurt and Java Coast Fine Coffees
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Led the International Division, Domestic Franchise Sales, Retail Center
Design, and Real Estate for Mail Boxes Etc.
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Led the US development of 24seven Vending, A New Zealand based publicly
traded franchisor
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Executive in Residence for the private equity fund, Great Hill Partners
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Currently, COO for Tasti D-Lite, LLC, the number one New York City frozen
dairy dessert concept that possesses lower caloric and fat content than
traditional ice cream offerings and presents an opportunity develop the
business into the number-one ‘better-for-you’ frozen dessert to the world.
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Over 20 years of making mistakes in building franchise systems in the US and
overseas!
Topics Covered
• We’re international! Now what? (the
most important decision that you will
make to prevent that second time)
• How to maintain growth and vitality
internationally to avoid a second time
• Problems faced…solutions offered
Most Important Decision!
• Pick the right partner!
• How to select the right master licensee
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Shared vision & values
Personal commitment
Leadership & management skills
Resources: financial, etc.
Related business experience
Local retail knowledge
• The process is the qualifier
Managing Expectations
• Proper planning & management of
expectations reduces many potentially
damaging problems
– Expectations for initial investment &
operating capital requirements
– Expectations for break-even and ROI timing
– Expectations for difficulty and timecommitment
– Clear roles and responsibilities
What Not To Do (Training):
• Training ML as a USA unit franchisee
• Little or no international training &
collateral
• Not understanding the different
business model with different training
needs
• Little or no international dedicated
corporate staff
What To Do (Training):
• Complete documentation of training &
operations manuals
• Structured international curriculum
– Mission, vision, values & corporate culture
– Setting expectations
– Roles & responsibilities
What To Do (Training):
• Training on how to be a franchisor
• Infrastructure required & how it changes over time
– ML management team & growth
– Vendor negotiations & relations
– Legal issues and agreements
• Network development
– Goal setting, budget & HR planning
– Lead generation
– Franchise sales process
– Site selection & lease negotiation
What Not To Do (Support)
• Limited communications and country
visits
• Challenges created:
– Low level of information &
understanding
– Deviation from the business model
– Late discovery of problems
– Difficulty influencing solutions
What To Do (Support):
• Dedicated international support staff:
– Operations support staff (with regional
assignments)
– Company-wide department support
• Contractual commitment to 2 visits to territory/year alternating cost basis
– Post-training visit: infrastructure & lead generation
– Pilot Center grand opening
– Training of first franchisees
– Ongoing support for development & assistance
What To Do (Support):
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High level of communication
Annual master franchisee conference
Global annual conventions
Surveys & feedback
Web based international marketing & training support
Master licensee visitations to HQ franchisor
Best practices and benchmarking
What To Do (Support):
• Hold master licensees accountable to
reasonable performance requirements
• Recognize & reward performance achievements
• Deal fairly & consistently with performance
deficiencies
• High level of communication & involvement
Are the Challenges
Controllable?
Uncontrollable Challenges
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Fluctuations in the economy
Political instability
Regulatory changes
Environmental challenges
Broad changes in the market
Only Solution to Dealing with
Uncontrollable Challenges
• If the vision, commitment and capabilities remain in
tact - mutual openness, flexibility and an effort
towards mutually acceptable solutions is key
• Modification to performance requirements
Dealing with Controllable Challenges
• Ownership issues
• Management issues
• Business performance issues
Dealing with Controllable Challenges
• Ownership issues
– Facilitate redistribution of ownership
interests among current
partners/shareholders
– Assist in finding new partners/shareholders
– Assist in finding and transferring ownership
to entirely new principal(s)
Dealing with Controllable Challenges
• Management issues
– Assist in identifying specific
management issue
– Provide further training, support and
consultation
– Assist in changing management
personnel
Dealing with Controllable Challenges
• Business performance issues
– Analyze business operations and
financials to identify problem areas
– Directly resolve problem area, if
possible
– If not possible, look at other areas to
offset problem
No solution to the challenge
• Abandon the market
• Determine that the asset is not worth
saving
• If there are franchisees allow them to go
independent
• Implement de-identification program
No solution to the challenge
• Determine the asset is worth saving
• Take over and run the operations!
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Huge investment on every level
Requires total support from HQ
Requires level management direct supervision
Learning curve of how to run a business
outside of your home market is massive
No solution to the challenge
• Convert existing franchisees to
license a license agreement and
concurrently aggressively seek new
master franchisee
• Meet with all franchisees explaining change
• Require licensees to convert when new master
franchise agreement is in place
Summary
• The building of international franchised retail business
is one of the most challenging, exciting and rewarding
opportunities that you may experience.
• The key to successful international franchising is to
keep all the parties focused on the management of the
relationship and the fundamentals of the business.
• When things go wrong, aggressively respond to the
problem working creatively and in good faith to find the
alternative solutions.
Thank you!
Peter D. Holt
Tasti D-Lite, LLC
Email: pholt@tastidlite.com
Tel: (615) 550-3012 ext. 11