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Ridiculous Franchising Rules in Other Countries

Many of the United States best trading partners put up barriers to entry as American companies try to import their goods and services into those countries. This is rather a shame, and it is quite short sided. These nations put up trade barriers destroying the win-win situation that free trade opens up in the global marketplace.
If we buy from their nation, and they buy from our nation, the money keeps going around in circles faster and faster and everyone does better; that is a definite win-win and that's why free trade works. But free trade only works if it is free and fair, and unfortunately, in the franchising industry it hasn't actually been a level playing field and I'd like to explain.
Many nations have ridiculous rules when it comes to franchising in their country, especially when it comes to foreign partners. Many Asian nations will not let you franchise in their country right away. Rather, they want you to prove that your business is actually viable before you sell it to anyone in our country. They also do not want American franchise systems which are superior in efficiency to knock out all their small businesses in that country.
However, the reality is that franchises are owned by local business people and only the royalties are going to the franchisor and come back to the United States. In turn it helps the local economy with more efficient businesses, lower prices, better competition, and more employment. It also provides more taxation revenue for those nations.
Thus, they actually do better when there are American franchises within their country. Plus, other businesses learn from these efficiencies, and all small businesses do better therefore, creating more wealth, cycling more money, creating more tax revenues, and this all becomes a path to economic prosperity.
Recently, I was looking at one of the Asian countries, which has a franchising rule for foreign corporations; A franchisor cannot sell franchises until they have operated in the nation for 2-years and that business has been successful. Meanwhile, they must also have a native born citizen partner to start a business in the first place. And in many nations it takes two years just to get a business license. Therefore, if a franchisor wishes to become franchisor in some of these Asian countries, it takes four years to get going, that's just a start.
Meanwhile, often their trademarks are hijacked, their business models are stolen, and it becomes a lose-lose situation, rather than a win-win situation for both the franchisor, the United States trade deficit, and the nation in question along with all the benefits that franchising system might have brought to the country. It is for this reason many companies opt out, and are even rude to franchise buyers in these types of country. This hurts international business. Indeed, I hope you please consider this.
Lance Winslow is a retired Founder of a Nationwide Franchise Chain, and now runs the Online Think Tank. Lance Winslow believes in international franchising to help national economies.

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