Global Franchise Expansion:

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• Global Franchise Expansion
• Smart and Lucrative Growth Using the Global
  Presence of the U.S. Foreign Commercial Service
  
• West Coast Franchise Expo
• Los Angeles, October 19, 2007

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Presented By

• Kristin Houston, Senior International Trade
  Specialist
• U.S. Commercial Service, Newport Beach, CA
• Robert Shaw, Managing Director
• Edwards Global Services

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OVERVIEW

• Franchising Today
• International Franchising
• Market Entry Strategy
• Our TOP TIPS
• The Challenges
• The Opportunities

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OVERVIEW

• What is the U.S. Commercial Service
• U.S.C.S Services for Franchisors
• Export Success Stories
• Franchising Shows Trade Missions
• Useful Websites Contacts
• Robert Shaw An Exporters View

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Franchising Today

• 1.53 Trillion Dollars
• Across 75 Industries
• One in Seven Jobs
• 50 Retail Sales

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Exponential Growth

• Growing Six Times Faster than U.S. Economy
• 900 New Concepts in last 3 years

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International Franchising

• U.S. Franchisors lead on International Expansion
• 20 of all American franchisors go Global
• Half of all units established are outside the
  U.S.
• Additional 100 Expand Across Borders Every Year

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Why Go International?

• Fast Efficient Growth Expansion Strategy
• International Demand for Products and Services
• Enhance Reputation Credibility In Domestic
  Market
• Become a Multicultural Organization
• Contribute to Economic Development in Foreign
  Countries

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Americas Top Franchises In EuropeSource
www.franchisedirect.com
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Development of Franchising By CountrySource
U.S. Commercial Service 2007
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Take a Strategic Approach Where to Go?

• Establish Market Demand
• Development of Franchising supply of Franchise
  Investors
• Legal Structure
• Economic, Political Commercial Assessment
  GlobalVueTM
• Banking System Availability of local Finance
• Communications Technology
• Competition Where are your competitors going?
• Franchising QuickTake!

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Market Entry Strategy

• Master License, Area Developer or Regional
  Developer, Multiple/Single Units?
• Geography, market, product/service and resource
  issues
• Nuances of Individual Countries
• Seek Advice local Franchise Associations
• Pilot Units a Recipe for Success

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TOP TIPS

• Adapt to Local Market
• Invest in Market Research
• Test Transferability Receptivity
• Invest in Pilot Project
• Protect Trademarks
• Refine Candidate Profile

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TOP TIPS

• Internationalize Materials
• International Webpage
• Formulate Realistic Fees
• Encourage Prospects to talk to Franchisees
• Conduct Due Diligence on Prospects
• Devise Realistic Development Schedule
• Hire Translators

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THE CHALLENGES Source NatWest 2004
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Is It Worth It ?
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U.S.C.S Our Global Network

• Foreign Service Officers and Trade Specialists in
  over 84 foreign markets and 110 U.S. cities
• Customized programs and services for U.S.
  exporters and overseas investors

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What We Do

• The Commercial Service provides solutions that
  position U.S. businesses for success
• World class non-bias market research
• Counseling and advocacy through every step of the
  export process
• Trade events that promote your product to
  qualified buyers
• Introductions to qualified buyers and
  distributors

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Our Annual Report !Your Bottom Line
In FY 2006 The U.S. Commercial Service helped
more than 69,000 exporting companies achieve more
than 63 Billion in export sales.
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Our Customized Services

• Expert Counseling for new to mature Franchisors
• QuickTake for Europe!
• Franchising Gold Key
• Single Company Promotions
• Business Facilitation Services
• Trade Missions
• USA Pavilions at International Shows
• Counseling Matchmaking at Domestic Shows
• Introductions to Local Franchise Associations
• Webinars on International Market Opportunities
• Regional Education Development Conferences

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U.S. Commercial ServiceCore Services

• Business Facilitation
• Gold Key Matchmaking
• International Partner Search
• International Company Profile
• Single Company Promotion

• Trade Promotion Events
• International Buyer Programs
• Trade Missions/US Pavilions

• Customized Programs
• Platinum Key Service
• Advocacy
• Business Consulting

• Market Research
• Market Research Library
• Customized Market Research
• Country Commercial Guide (CCG)

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Market Research

• Country Commercial Guides (CCGs) - Prepared
  annually by US Embassy Staff, CCGs contain
  information on the business and economic
  situation of foreign countries and the political
  climate as it affects U.S. business and foreign
  investments.
• Industry Sector Analyses (ISAs) - In-depth
  analysis of specific industry sectors and
  sub-sectors within a given market.
• International Market Insight (IMIs) - Brief
  updates within a foreign country highlighting
  specific market opportunities, trade events, or
  changes in market conditions.
• Flexible Market Research Customized market
  research for specific product niches , etc
• Most can be found on IFA Website or Buyusa.Gov

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Quicktake for Europe !
Get a fast, comprehensive assessment of your
companys potential for making sales in specific
European markets based on Current demand
Nature of partnership Future demand
Cultural modifications Competition
Next steps Visit www.buyusa.gov/quicktake/
register.html to register.
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Franchise Gold Key ServiceMaking the Match

• A Very Customized Approach
• Customized market and industry briefings with our
  local trade specialists
• Timely and relevant market research
• Post-meeting debriefing with our trade
  specialists and assistance in developing
  appropriate entry strategies
• Help with travel, accommodations, interpreter
  service, and clerical support

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Franchise Gold Key ServiceMaking the Match
Cont.

• Facilitator
• Place an ad for Client in appropriate local press
  
• Send flyers by email/fax to targeted
  companies/individuals
• Conduct telephone screening with potential Master
  Franchisees to ensure they are qualified and
  seriously interested
• Send material to those who pass screening test
  and Master License application. Pass to client
  for further direct contact with potential
  licensees

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Franchise Gold Key ServiceMaking the Match
Cont.

• Qualified Appointments
• Meet with/call/email existing targets in the
  franchising and investment industry to alert them
  to upcoming, unique investment opportunity.
• Send flyers by email/fax to targeted
  companies/individuals
• Conduct telephone screening with potential Master
  Franchisees to ensure they are qualified and
  seriously interested.
• Email or courier serious candidates with
  preliminary information.
• Set up meeting with good potential candidates for
  client
• Commercial Service assists with any needed local
  follow-up including (help with visa referrals for
  candidates attending Discovery Days, referrals to
  financial and legal experts for contract
  completion stage, etc.)

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Franchise Gold Key ServiceMaking the Match
Cont.

• Promotion
• Large ad placed in local press, posted on
  relevant websites, etc.
• Large number of invites sent to list of
  potential investors gleaned from local list
  provider and franchise contacts.
• Potential Master License purchasers invited to a
  central venue for presentation by client on the
  company.
• One-on-one meetings arranged after presentation
  for interested parties.
• Further discussions conducted by client -
  Commercial Service on hand to assist with any
  needed local follow-up or assistance, including
  (help with visa referrals for candidates
  attending Discovery Days, referrals to financial
  and legal experts for contract completion stage,
  etc.)

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Single Company Promotions

• The Single Company Promotion service offers
  support and event facilities which will allow you
  to engage your target audience through

• Product launches
• Sales seminars
• Staff training
• Networking receptions

Facilities available include exhibition halls,
auditoriums, meeting rooms, hotels and even the
residences of some US Ambassadors.
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Commercial News USA

• Monthly trade magazine that lists U.S. products
  and services
• Distributed free to more than 400,000 buyers
  from around world
• A proven track record of high-response rates
  and sales results
• Why not advertise and increase your
  international sales..?

Check out export.gov/cnusa for more information
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EXPORT SUCCESS STORY ! Ireland
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EXPORT SUCCESS STORY ! Germany
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OPIC Committed to Franchisors.

• Requirements
• 25 ownership by a U.S. small business in the
  franchisee, or significant involvement of the
  U.S. franchiser in the project
• Loan terms for franchise loans
• between 3-8 years, with an interest-only grace
  period not to exceed six months.
• Available loan amounts range from 100,000 up to
  4 million.
• Loans over 1.5 million should generally involve
  multiple units.

OPIC is committed to helping U.S. business
franchisers grow by providing long-term financing
in emerging markets around the world and is able
to provide financing to a variety of business
entities involved in international franchise
relationships. OPIC Homepage
www.opic.gov OPIC Operator [phone]
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Presidential E AwardSign A-Rama Summer 2007
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Another Photo Op Sign A Rama
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Franchising Shows Trade Missions

• October 2007- Egypt
• November 2007 Ireland
• February 2008 - Bahamas
• March 2008 France, Mexico India
• April 2008 IFE Washington, D.C.
• April 2008 - Portugal
• May 2008 Australia
• August 2008 - Italy
• June 2008 - Brazil
• October 2008 Asia Trade Mission

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Websites

• U.S. Commercial Service
• www.buyusa.gov
• Franchising E-Market Express
• www.buyusa.gov/eme/franchising.html
• Edwards Global Services
• www.edwardsglobal.com
• International Franchise Association
• www.franchise.org

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Contacts
Kristin Houston Team Leader, Global Franchising
Team U.S. Commercial Service, Newport Beach,
California Tel [phone], 314 Email
Kristin.Houston_at_mail.doc.gov
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• THANK YOU!

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Best Practices and Testimonials for Going Global
Robert Shaw, Managing DirectorEdwards Global
Services, Inc.19800 MacArthur Blvd., Suite
300Irvine, California USA 926121.949.224.3896
Main Officershaw_at_edwardsglobal.com