With five years of the 21st century behind us, let's take a few moments to look at the impact franchising is likely to have at all levels of business, in this country and around the world, as the century unfolds. With over 10,000 franchisors now established worldwide and almost one million franchisees trading in 150 countries, the 'win-win' formula that franchising offers is here to stay for the duration of the century, and probably for centuries to come.

In the early 1950s we witnessed the emergence of Business Format Franchising and within 20 years many aspiring businessmen and women had recognised the opportunity that franchising offers to expand, initially nationwide then into certain international markets. Today, the idea of expanding by franchising is considered by almost every successful local company.

Franchising is the natural way to expand, because it offers people with capital and various skills the opportunity to benefit from the franchisor's brand, values, systems, framework and formula for obtaining business, generating turnover and most importantly obtaining a profit at the end of each year.

Franchisors of the future will become small central organisations of highly competent individuals masterminding their franchise network at two levels - the national business (as a Master Franchisee does), and at the international level. The most important franchisors will be those that have aspired to become international, and some may even sell the Master Franchise rights for their own country to a separate entity, leaving them free to concentrate on the franchise's values, mission statements and role in the market that it serves.

The founders, executive management and HQ operation will become the ultimate franchisor receiving revenues from the allocation of further Masters, management service fees from their established Masters and supply line profits as appropriate. The world will be their market!

As these ultimate franchisors prove the viability and profitability of their Master Franchise opportunities, their winning formulas will be sought by more established indigenous companies seeking to buy into the frameworks and formulas for success. These Masters will, in turn, become valuable businesses for their investors and will dominate trading activities in a multitude of sectors.

Already, early examples of this future model for international business can be identified in brands such as Avis, Hertz, Hilton Hotels, Holiday Inn, McDonald's, Burger King and Subway - well established international brands which have successfully developed their franchise businesses in over 20 countries. These international franchisors are responsible for masterminding the entire Master Franchise business and those of their franchisees, covering elements such as business plans, strategies, manuals, systems, training methods, values, research & development, infrastructure and the relationships with their Masters and their franchisees.

While the brand will continue, expect the ultimate franchisors to move into new markets relevant to their customer base, as McDonald's did with the introduction of entirely new products and hotels. Hertz and car rental companies are also obvious brands to follow into the hotel sector. While the brands will remain, the products and services being offered will change over time.

Becoming involved in this exciting world of franchising calls for new thinking from the mature franchisors. Do they sit still and concentrate on their original country market, or take advantage of the international opportunity? To do so, they may even have to look at changing their original franchise, mission statement and values. Indeed, steering this is likely to become the management team's most important role.

When the franchise offering is professionally thought through and a strong infrastructure is in place, finding and awarding franchises is not a difficult task. The franchisors of the 20th century have done an excellent job in proving that there is a system to successful franchising, and many are now recognising that this does take time to identify. However, the expansion must be controlled - too rapid growth will cause the whole network to crash as has happened with some franchise brands already, which are currently very good at selling the franchise opportunity, but failing to support those that have come onboard.

Successful Business Format Franchising will always take a considerable amount of time to plan and implement, and franchise companies can create vast wealth and employment. Around 10 million people are already employed in the franchise sector around the world, and as Business Format Franchising is likely to grow at 10-15 per cent per annum the number of people employed in franchising is projected to be in the region of 20 million by 2025.

In the future there's going to be a very wide selection of opportunities available for prospective franchisees to consider investing their time, effort and money in. Those that are willing to take their time and choose the most appropriate brand with a professional team to assist with their local franchise development are more likely to succeed. There will also be a number of entrepreneurial franchisees that will be looking to build portfolios of successful brands. Once such operations are established and managed professionally they bring an entirely new opportunity to franchising.

International franchisors will also need to address their places in the global economy, and their social legitimacy will be important. They will need to establish exactly what they stand for, clearly define their value mission and chart out future aspirations. Provided that their franchisees at all levels can be offered a genuine product or service that can be traded profitably, the world is indeed their oyster.

Roy Seaman is Managing Director of Franchise Development Services Ltd (FDS), an international franchise consultancy which also publishes a range of franchise directories, magazines and websites, including European Franchising and Franchise International.
Email: roy@fdsltd.com
Visit: www.franchise-group.com