The Extreme Expert in International Franchising

Archive for January, 2013

Essentials of Moving Into the Property Business On a Global Scale

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International Property BusinessThree Essentials of Moving Into the Property Business On a Global Scale

  1. Know your areas of expertise
    • Are you a residential or commercial expert or do you have multifamily apartment sales experience?
      • You can’t be all things to all people, so identify who is buying what kind of property first and then look to your area of specialization to satisfy their needs.
    • Which price ranges are you comfortable in marketing?
      • You must be able to walk the talk! (Lifestyles of the rich and famous). If you are driving a Volkswagen and living in a rental project outside the area you are trying to sell property in, it will be almost impossible to have any credibility with your clients.
      • For example, many Russians and Chinese buyers are high net worth individuals and will expect a level of service comparable to what the concierge at the Waldorf Astoria Hotel in NYC will provide. You cannot fake this with your clients.
    • Are you a short sale or foreclosure expert?
      • Many international investors are looking for the DEALS and although the media always highlights the “trophy sales” in major cities the reality is that the average international sale in the USA in 2012 was $315,000.
      • International investors are flocking to areas such as Las Vegas, Florida and Arizona where as much as 50% of all sales are to non-local buyers. Therefore you need to become the expert in such areas and establish contacts with agents in each for cooperative sales or referral transactions.
      • Throughout Asia and parts of Europe, small or medium size investment funds ($25 million to $100 million range) are being set up to acquire USA foreclosure properties. They are looking for an expert in foreclosures who can lead them to individual properties or to financial institutions who are holding such properties, so start networking to position yourself as such a conduit.
  2. Know your marketplace
    • A full understanding of the population demographics and future growth projections for every area is vital to enhance your position in the client’s eyes as the expert in your area.
      • Use Google; research and statistics; state, international and U.S. Census Bureau statistics; Trulia; Zillow; REAL Trends; and Swanepoel Report, etc. to become the leading source of property statistics.
    • Individual market area knowledge is vital to enhance your expert status so you must be able to confidently explain the listings and sales figures for every area you work in.
      • Know the Board of Realtors multiple listing service statistics for your city, plus your individual office or company statistics as well as your own personal sales numbers, off the top of your head.
    • Community benefits, education facilities and public conveniences, transportation infrastructure, utility costs, etc. are very important to international buyers, especially when they are immigrating to the U.S.
      • Join your local Chamber of Commerce and take an active role since many overseas companies seeking to open a branch in your area will first meet with the Chamber of Commerce Business Development Committee as part of their due diligence.
      • Meet the HR directors of the major employers in your area as many of them are recruiting top talent from overseas. Offer to provide their prospects with housing information, mortgage pre-qualification and property familiarization tours as part of your service package as an added value to the HR department.
      • Meet the housing directors at your local universities. In 2012, more than 700,000 foreign students attended universities in the U.S. Approximately 40% of these students purchased properties through their parents to live in during their four years of study. Therefore, it is vital that you meet the university housing directors in your area and offer your services to them as part of their recruiting program with international students who all pay out-of-state tuition, which is an important component of each university’s annual budget.
  3. Know your customers
    • Familiarity with your market’s diversity
      • Based on the population demographics from the above, get to know the various community organizations: Asian associations, Italian/Russian/Latin American organizations. Offer to be a speaker at their many events and set up an ongoing marketing program to promote yourself as the “international expert” in your area.
      • Become involved in your community outreach organizations.
    • Building the relationship first
      • The old adage “People don’t care how much you know until they know how much you care” is so true when working with international clients. Take the time to get to know your clients over a meal, coffees and dialogue about them BEFORE you jump into the conversations about business. Until they know you on a more personal level, you will not be entrusted with their business needs.
    • Earning their trust
      • Depending on the ethnicity of the clients you will be serving, you will need to study their culture before you ever meet them so that you will know the proper social customs such as gift giving, proper business card etiquette, greetings in their language, dining etiquette, respect and proper dress and many more intricacies of social dialogue.
      • I would recommend reading books on international customs such as “Kiss, Bow, or Shake Hands” by Terri Morrison, among others.

Converting International Students into Homeowners

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International StudentsUpward of 40% of international students will purchase a home in their university town rather than live on campus or rent an apartment. When you consider the numbers in the top 15 cities alone, this represents approximately 194,000 purchases totaling in excess of $58 billion in sales at an average price of $300,000 per property!

Therefore, it makes sense to establish a professional and ultimately a personal relationship with the university housing department to better understand the university requirements, housing needs and student mix and over time to be considered one of their valuable consultants to assist incoming students with their off-campus housing needs.

Many universities have agents operating overseas in their targeted countries, so when you are also focusing on one of those market countries, ask for permission to work directly with their outside agents to connect them to your “in country” referral agents.

At the same time, identify and contact the local university agents responsible for the international marketing and offer your services, which should include available properties for sale or lease, area housing demographics, financing information and area tours both virtual and in person once the student and parents arrive.

Every major university will attend international education exhibitions in their targeted country to promote the educational and cost benefits of their specific university and city, so if possible, join with your university as one of their “experts” to help give them the competitive edge in enrolling the new student into their four-year program. (In most cases, the travel and expense costs for this week will be yours rather than the university’s.)

Top 15 Countries of Origin for International Students in 2012

1 China 127,628 +30%
2 India 104,897 +2%
3 South Korea 72,150 +4%
4 Canada 28,145, -5%
5 Taiwan 26,685 -5%
6 Japan 24,842 -15%
7 Saudi Arabia 15,810 +25%
8 Mexico 13,450 -9%
9 Vietnam 13,112 +2%
10 Turkey 12,397 +2%
11 Nepal 11,233 -3%
12 Germany 9,548 -1%
13 United Kingdom 8,861 +2%
14 Brazil 8,786 +1%
15 Thailand 8,531 -2%


Top 11 Majors for International Students

1 Business and Management 21%
2 Engineering 18%
3 Physical and Life Sciences 9%
4 Mathematics and Computer Science 9%
5 Social Sciences 9%
6 Fine and Applied Arts 5%
7 Health Professions 5%
8 Intensive English Language 4%
9 Education 3%
10 Humanities 3%
11 Agriculture 2%


States with the Most International Students

California 94,279 +1%
New York 76,146 +2%
Texas 58,934 +1%
Massachusetts 35,313 +4%
Illinois 31,093 +4%
Florida 29,708 -2%
Pennsylvania 28,097 +2%
Michigan 24,214 +3%
Ohio 22,370 +8%
Indiana 18,569 +9%


Universities with the Most International Students

1 University of Southern California 7,987
2 University of Illinois at Urbana-Champaign 7,287
3 New York University 7,276
4 Purdue University 6,903
5 Columbia University 6,833
6 University of Michigan-Ann Arbor 6,095
7 University of California-Los Angeles 5,685
8 Michigan State University 5,358
9 University of Texas-Austin 5,265
10 Boston University 5,172


In conclusion, international education represents a huge opportunity for those agents living in one of the 10 states shown above or near one of the 10 major universities listed above. If you live in a city that has a strong educational reputation for business or engineering, there is a strong likelihood that there are international students in attendance and that 40% of them could be buyers of homes. To capitalize on this, make the university connections to build relationships and at the very least consider bringing in multilingual agents who can speak Mandarin, Hindu, Korean and Japanese.

Cultural Differences When Communicating with International Prospects

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international clients

  • Even when your prospect speaks good English, don’t assume that he/she has 100% understanding of what you are saying. Americans speak very rapidly, so SLOW DOWN YOUR PACE OF SPEAKING.
  • Ask frequently for confirmation that your listener understands what you are saying. Many will not admit that they don’t understand what you are saying, so ask in a way that will tell you that they get what the point you are making, e.g. “What sort of marketing campaigns do you currently use?”
  • Try not to use AMERICAN SLANG TERMS. They will only cause confusion, misunderstanding and potentially embarrassment as they might even have different meanings in another language.
  • Gestures can also be misinterpreted. A classic case was former President George H.W. Bush giving the two-fingered peace sign in Sydney, Australia, after the success of the first Gulf War. He did it with his hand facing outward to the crowd, which in Australia means the same thing as a middle finger in the USA. The photo was front-page news in the Sydney Morning Herald the following morning.
  • American real estate practices are so much more advanced than much of the rest of the world, so take that into consideration when talking real estate with them. Most don’t have exclusive listings, most don’t have transparent markets, most cannot do neighborhood canvassing (door knocking, flier drops, etc.). Many sell new construction from developers’ showrooms or in huge real estate exhibitions.
  • Americans are quick to get into the business discussions whereas international clients will want to get to know you first and engage in small talk or anything other than the business at hand. Therefore, take your time and enjoy the tea or coffee and just relax until you see signs that your client is feeling more comfortable and is ready to change the subject to the business topics.
  • Politics and religion are never a good topic to discuss, even in the U.S., so it is always best to avoid these topics as well with your international guests.

Five Considerations When Setting Up Your Vendor Network

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  1. Legal DepartmentMake sure your supplier network is in place and that you have inspected the quality of their products before you grant your first franchise!
  2. Inspect all your suppliers’ production facilities before signing with them to ensure that they will be able to support your needs as you expand.
  3. Only select service providers who have a proven product.
  4. Ask your master franchisor for a copy of their vendor contract and have your legal team adapt it for your local use and make sure that every vendor has agreed to all terms and conditions and signed it. In addition to time tested compliance issues this will ensure that they will also participate in your ongoing events and annual conferences.
  5. When negotiating contracts with your vendors, leave them some profit so they will continue to provide excellent service. It must be a win-win deal for both sides.

Twelve Tips for Your Legal Department

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  1. legal departmentDon’t blindly follow the terms of your master franchisor’s current franchise contract used in a mature marketplace. Your legal team and executive staff need to review it from the legal and business contexts of your country as well as for terminology and culture nuances and then ask the master franchisor for permission to make the adaptations for your emerging or immature markets.
  2. At the time of the signing of the franchise contract, give the new franchisee a summary term sheet outlining the pertinent details of the agreement and have them sign it and place it in their franchise file.
  3. Have strict enforcement provisions and checklists for the processing of the initial due diligence of a franchise application, the supporting legal documentation and collection of the initial fees.
  4. Set up your internal accounting system and method to invoice and collect funds before you grant the first office.
  5. Delinquent franchisees will usually ask for fee reductions and more advertising or consulting support in the same breath. Anticipate this and be prepared with the answers.
  6. Always first seek to negotiate a financial repayment program with delinquent franchise fees before resorting to legal collections or litigation. Patience will be a virtue in the long run for good franchisees that have had a run of bad luck.
  7. Never let a franchisee dictate the terms of the contract.
  8. After all other efforts to resolve legal problems with your franchisee fail, never hesitate to enforce your franchise contract. Unfortunately it is sometimes necessary to terminate a major franchisee from your network as an example to the rest of the franchisees.
  9. Assign only one corporate executive who is responsible to physically inspect new offices prior to acceptance of the location and control the office layout and décor.
  10. Assign only one corporate executive to approve and sign off on all outdoor signage prior to ordering and installation at offices. Never hesitate to enforce removal of illegal signage.
  11. Prior to opening in your franchise region, conduct a legal review of the franchise laws and registrations of all domain names and other entities that might be trading under your brand name. Provide a list of all infringers to your master franchisor as soon as possible and preferably prior to signing your master franchise agreement.
  12. Don’t always assume that infringers are your enemy.  Obviously they liked your concept or brand so look for ways to bring them into your system once you have determined that they are good operators.  This is another win-win situation that avoids the costly litigation that will be needed to get them to cease and desist.

Seven Secrets of Franchising Success

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  1. Franchising SuccessThe guiding principle in a successful franchise operation is total transparency. What you do for one franchisee, you must be prepared to do for all the others.
  2. Don’t overpromise and underdeliver. Rather, underpromise and overdeliver!
  3. Never set up an organization that is in competition with your franchisees. If you do, make sure the franchisees understand your role and that you will treat your offices the same as theirs with no preferential treatment.
  4. Adapt and localize the core deliverables such as policy and procedure manuals, training courses, business models, legal documents, financial systems, technology platform and marketing materials before commencing the franchise affiliation process.
  5. Test every employee on the full terms of the franchised contract and the policy and procedure manuals before they ever get in front of one of your franchisees or a franchise prospect. This will ensure that the same message is given to every franchisee or prospect every time.
  6. Take time to know who your business partners really are at all levels and have a firm written commitment for the funding before you enter into a master franchise with them.
  7. You are only as good as the weakest link, so when you have an underperforming staff member, cut them out as early as possible from your franchise team.

Nine Ways to Support Your Franchisees

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  1. business franchiseConduct a formal “signing ceremony” for new offices. All regional staff members should attend to celebrate the launching of each new franchise whenever feasible. Use it as a media event to promote the new franchisee as well as attract other potential prospects to your franchise system.
  2. Have a clear understanding with the new offices as to what the startup package contains and when it will be delivered and have them sign off on the startup list and keep a checklist as items are delivered to them. Create a multiple-day onsite orientation program with your new franchisee to review the purpose and implementation of each item in the startup package.
  3. You must do whatever it takes to deliver support even when you are just beginning with a small staff. On any given day you will all wear many hats as a trainer, human resources expert, business consultant, public relations professional etc. Never let the lack of manpower prevent you from supporting your franchisees at the highest levels.
  4. Make every interaction with your franchisees a learning event. When conducting your monthly business consulting with every franchisee focus on the daily, weekly and monthly key performance indicators that they set in their annual business plan. Coach them on how to develop the appropriate activities and business habits to attain them and get them to allow you to hold them accountable.
  5. Outsource marketing and public relations as soon as possible and invite your top franchisees to participate in focus groups with your public relations firm.
  6. Hold your first franchise advisory council meeting as soon as possible. Consider establishing it once you have five franchisees signed up and select your leaders from that initial group. Deal from a position of a win-win relationship and avoid collective bargaining whenever possible.
  7. Conduct your first franchise awards and recognition event within six months of the grand launch of your franchise network. Set the attendance fees at a break-even level and make it educational, motivating and FUN. Make this at least a biannual event.
  8. In franchising, it is the little things that count. Constantly be on the lookout for franchisees that go above and beyond in helping their team or other franchisees succeed, that reach their monthly targets, that exemplify professionalism, good citizenship and the highest levels of integrity. When you see it, acknowledge it by handwritten notes, emails, social media, and personal phone calls.
  9. Involve your top franchisees in your learning environment by giving them the honor to participate in panel discussions to share their experience and successes with their fellow franchisees. Ask them to be part of your master faculty.

Five Ways to Promote Yourself Internationally

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  1. Promote Yourself InternationallyPreparing your marketing materials
    • When to create multilingual personal marketing brochures
      • Lead with revenue! Start out small and grow from your earned income rather than throwing lots of money at your initial marketing pieces.
      • Create bilingual business cards as a minimum.
      • Don’t rely on Google Translator. Hire a professional translator when you decide to make a multilingual brochure.
      • Consider a few pages of your website for translation initially with the plan to create a second website in the targeted country’s language.
    • Is color important?
      • Stick to black type on white backgrounds for any Power Point presentations.
      • Various colors in some cultures can refer to death, so complete your research first before printing.
    • To video or not to video
      • Videos showcase your expertise, so do them often for your websites.
      • Many international clients are bilingual, so don’t let being an English speaker only stop you.
      • Consider making some videos in the language of your clients. If you are not a native speaker, you can subtitle or hire someone to promote you in the targeted language to create additional credibility in your client’s eyes.
  2. Consider using international providers.
    • A great resource to showcase your listings overseas is Proxio. Proxio’s real estate platform provides global marketing and networking services that empower real estate professionals to market themselves and their listings worldwide, in 19 languages and 30 currencies. Real estate professionals use Proxio’s online services to promote and translate listings, build business networks and search for properties that meet client’s criteria – across geographic and cultural borders. By connecting the sources of real estate supply and demand in an efficient manner, Proxio enables real estate professionals to reach a global audience and close more transactions. Over 500,000 agents currently use Proxio to promote 2.8 million listings from more than 100 countries.
    • is your source to get your listings in front of more than 90 million Chinese property buyers per month. Websites not hosted in China can either be blocked entirely or experience page load times of over 2 minutes, which is not a good user experience. Since is hosted inside China, providing consumers with fast access to your listings and information, you gain access to the high net worth Chinese audience of 2.7 million people. This audience has the means and desire to invest in international property, having spent some US $28 billion in 2011. More importantly, your listings are translated into proper Mandarin and you have a team of English-speaking experts to assist you with your Chinese clients. Other vital things to know about the high net worth Chinese is that 60% are engaged in overseas investment or immigration, 61% pay cash and 85% want to educate their children overseas.
  3. Developing your marketing strategy
    • Find buyers through local ethnic publications.
    • Every major market will have daily or weekly publications in the language of the predominant ethnic groups living in the community. Position yourself as the resident expert in an advice column or promote your properties or your services on a regular basis to get some name familiarity.
    • Upload your listing to other countries’ real estate portals.
  4. Identifying points of contact in your country of focus
    • Through networking with the international real estate organizations shown below or through your online research, identify brokers/agents in your targeted country and create a referral relationship with them to handle their outgoing buyers. Join them and send them your listings to post on their websites.
    • Some international real estate organizations
  5. Personal visits
    • Identify any international businesses based within your area and market to their top executives and HR departments offering your array of services to their incoming executives. Build a solid relationship through an ongoing series of contacts both in person and through a strong contact management program.
    • Attend your targeted country’s real estate events to build your network contacts with local real estate brokers and to promote your services and listings to their outgoing buyers.
    • Here are just a few upcoming events of merit:
      • MIPIM, March 12-15, 2013, Cannes, France
      • APRECE: Asia Pacific Real Estate Convention & Expo, Mar 20-23, 2013, Singapore
      • Moscow International Property Show, April 12-13, 2013
      • International Property Show, April 30-May 2, 2013, Dubai, United Arab Emirates
      • FIABCI 64th World Congress, May 27-29, 2013, Taichung, Taiwan
      • Beijing Luxury Properties Showcase, May 31-June 2, 2013