This article was first published online by Franchise Times on February 24, 2021 and subsequently published in the March 2021 print edition.
In the spirit of the old adage, “if you wait for perfect conditions, you will never get anything done,” Spray-Net founder and CEO Carmelo Marsala embarked again on an international franchising journey just as the COVID-19 pandemic broke out.
Marsala and his team spent several years researching, planning and strategizing the expansion of the Spray-Net brand from Canada, its home base, into the United States, trying first in 2017 to enter markets such as New Jersey, Pennsylvania and Ohio before pushing pause. Spray-Net again launched an international franchise program in May 2020 and by January had awarded 15 franchises in the U.S. as the brand continues to ride the wave of high demand for home services.
Marsala founded Spray-Net, a professional exterior painting service utilizing custom-patented coating solutions, in 2010 and began franchising four years after.
Make a plan
When reflecting on Spray-Net’s research and planning for its international expansion, and now with the benefit of hindsight, Marsala recommends that brands undertake several critical inquiries when preparing to take a brand into the U.S.
“Take the time to assess the U.S. landscape and the diverse markets across its 50 states. Look at the current interest in franchising in various states as well as the demand for your particular product/service,” suggests Marsala. Applying these two filters to the analytics tools used by Spray-Net allowed it to focus and prioritize the states and market segments most likely to contribute to the success of Spray-Net in the U.S.
Regulation, registration and legal documentation also factored into the decision of which states Spray-Net selected for its first phase of expansion to its southern neighbor. “Once we had the list of states with a strong demand for franchising as well as home services/home renovation, we considered the regulatory and legal requirements of those states,” says Marsala. As with many international franchise systems, particularly those that are from “non-registration” jurisdictions like Canada, Marsala looked to avoid registration states and those with more onerous regulation.
One of the minor considerations for selecting the entry points for its U.S. franchise expansion was proximity to Spray-Net’s head office in Montreal, Quebec. Given that Spray-Net has decided to adopt a direct franchising structure, the closer the U.S. franchised business is to its head office, the better. “Having our U.S. franchisees close is particularly important for us because we send representatives from head office to the franchisee’s location for initial and ongoing training and field consulting,” says Marsala.
Address the challenges
As all franchise systems that embark on the international franchising journey know, it is not without its challenges. Two of the common and obvious external challenges are lack of brand awareness in the new jurisdiction, and determining how to build relationships and gain traction in franchise development.
“It is a strange thing, you may have scores of franchisees in Canada, but it’s like becoming an emerging brand all over again when you go into the U.S.,” says Marsala.
When asked what he would have done differently, Marsala says he “would have focused on the top one or two states, and a handful of cities, for the initial marketing of our brand and system, as opposed to spreading our budget thin across numerous states.”
Marsala also places high value on the use of external franchise professionals “While it depends on your objectives, budget and appetite for using outside professionals, looking back at our experience, I would have engaged external franchise development firms earlier,” he says. “Particularly at the outset of our expansion, the brand awareness” — to be achieved through rapid franchise sales — “the royalty stream, the revenue from the sale of our proprietary products to those franchisees, outweighed the fees of external franchise professionals.”
Sometimes, there are things that a brand does in its international franchising that set it apart, and that its founders are proud of. In the case of Spray-Net, that was its approach to creating and providing content to prospective franchisees and newly minted franchised businesses in the U.S.
“We put a lot of information about the brand and the system online, including over three hours of video content detailing the Spray-Net franchise opportunity. I’m a big believer in giving out as much information as possible, so that prospective franchisees have the clearest possible understanding of what it will be like to operate a Spray-Net franchise and they are in a position to make a fully informed decision,” explains Marsala.
This abundance of online content — which included extensive FAQs and associated responses collected from franchise development and onboarding meetings — provided Spray-Net a leg up in organic franchise development as entrepreneurs searched for franchise opportunities.
According to Marsala, taking a more information-driven approach to soliciting franchisees resulted in the first dozen franchisees being extremely knowledgeable about the brand as well as stronger pioneers and ambassadors of the brand in the U.S. That’s an invaluable and much sought-after asset to any franchise system.
The parting words of advice from Marsala can be summed up this way: 1. Take a measured and piecemeal approach to expanding into the U.S. through research, entry points, strategy, etc. 2. Get buy-in from your home market franchisees. Transparency and engagement in this regard were key for Spray-Net. 3. Reinforce your systems and infrastructure and pre-empt nuances to the details with documentation and software enhancements to account for a different tax system, spellings, human capital and other resource requirements. 4. Budget and understand the costs specific to your brand going international. 5. Don’t succumb to the fear mongering — be cautious but decisive.