ABCK-AmCham Kuwait in collaboration with the U.S. Commercial Service – Kuwait, and Al Tamimi & Company hosted a webinar on how to Franchise U.S. Brands, Investing in the U.S., and the Legal Aspects of Franchising. The virtual webinar was organized with the support of AmCham Dubai, and AmCham Oman.
The webinar started off with opening remarks by Mr. Frank Belonus, the Chairman of the Board of ABCK-AmCham Kuwait, as he welcomed the participants and introduced Mr. Joel Stewart- Founder of International Franchise Marketplace, Mr. Fady Ghanem- Partner, Corporate Structuring of Al Tamimi & Company, and Mrs. Shari Stout – Senior Commercial Officer of the U.S. Commercial Service in Kuwait.
Mr. Stewart opened the discussion by talking about how to Franchise a U.S. Brand. He mentioned the main 3 aspects that one must investigate prior to franchising: Identifying the reasons for wanting to franchise a U.S. brand, identifying the leverageable elements of a U.S. franchise, and engaging with the franchise that will meet ones’ objectives. He further elaborated on these 3 elements by speaking about the different franchise development models, whereas the single unit development is the basic core of the franchise system, the area development system which is where someone agrees to open a of series franchise units in a specific geographic area, and the master franchise agreement which is when someone becomes the franchise developer of a region, and they can sub-sell unit development agreements to others.
Another important element is the brand and the operations of the franchise. In which the brand represents a “substantial similar costumer experience, and this is the real power of a franchise, you could go to a location in another country and that experience should be substantially like the franchise that you opened right next to your house. The power of the brand is created through the brand operations, in which the brand has experimented and refined their operations to be efficient and to create a very pleasant costumer experience, this allows your franchise to be powerful”, Mr. Stewart noted. He informed the participants that if they were interested in finding available U.S. Franchises, they can reach out to franchise brokers, such as himself, or the U.S. Commercial Service.
The topic of the legal aspects of franchising was opened by Mr. Fady Ghanem, who spoke about the legal aspects to consider when opening a franchise. He also spoke about the different industries that are available for franchising, and he also urged those who are interested in expanding their business to ensure that their intellectual property is protected in any place in which they wish to expand the brand to. He also asked franchisees to investigate their trademarks to ensure that they are recognized locally and regionally, depending on the nature of the business and scope of the franchise.
Mr. Ghanem also spoke about franchise agreements, as he mentioned that no two franchise agreements will ever be the same, but that they should include the following: the term of the franchise, Trademark licensing and business operation along with the limitations on usage , Fees and mode of payment, Territory and scope, Standard Operating Procedure (SOP) and Manuals, Restrictions, Termination of the franchise agreement, Obligations for execution, termination, and post-termination, Non-compete agreements, Confidential information, Responsibilities and obligations of franchisor and franchisee.
Mr. Ghanem spoke about the main role of a franchisor, which involves securing protection for their intellectual property, licensing the use of their brand name, in which he mentioned that is incredibly important for franchisors to monitor the franchisee’s activities to ensure that they are following the SOPs and manuals, and their role is to conduct research and development to improves sales and customer adoption. He also finalized his talk by talking about the main roles of the franchisee, which involve paying royalties, complying with procedures, and complying with franchise targets.
To finalize, Mrs. Shari Stout spoke about the U.S. Commercial Service’s mission. Their mission in Kuwait is to promote the export of goods and services from the U.S., supporting U.S. companies to identify local partners, support Kuwaiti companies on finding U.S. suppliers, and aiding Kuwaiti companies interested in investing in the U.S., which is done through their customized services.
Mrs. Stout spoke about the benefits of investing in the U.S., including the fact that the U.S. has a vast population of 325 Million people, with a 20 trillion USD GDP. The U.S. also offers strong intellectual protection laws, as well as diversity and innovation with a well-trained workforce. The U.S. Commercial Service aids companies to invest in the U.S. through the SelectUSA Investment Summit, and this year’s program will be held virtually through June 7-11, 2021. The purpose of the program is to introduce international investors to the U.S. by introducing them to economic development organizations virtually, as well as having them participate in investor education sessions that will be hosted over the course of the 4-day period. To learn more about the Summit please contact the U.S. Commercial Service-Kuwait office.
To conclude the event, Mr. Belonus thanked participants and panellists for their input and questions and encouraged attendees to follow ABCK-AmCham Kuwait on social media for more upcoming events.
