A franchise is an arrangement where an organization (Franchisor) owns
the rights to a particular brand and sells licenses of that brand to others
(Franchisee). The arrangement allows for the brand to be set up as
stores or distribution channels around the country and the Franchisor
usually exerts a fair amount of influence and control over the franchisee.
Many household names are franchises including Subway, 7 Eleven,
Pizza Hut, KFC and of course McDonald’s.
Franchise Business Model
The franchise business is a popular business model in both the United
States and abroad and includes franchise industry giants such as
McDonald’s and KFC as well as numerous other franchises that operate
on a much smaller scale. The basics of the franchise business model
exist when a franchise or license is made available by a company (the
franchisor) to a third party (the franchisee), and the franchisee, in turn,
will own an individual franchise location while utilizing the business
know-how, brand and products that belong to the franchisor. The
franchisee then agrees to meet certain obligations and pay franchise
fees to the franchisor. While virtually no business operates without risk,
the franchise business is able to minimize risk by taking advantage of
the franchisor’s business resources and established operating model.
One excellent E-2 visa option is to buy a franchise license or an existing
Advantages of Using a Franchise for an E-2 Visa
Consular officers generally have the perception that a franchise is a “real” business so even though the franchise can be a start-up, an examiner may find it less speculative. This is particularly the case if the brand is well known.
Franchisors provide an extensive amount of financial information that can be used in the business plan and as the data is from a third party (rather than self-generated) an examiner may give the data more weight.
A franchise is the middle road between buying a business and starting one so provides a middle ground. As such, when buying a franchise, you are supported (in terms of training and direction) so do not have to go it alone. This provides an added benefit also of not requiring that the applicant be an expert in the field. In addition, a franchise provides a proven path for success. Starting a business can be difficult and this is particularly the case when you are in a new country.
Entry costs can be reasonable compared to buying an existing business. As the franchise license represents a right to use the brand, the cost of entry is far less than if you were buying an existing business. The entire franchise fee can be included as an E-2 investment expenditure and this expenditure represents a very solid E-2 visa expenditure. Some franchises can sell for as little as $50,000 which provides an entry point for an E-2 visa.
How The L-1A/EB-1C Can Work For Franchise Businesses
Many businessmen own and operate successful businesses abroad,
and many of these are interested in starting a business in the United
States after learning about the L-1A/EB-1C immigration option.
However, while starting any type of business inherently involves a
significant amount of risk, the risks and complications that face foreign
nationals hoping to start a business in the United States are multiplied if
they are unfamiliar with United States business practices.
For foreign nationals interested in starting a business in the United
States but who are unsure of what type of business to establish or who
are hesitant about running a business outside of their home countries, a
franchise business presents a viable option where the foreign investor
can rely on the franchisor’s business model, brand, and products to
increase the likelihood of success. The Foreign investor- acting as both
a franchisee and executive - will own and have equity in the franchise
business but can often rely on the franchisor to assist with operating the
business, including hiring a franchise store manager. This type of
arrangement then allows the foreign national to invest in and own
multiple franchises, and ideally multiple franchises will lead to increased
financial returns for the foreign national. Even though the foreign
national is not required to work in the actual franchise store day-to-day,
the foreign national will be working day-to-day on the overall franchise
business by making executive-level strategic and growth decisions in
furtherance of developing multiple franchises.
In relation to the L-1A/EB-1C, there are many different ways that the
franchise business can be structured that are practicable. But in order to
build up a strong case and maximize the L-1A/EB-1C petition’s
likelihood of success, the ideal Foreign investor candidate will own a
foreign company (minimum 51 percent controlling interest) and act as
that foreign company’s senior executive. The foreign company must
also be operating successfully with a substantial number of employees
and an established management structure to justify the foreign
national’s role as a senior executive. With these items in place, this
same foreign investor can then invest in franchise businesses in the
United States and act as the senior executive in charge of the overall
Manhattan Global Consulting works with many well established,
reputable U.S. franchises to help you choose the best business that fits
your needs. Please contact us at info@http://localhost:8080/cagrielyeni if you are
interested in purchasing a U.S. business or franchise.