Important For Companies To Franchise Their Business Overseas

Barbados Advocate:

IF ever Barbadian companies need to franchise their business overseas, now is the time to do so.

That is because recent official information shows that while there was a slowdown in the generation of royalties and licence fees into the Barbados economy last year, outflows continue to increase at a tremendous pace.

This comes as calls heat up for more Barbadian companies to franchise their operations in foreign markets, which in the process would maximise the country’s foreign exchange earning capacity.

The just released 2006 Central Bank of Barbados Balance of Payments Survey reveals that inflows from royalties and licence fees declined to $3.4 million in 2005, from $4.6 million the previous year. On the other hand, outflows jumped from $40 million in 2004 to $58.1 million, reflecting the extent to which Barbados has become a market for companies franchising their products and services. According to the Central Bank’s report, royalties cover the exchange of payments and receipts between residents and non-residents for the authorised use of patents, copyrights, trademarks and franchises, and with the use of licensing arrangements of produced originals or manuscript and films.