International Planning

Franklin Covey has its sights set overseas, as the consumer products company gets ready to push its licensed merchandise into new international markets.The company itself has gone

April 6, 2018

4 Min Read

Franklin Covey has its sights set overseas, as the consumer products company gets ready to push its licensed merchandise into new international markets.i1_579.jpg

The company itself has gone through several iterations. Originally Franklin Quest in 1984, the company merged with the Covey Leadership Center in 1997, bringing together the Franklin Day Planner business and author Stephen Covey's consulting business. Franklin Covey has been a leader in both consulting and office organizational tools and merchandise ever since.

But the two companies split last year, once again separating the consulting and training from the products business. Whether together or apart, it makes little difference because the Franklin Planner business is grounded in the principles used in the consulting portion.

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The consulting and training component, originally based on Dr. Stephen R. Covey's book, "The 7 Habits of Highly Effective People," now boasts eight volumes and $260 million in sales worldwide. And its the international business poised for growth through licensing.

"Covey and the principles he teaches, along with some of the affiliate business experts, have become very hot outside the U.S.," says John Spotts, senior vice president at Franklin Covey Products. "The international portion of the business has grown very significantly. We did $59 million in sales in 2008 in the training and consulting business.

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"At the same time, we had a nice product business overseas of [approximately] $20 million, but haven't really focused on it," says Spotts. It's a sizable business—one that the company hasn't really paid attention to, until now. "One of our top initiatives is to grow the products business internationally, and we would like to do it on a licensing model. It could be licensed sales, licensed distribution of existing products or a combination of both licenses and distribution."

A focus outside the U.S. market may make good sense financially, with the local economy yet to revert to growth mode. China and parts of Asia are recovering more quickly, and even Canada, according to a recent survey conducted by the NPD Group, has significantly higher consumer confidence than the United States.

According to Spotts, Franklin Covey planning products are "particularly strong right now in Asia and Western Europe. Our focus is in those regions first, as well as Central and Eastern Europe," he says. Then, the focus turns to South America, specifically Panama and Brazil, followed by the Middle East and India.

It's an ambitious plan devised in fall 2008, after the products business became a wholly owned, but private, subsidiary of the consulting company. The success of the products side is very dependent on that of the services. "An advantage is the brand is known in these markets because of the training," says Spotts. "We train 500,000 people a year through the course and drive brand awareness through that, people become hooked on the program and the products that support the training."

According to Spotts, "The training business has been growing 40 percent to 50 percent, year over year, although we don't know what '09 holds."

The consumer products business no longer releases financials, either as a stand-alone business or part of the larger company. But that business has been negatively affected by the economic climate in the United States and abroad. "Our second-quarter results were largely in line with our expectations, although our domestic facilitator business and international licensee revenues came in slightly lower than planned," says Bob Whitman, chairman and chief executive officer of Franklin Covey, in a statement. "While we are not immune to the impact of weak economic conditions, we have strong bookings for the third and fourth quarters."

For his part, Spotts believes that the products will benefit from the weak economy. "We teach planning, effectiveness and prioritization. As businesses retrench, they need to be more productive than ever and more focused," he says.

Approximately 30 percent to 40 percent of the Franklin Covey Products are planning tools, pages, binders and the accessories that go with them. About 20 percent are totes and business bags, and the remainder are various other products, including writing instruments and planning software. Each of those product categories is available to license out, to the right partner. A successful expansion overseas will depend on finding the right licensees, says Spotts. Local markets have very specific needs that go beyond the different languages and holidays on calendars to include regional and cultural differences within markets.

In addition to one existing agreement with a licensee in Korea, another is soon to be announced, Spotts says. "We're only five months into [this initiative]," he says. "We're looking to have five or so by the end of the year. It's mainly a 2010 opportunity. We're just looking for the right partners."

Local programs aren't out of the question, though. "We've been investigating domestically expanding the core business with related products that we think could be opportunities," says Spotts. "Items for the desk, some task lighting, various additions in business bags and desk accessories. But we really see the international opportunity as the first play, and the biggest."

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