Knowing your market well, being open to adaptation and adept supply chain management are paramount when taking your food brand overseas
Growing your franchise internationally doesn’t have to be difficult. Yes, there are differences in opening down the street versus on the other side of the globe, but you may be surprised at the success some emerging brands have experienced by going international early.
The number one priority is to get the right franchisees. Choose a knowledgeable franchisee passionate about your guests’ experience with a proven record of success. That trumps everything. The franchisee’s focus must be on making sure customers are delighted, then it doesn’t matter where in the world the growth takes place. At one U.S. burger chain, the best restaurants were run by the Kuwaiti franchisees. The chain had three U.S. locations before expanding to Kuwait. It was the best thing they could have done for their business. Those franchisees operated at twice the sales, twice the guest experience, and twice the branding as any other unit in the chain, including corporate.
Some of the best operators are outside the United States and very much responsible for the success of the brand’s trajectory. Their good press and high sales create buzz. There are many stories about a franchisor being so eager to go global that they’ll accept any franchisee into the brand, to collect the upfront fees, and no plan for the success of the franchisee or focus on the customers. This isn’t sustainable. Get the plan in place to pick the best franchisees to train, and support them.
Market research is key
Choose your international market carefully. The region should have brand awareness, understand your product or service, and have a demand for your offerings. Spend some time seeking out your first franchisee in the area, don’t rely on expecting them to find you. You’ll want to target the area with cautious intention to select your representatives for international markets. Know their reputation. Once you find the franchisee with the best fit for your brand, build from there. Build your brand with a plan in place, not opening in random locations. Once you have one successful franchisee with a few stores in an area, expand into the surrounding markets.
If you want to expand internationally, adaptation is key. You either adapt to the locals or fail. You aren’t going to recreate your whole concept for acceptance in international cultures, but consider it when building out your expansion plan. What works in the U.S., won’t necessarily work internationally.
Consider local flavors, price sensitivity, portion size, and traditions. Accept that your product or service may need tweaking for another culture. Burgers made from beef won’t fly in Hindu countries. Your main protein will have to change to be widely accepted in that region. Lamb or veggie burgers could replace beef burgers. Flavors widely accepted in the U.S. and Europe may be drastically different from the flavor profiles accepted in Asia or the Middle East. In Japan, a popular U.S. chocolate cookie or candy bar isn’t chocolate or cookie flavored; they come in flavors like soy sauce, green tea, and grilled corn.
“If you want to expand internationally, adaptation is key”
A retail business model that works in New York, won’t work in Saudi Arabia, where women aren’t permitted to use dressing rooms and often must remain in women-only areas of workplaces, dining rooms, and shops. Even U.S. regional markets’ tastes are culturally different. Middle Eastern food, sleek modern design, and no-nonsense employees work in bigger cities like New York or Boston, but in the small-town southern U.S. areas, modern soul food, traditional design, and charming employees will be the big hit. Knowing your audience is the key to their acceptance.
Supplying the goods
Any major market in the world has supply line capabilities. Internationally-known companies
are growing all over the world and every one of them has proprietary items. Getting the supply chain in order isn’t a barrier to entry. It is much harder to find the right franchisees than to supply the goods. The world has also gotten much smaller in this regard – for your supply chain management and traveling to oversee franchisees in London or Dubai. Neither are much different than supplying or visiting a franchisee in Hawaii.
“Accept that your product or service may need tweaking for another culture”
Know your limits. There are countries light years ahead of the U.S. in aspects of business. Some markets like Dubai, Kuwait, and Saudi Arabia innovated the delivery process years ahead of the delivery trends in the U.S. and, frankly, U.S. firms couldn’t do much to support those franchisees when it came to delivery – the area had already adapted beyond U.S. systems. Accept that franchisees may not need training on delivery in the Middle East or customer service in Japan. Your U.S. policies may not be up to the best business practices elsewhere.
Rules and regulations
No one wants to admit that there may be legal barriers to expansion. The world is your oyster, right? The good news is that there are experts to guide the process. Find a partner that knows business and franchising laws and regulations in the markets you are targeting. As much as customs and culture will guide your plans, legal and tax considerations vary from locality to locality and country to country. Protecting your intellectual property, trademarks, recipes, and proprietary property is important. If you can’t secure your name, branding, design, and recipes, is it worth the risk of copycats stealing the brand? Recently a large U.S. burger chain lost the rights to trademark the name of their top-selling item in the European Union – to the benefit of their competitors.
No market, whether it be one city over or even across the ocean, should be entered without a vision, cultural knowledge, a rock star franchisee, and an airtight plan.
7 THINGS TO REMEMBER WHEN EXPANDING ABROAD
1. Recruit industry-savvy franchisees
2. Adapt to the culture
3. Strategically choose the market
4. Supply chain shouldn’t be a barrier
5. Know your limits
6. Find an expert in global franchising
7. Be bold, no one wins who doesn’t take the chance
THE AUTHOR
Dan Rowe is the CEO and founder of Fransmart, the franchise development company responsible for the international growth of brands like Five Guys, Qdoba Mexican Grill and The Halal Guys.
