What franchisors need to know when it comes to exporting their brand, from concept adaptations to cultural differences.
When taking on the assignment of international expansion, franchisors must understand the requirement for a high level of deliberate planning and intentionality. The complexities that naturally come with the development of brands beyond their domestic borders make the task different from growth within their home country.
Express Employment Professionals was founded in 1983 and began franchising in 1985. Over the past three and a half decades, we’ve grown to more than 810 locations across the United States and Canada, leaving us with only nine to 10 per cent of potential space left for domestic franchise development. We recognized fairly quickly that with limited opportunities available in North America, we needed to consider expansion to other regions that were logical for our business. Through our growth, we realized there are key variables that need to be considered prior to advancing into international territories.
Cultural and business differences
International expansion doesn’t necessarily mean executives can take their brand and place it in a different country without making any adjustments. Business operations are dictated by the social and cultural standards in each country across the globe. Therefore, brands need to be mindful of where they are planning to put their footprint next, and partner with the appropriate organizations to assist in entering the respective market. How a company does business in America might not work in every country, but there are some areas where it could work efficiently. For example, in countries where English Common Law is practiced (including Australia, India and South Africa, among others), business laws are similar, in addition to the legal climate. However, this is where the similarities end.
“Business operations are dictated by the social and cultural standards in each country across the globe”
When we entered South Africa in 2002, we were an immature brand, and success was limited for a good amount of time. With only 17 years under our belts in the States, we were still a fairly young franchisor and didn’t have the proper support structure in place which forced us to face some growing pains as we were trying to accomplish international operations.
Time zone challenges
Parents tend to say that if you have one child, it changes your life. If you have two, it’s more than double the work. The same analogy applies to international expansion, so when you begin to work in another country, adding staff in the different time zones is vital as more support is critical for success. A new headquarters office isn’t necessary, and franchisors can even contract out support, but no matter the avenue taken, the staff must understand the market.
Moving into Australia and New Zealand, we immediately observed challenges with communication at our U.S.-based call center due to the various time zones. To combat the problem, we had to either open a 24/7 call center or create a presence in each market to offer the necessary support.
Being open-minded and adapting
All leaders who took their companies and concepts overseas will tell you there is a gained appreciation on how differently business is seen in the United States. In many foreign markets, business takes a backseat to life, which is unfamiliar to Americans. In South Africa specifically, businesses will begin shutting down two weeks before Christmas and will stay closed until mid-January. Individuals cannot underestimate the massive cultural differences that exist and will need to make it a priority to listen, understand, and adapt to these norms.
“In many foreign markets, business takes a backseat to life, which is unfamiliar to Americans”
Changing the entirety of your business model isn’t necessary as the pure logistics of the brand will not change dramatically, but what is paramount is taking a look at the elements that are often overlooked and those that won’t translate to the market being pursued. Additionally, when you are not on the ground implementing regular methods that are executed time and time again domestically, there are complexities that arise. An example may be how one goes through a Franchise Disclosure Document.
When a franchisor has made his or her mark in a new territory, I’d recommend for them to be flexible and willing to listen to others. There are always fresh and unique ways to operate, and while tweaking to local norms in a new country, you can improve in your home market by taking the time to observe and bring back successful processes to your headquarters. International expansion is not solely taking your flag and planting it somewhere else, it is also bringing a flag back home.
THE AUTHOR
Steve Scully is the executive vice president of sales and marketing at Express Employment Professionals and has played an integral role in the international expansion of the country for six years.
