We asked a handful of franchising insiders what they consider as the building blocks of successful international expansion
It's a people business. Regardless how systematic your franchise approach and complete your operational documentation, ultimately you need the right people to make the business work. Also, we're more similar than you may think. Even with a franchise concept, tried and tested across various regions, markets and cultures, we hear concerns about the specifics and differences of local markets, with standard models being questioned. While we need to be sensitive of each culture and their ways of doing business, in general many concepts, procedures and approaches are transferable.
New franchisors should have a rigid franchisee selection process & criteria – make sure you know the type of person and profile you need to make your franchise successful, and don't make sacrifices on that – it is better to turn people down and keep searching for your type of franchisee than enter into unproductive partnerships.
They should also gather proof of concept across several markets to help overcome fears of local variations, while still being wary of cultural differences – the more you can demonstrate success stories and the replicability/scalability of your model, and the more transparent you are with that information, the more likely it is that your franchisees will stick to the core fundamentals and not try to re-invent the wheel! Finally, keep it simple! A franchise concept is only scalable and replicable if the core operating model and processes are simple and can be emulated by a variety of people with different skillsets and personalities. The more complex the model, the less likely it is to succeed.
One of the biggest surprises for a brand whether expanding from an independent business to a franchise or a franchise looking to expand overseas is the amount of resources expansion consumes. The effort to expand correctly and safely can be overwhelming if you don’t do the proper research or try to take shortcuts. Having the right team on staff (which usually means hiring experts at what you are trying to do) and the appropriate budget is key to success. Many concepts find themselves tasking current staff members with the expansion which not only creates a distraction that can compromise your core business but often puts individuals into roles or tasks that are greatly outside their skillset. It’s a bad assumption that the team you have managing your current, successful operations can manage expansion efforts without sacrifice to what’s currently driving your revenue. Investing up front in the staff, resources, tools, and strategies for expansion is the only way to position your brand for long-term growth and success.
A lot of franchise companies recognize international expansion as an attractive opportunity, but they sometimes underestimate the customization needed and think that tailoring their brand to fit a particular country or culture goes against the franchising model. Before starting the process you need to determine if you’re willing to evolve and adapt your business model to match different societies. This will be imperative if you want to succeed.
When successfully expanding a brand internationally you need the right partner, the right market and the right deal. I’ve found that while it’s important – and possible – for a brand to retain its core values and identity from market to market, they must tailor their messages and often even their products or services to suit the individual market that is being targeted. A key part to finding success while expanding is to think globally while acting locally, meaning that you must have a good understanding of the distinct cultural differences that can affect your brand and you must be mindful of nuances of the country you’re entering. Brands need to take a thoughtful approach to how certain countries will be using and interacting with their products or services. I’ve learned that adaptability is really the most important piece to the puzzle. The difference between success and failure can be willingness – and the ability – to change.
Franchising is a partnership in many ways. What people don’t tell you is in many cases the franchisor is the controlling partner. This may or may not be a bad thing, in fact most often it’s a good thing. The franchisor will force a new business owner (Franchisee) to have business discipline that they may have not had if they were an independent. Assuming you follow the recipe that has been tested and successful in the franchise system that you invested in its unlikely that the franchisor will be very controlling at all. More often than not it is when a franchisee deviates from the proven system that causes the franchisor to flex their controlling power. This for the most part can be an uncomfortable conversation so people don’t tell you the reality of these circumstances.
An inspirational new web video series where we meet the business leaders and influencers in International Franchising.
Expense Reduction Analysts (ERA) – the world’s leading franchise in cost and supply management and winner of Global Franchise Magazine's “Best Business Franchise” 2018 – increases its global support staff by 30% to maintain pace with the growth of its international network of franchisees.13 Nov 2018 | Read Article >
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