How to take a franchise to Asia

How to take a franchise to Asia

Vast and varied, the Asia market is a magnet for investors and entrepreneurs. But these same factors mean that great care and preparation must be made before embarking on a program of Asian expansion, warns Justin Livingston

Asia is a kaleidoscope of cultures, traditions and business practices – it’s also a region abounding in opportunities for franchise concepts looking to expand their global footprint. Made up of 48 countries, Asia is rich with culture and full of diversity.

But with many strong or developing economies that merit inclusion in any international expansion plan, Asia can seem a bit overwhelming. Successfully entering the Asian market takes time and careful consideration as well as a targeted approach.

As with all international expansion, it’s critical to pay close attention to how your brand translates into markets different than your home market.

Choosing your targets in this exciting market

Asia is huge. With diverse sized markets ranging from China and India to Bhutan and Maldives, you will first need to decide the size, type, and culture that best fits your brand to maximize the impact of a new market entry. Throughout Asia, some countries are more receptive to franchising than others.

Large markets like China, India, Japan, and Indonesia may seem like obvious targets while smaller markets like Thailand, South Korea or Malaysia may seem more manageable.

Many Asian countries have only begun to embrace the franchise model in recent years so looking to experts to identify good fits for the industry is a must.

Many of these countries are beginning to realize the benefits to economic growth and higher employment that franchising brings, and some governments are offering financial support to brands looking to franchise with them. Easy travel, improvements in communication and improved franchising awareness are making it much easier for companies to go global. 

The roadmap

The range of opportunities offered throughout Asia in incredible in scope and opportunity is particularly strong in the global market. Japan, for example, has one of the strongest economies in the world behind the US and China.

It’s ranked in the top 15% of countries regarding ease of doing business and has an ever-growing franchise market. Decision making is often through a consensus of the group and the process needs to focus on the emotions of the business alongside the facts. 

Contrast Japan to India who ranks in the lowest 20% of countries regarding ease of business but has a population second in the world only to China to see the difference in opportunities throughout Asia.

The first action item when planning your journey into the Asian market is to identify the countries that have the right cultural fit for your brand and those with economies strong enough to support a new concept entering the market. Ask yourself, does your concept focus on a local, loyal, native customer base? Does your concept rely on heavy tourist markets?

Is the price-point of your products or service in line with what the market will withstand? Understanding which markets are a good match will help point your company compass in the direction to maximize your success and best utilize your resources.

Local translation of the brand

One of the largest and most common mistakes a company makes going abroad is to assume you can enter the market without making some adjustments for local cultures and market desires. Even the biggest of brands make local adjustments to their offerings and many Asian markets are great examples of this.

Market research and in-market evaluation as well as local relationships should yield the results you need to develop your strategy and decide what needs to change in your concept’s offerings.

Do your product offering, brand, logo, name, methods, and processes all translate? Be sure to understand these cultural differences to determine what you will need to localize in order to ensure success in the market without compromising the integrity of your brand.

Challenges

Not every franchise will succeed in Asian countries. Markets in this region vary widely in their buying power, as well as in their ease of doing business as discussed above. Consumer tastes and needs vary across nations and not all markets are created equal.

Along with seemingly endless opportunity, there are some serious challenges. Many of these markets are rapidly-changing and finding the right partner to lead your brand into the market is key.

Understanding that each country has its own traditions, nuances, languages and needs is key to success in each market. Because Asia encompasses many countries, a one-size approach to the region is certain to fail. 

Just as localization of your brand will be different for each market, so will the methods to finding the right qualified franchisees. A well-equipped, well-educated development, operations and support program staff focused on understanding these differences will lead to long-term success and growth in this amazing part of the world.

Due to political and local problems, not all countries should be targeted for expansion at this time.

Market research into such factors as personal safety, ability to take money out of the country and the availability of qualified workers should be carefully considered. In some markets in this region an American concept could be a political target.

These are all factors that should be part of your overall strategy as you determine which countries warrant focus for expansion.

The future

With the largest combined population in the world, Asia is a wise and deserving choice for expansion for many franchise concepts. Patience is crucial when entering any new market; taking the time to explore the opportunity in each market and having a strategy that caters to the diversity of cultures is essential. 
 
When executed properly, you will find the right franchisees in each market, enjoy the rich traditions of each new culture, and become a part of this ever-changing, ever-growing region.

Asia is a region with 4.5 billion people and many differences; the approach needs to be tailored to each country to maximize success and build your brand in these most promising markets.

Interested in finding out more about franchising in Asia? Check out our dedicated downloadable Asia series of reports.

ABOUT THE AUTHOR
Justin Livingston has worked in franchising for more than a decade and leads the team at Coyote Ugly Saloon as Vice President of Global Development to develop and implement the international franchise program which currently operates in seven countries. 

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