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Franchisors have a certain level of pride in the location where the business started. With brand recognition, extensive knowledge of the local market and the ability to test efficiency, operators know their businesses intimately. When a franchise launches, the franchisor will typically aim to grow with people who know the local community and have a level of local pride. But as with all franchisors, the executives have an eye on growing an international presence. Below are the three steps needed to open the first international franchise locations – and one precaution for franchisors to consider.
First, every country has a distinct culture that franchisors need to learn confidentially and understand the functional differences of the new market. From there, franchisors can build a strong and steady flagship franchise location to ease the waters as franchisors enter each new country. Finally, franchisors should aim to integrate the business model to match the local demand without losing the core of what makes the business, well, the business. However, if it isn’t going to work in a certain market due to a variety of reasons, one big reason or a lack of preparation, don’t force it. Other opportunities to grow will always exist without trying to fit a square into a circle.
1. Invest in the local community
While franchisors have the intimate knowledge of where they built the business, to expand internationally, franchisors need to tap into the local insight. As mentioned, each country has its own culture, language and business environment that needs to be analyzed. In the franchise business’ home country, the franchisor will typically have an instinctive knowledge of the culture, language and business practices that won’t easily transfer to a new country, no matter how similar the cultures may be.
However, expanding internationally should begin with a similar country. For franchisors in the United States, Canada might be the logical launching point for international growth. While Canada is a different country with its distinct culture, it has a variety of similarities to the United States which can help franchisors find success.
Even if the new location has a similar culture to existing locations, research the new locations in depth. During that research, franchisors have to ensure that they are investing locally. Each local market will have its own experts from the business consultants to the marketers who can provide local perspectives and insights to help franchisors get small things right. Franchisors need to ensure that they understand the bread and butter of the new country and how the product or service will fit in before expanding to that country.
2. Build a strong flagship location
Most franchisors think the first step to international franchise expansion is selling a master franchisee, or a franchisee to serve as the franchisor of the brand in a selected territory. And, yes, a master franchisee is important and a great launching point for expansion. But, it can be difficult to secure a master franchisee at first. A master franchisee will likely want to see some proof that the franchise model will work and thrive in the new country. This is where a strong flagship location will come in handy.
“For franchisors in the United States, Canada might be the logical launching point for international growth”
The flagship location will serve as the first success of the franchise model in the new country. With a franchisee that is dialed into the business, franchisors can build trust with the new owner and potential owners while providing the support and guidance to grow and succeed. Once franchisors have the first person who is willing to dip their toes in the water, other potential business owners will see that first success and dive in. Once franchisors have the successful franchisee to demonstrate the brand’s ability to develop and expand internationally, franchisors can begin to attract master franchisees. With the strong numbers that this flagship location earns, the owner clears the way for the next several franchisees and then the master franchisee to join the franchise system.
3. Integrate business model locally
Ideally, the first owner or the master franchisee would be a local business consultant, but if they aren’t, they can still succeed. As a franchisor, there are other opportunities to build upon such as investing in a local business consultant. With master franchisees – and all franchisees – franchisors need to provide plenty of assistance.
By providing master franchisees the training, the support and the tools to succeed, they will be able to replicate it for new franchisees under their leadership. Master franchisees tend to be experienced operators who can succeed with the franchise roadmap provided by the franchisor. By sticking to the core business model and how it works, business models have some flexibility to adjust and integrate into a new culture. While there is room for adjustments to meet the local demand, the core of the business should still be able to function in the new location. But again, don’t force a square into a circle.
For the junk removal industry specifically, all the sustainable businesses are playing the long game. Sure, it’s cheaper to throw out cardboard than to recycle it. But often the mission is about more than just sensible business practices. For example, Junk King is focused on re-using materials whether through donations to non-profits or recycling scrap materials and e-waste. If we can repurpose items and increase our sustainable footprint, it makes our business worth doing.
The COVID-19 precaution
In 2021, it’s important to understand the approach to the pandemic that each country took as franchisors plan for expansion. What industries were designated essential? How did businesses adjust to meet different consumer demands? Everyone learned a lot during the pandemic and franchisors should research how franchise brands in their industry were affected in the new country.
Overall, franchisors need to invest the time, money and communications into the new country that is targeted for expansion. By researching the new country, franchisors can invest in the local economy, build a strong flagship location and integrate the business model seamlessly into the new country.
In 2005, Michael Andreacchi cofounded Junk King out of his two-car garage in San Carlos. Since 2009, Michael and his team have franchised more than 100 locations across the U.S. and Canada.
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