Quite a lot, if you don’t roll up your sleeves and prepare, says Justin Livingston, VP of Global Development for Coyote Ugly
International expansion is not for the faint of heart. The opportunities are almost limitless when you expand beyond your borders but for every great opportunity, there is great risk. As an increasing number of Franchisors begin looking to position their brand for global domination, it’s important to be properly prepared and to understand what might possibly go wrong. It’s exciting to think of taking a home-grown brand and expanding to a global audience of potential franchisees but international expansion is a path riddled with obstacles and for those who don’t make these necessary preparations, it can be a treacherous journey.
Consider for a moment what it will take to become a global concept. Dropping a brand that has been successful in a familiar home market onto a new market with an alien culture is fraught with dangers. Your level of preparedness will be key to your success. Every one of your assumptions should be tested as you enter the world of international expansion.
I’m going to expand my concept internationally; what could possibly go wrong?
The first question you should be asking yourself is “why am I doing this?” Expanding your brand to other countries is exciting but it should be part of your company’s plan and overall strategy. The very idea of going to far-off lands and exploring other cultures is a romantic one, conjuring up fantasies worthy of a sequel to Around the World in Eighty Days. There are many reasons to take a brand international, access to the massive world-wide consumer market, long-term diversification of revenues for the company, strengthening the brand and lessening the impact of a specific market’s economic fluctuations being just a few.
How hard could it be to protect my brand internationally?
This one is likely the most important point and most commonly overlooked. Your brand and your Marks are all you have. Protecting them should be priority one. By granting an international franchise agreement, you are allowing your brand to be represented in a market you don’t fully understand in a location you will likely visit far less than you do to monitor your locations domestically.
There are many things you need to do to protect your brand, ranging from ensuring your Marks are registered in every market, developing an agreement and operations manuals that protect what’s most important, and finding a franchisee partner who will be a good steward of your brand. Once you have the systems in place, execution depends on finding the correct franchise partner and system of franchising. Decide early on what’s important to your brand; what are your non-negotiables? Be sure you are ready to take every precaution to protect your identity through training, processes, contracts, and ongoing oversight of your brand.
My brand works great in my home market, how different could other markets be?
You have a brand and system that works in your home market so it must work everywhere else, right? What could possibly go wrong? The biggest problem with ‘everywhere else’ is that it’s not your home market. There are cultural differences, language differences, religious differences, traditional differences, even landscape and weather differences. Each and every one of these and the hundreds more can impact how your brand is received.
How will your brand translate into the market? Will the local culture embrace your brand? Do your points of differentiation mean the same thing in this new market? Do your brand’s common practices violate any cultural norms of the potential market? Franchising history is full of concepts and products that have failed abroad due to their name, product delivery, or even their core business practices. Do your market research, talk to local consultants and/or government agencies to see what pitfalls may lie ahead.
Assuming that you can enter any market without sensitivity to local needs will set your brand up for certain failure. This knowledge is vital to prioritize which markets to target and where to begin the search for the right franchisee.
I have a great team to help me go international, but how much of their time could it take?
A common mistake in making the leap abroad is trying to do so solely with your current resources. You may have the dream team but just because you have an amazing veterinarian, doesn’t mean you should go to them when you have a toothache. It’s a bad assumption that your star domestic marketing person knows how to market your concept abroad or that your logistics person knows how to source or sail your product to foreign markets. Serious brands hire serious folks for international expansion, which takes time, planning, and full buy-in from management and ownership.
What will happen if your team goes abroad to open a location? What will that diversion of focus do to your existing business? What are the needs you don’t even know you have yet? Seek help and advice from those who have done this and hire or assign one key player to oversee the international program.
How much of my resources could this take?
The assumption that you have “enough” resources can be a costly one. International franchise expansion takes a team of experts and if not planned for, the resource drain could obliterate your core business. There are many costs associated with international expansion before you even get to the starting gate. To be well prepared, you will spend money on legal council both in your home market and target markets to check franchise law, brand protections, and likely some market research. International expansion is exciting. Staring at a world map, the possibilities seem endless.
When executed thoughtfully and with patience and purpose, it allows for long-term success. The world is as small as you make it, but success depends on cautious, informed, strategic growth. So, “what could possible go wrong?” The answer is a lot. International expansion is complicated and international growth consumes a lot of time and money, but the rewards are unrivalled. In the words of the great explorer, David Livingstone, “I am prepared to go anywhere, provided it be forward.”
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Creating an effective support program for overseas franchisees is an essential element of your move overseas, says Dave Hood15 Oct 2018 | Read Article >
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