Article

International Success: A guide to global expansion

Local knowledge and adaptability are two key components of a successful restaurant-franchise strategy.

April 29, 2010

Because there are a variety of cultures, customs, and societies around the world, it can be difficult to grow your fast casual brand internationally. Regardless, a plethora of franchises have made the transition and effectively developed abroad. While larger companies have more success because of their brand awareness worldwide, smaller fast casual chains can thrive internationally with an innovative concept and strategic plan.

One of the biggest problems for outside fast casual brands looking to invest internationally is lack of local knowledge. For example, many franchisors don't know the correct placement of advertising in order to generate the target number of leads. Acquiring an experienced franchise recruitment consultant can help alleviate these problems. But it's also important to thoroughly research the economy, market and society of any foreign market you wish to enter. Each country has specific franchising rules and regulations – or lack thereof -- that a franchisor should be aware of.

Fast casual restaurant brands entering the Asian market, for example, should be aware that copyright infringement is widespread throughout, and it is likely that a franchise would find infringements of their designs and logos. A "Passing Off" action against someone copying your concept may be even more difficult to win than in North America or Europe. In China, it is only the large franchisors that have been successful. Expanding in Asia will take significant time and resources, and many smaller franchisors find Europe, Central and South America to be an easier transition.

The U.K. franchise market is one of the most appealing to U.S. franchisors due to the common language and shared culture. It is also the most active and developed in Europe. U.S. food franchises, in particular, transfer well into the U.K. and Irish markets, partially because many U.S. brands are already recognizable in these countries. U.S. franchises currently operating in the U.K. and Irish markets include SUBWAY, McDonald's, Burger King, Mr. Pretzel's and Juice Zone among many others.

A successful global concept is one that adapts to local tastes and cultures. You want to make sure that the menu items will translate into the culture in which you are introducing it. If there is a surplus of vegetarians or health-conscious consumers in the region, tailor your menu accordingly. You should also stay up-to-date with cultural pastimes and events. This summer, the soccer FIFA World Cup kicks off in South Africa. While you may not have the manpower to be an official sponsor of the event like McDonald's, many global fast casual franchisors will be getting involved in events and sponsorships on a local level.

Another factor that contributes to a great global concept is position strength in the home marketplace. A fast casual franchise with the potential to succeed globally must have market share against its competitors in its home market before it travels abroad.

In expanding abroad, differentiation also is critical. Healthy foods and menu diversity is a national trend, yet it's catching on internationally as well. Moe's Southwest Grill, for example, ranked No. 61 in Franchise Direct's Top 100 Global Franchises Rankings – an objective, quantifiable measurement of franchise expansion worldwide. By offering today's health-conscious consumers alternatives to the typical fast-food options, you are increasing your penetration in the marketplace.

Consumers worldwide are also drawn to green initiatives. McDonald's, which ranked No.1 in our Top 100, has jumped on the eco-friendly bandwagon. In an effort to reduce their carbon footprint, McDonald's headquarters provides all their franchises with guidance and support to improve energy efficiency and sustainability. They also strive to protect the health and productivity of their suppliers' fisheries. The company is working with fish suppliers and Conservation International to develop a set of sustainable fisheries' guidelines.

Once you've established your presence abroad, it's important to provide superior training and support to your franchisees whether they may be single-unit franchisees, master licensees and area developers. The people selected to run the international training is very important because you want to ensure the same quality and customer service at your fast casual establishment abroad as you do at home.

Although integrating your brand throughout the globe can be a complex process, you can achieve your international goals with the appropriate amount of research and dedication. If feeling overwhelmed, obtain a qualified franchising consultant to put you in the right direction.

About the author:
Sean McGarry, founder and CEO of Franchise Direct, has spent over two decades in the franchise industry. In 1998, he launched Franchise Direct, one of the world's leading franchise portals, with a network of Web sites dedicated to the U.S., Canada, the U.K./Ireland, Spain, France and Germany. Franchise Direct is headquartered in Dublin, Ireland. Its U.S. office is located in Atlanta.