International expansion offers opportunities to scale a business or for entrepreneurial franchisees, a new mountain to conquer! However, as much as overseas growth will bring kudos to your business, it may also be fraught with headaches if correct research and pilots are not implemented before full roll out.
Firstly, it’s important to debunk the myth that expansion is easier in English speaking countries such as the US, Australia or Canada. There are cultural and regulatory differences which can in fact be far greater than in non-English speaking European regions.
Often the first foray into international franchising comes from an enquiry from abroad. However, this reactive approach rarely works well. Instead, if you are serious about international expansion, create a list of countries and do a deep dive in terms of research about regulations and things like taxation. PESTLE and SWOT analysis can be helpful and make sure you get proper franchise and legal advice. Think about trademarks and web urls too, as if missed, these details can mean missing by miles.
A pilot in a small country such as Holland can be a useful test bed to trial the concept before embarking on bigger plans.
Really good mapping software and data is key. In the past, I have found a Michelin Road Map used to divide territories in Belgium, and also the two languages spoken, was a disaster cut the wrong way!
Cultural fit is a sensitive and important consideration too. There are always surprises, so be prepared. A memorable exhibition for a greeting card franchise expanding into New York was a new experience for me when visitors removed our entire product range off the stand three times a day, thinking it was a free for all! It was a contrast and a reminder of the regional differences within the US, as in the Southern States visitors had been super polite the week before. In New York, a much more forward approach meant some visitors were asking if we had more greeting cards stored anywhere that they could take home!
This is a light hearted example, however, inevitably there will be situations which may become more difficult. Agreeing how to resolve conflict in advance can be helpful. It is also advisable that key contacts speak English. Where we negotiated a Spanish franchise deal with an English speaking contact proved difficult when the franchise manager we met later had no English at all. Even with the help of Google translate it was not plain sailing.
The decision to go down the master franchise route or split the country up and deal directly with franchisees needs thought. Each has pros and cons. A good master franchisee will enable a more hands off approach but a bad apple means the whole of that region will be sunk.
A master franchisee manual will also be needed, explaining how to run a business. Use ‘Atlantic English’ for all markets and manuals – this means avoiding any shorthand or phrases which may be misunderstood. Phrases like ‘putting your eggs in one basket’ or common acronyms like ASAP may not be understood.
In short, to reap the rewards of international expansion, ensure thorough research on data, regulations across a hot list of countries and test your concept properly.
