Exporting franchises to the USA. The complete guide to success
Companies must maintain a consistent vision across different markets.
The primary goal of any franchise is to create a sustainable brand that will be relevant and needed in any market, regardless of whether the consumer belongs to a particular social, national or religious group.
Many franchisors want to create a brand that can successfully function in different countries and cultures around the world, but making this idea a reality is not easy. How can you take a franchise that is successfully operating in one region and move it to another without jeopardizing the brand's cultural integration?
Most large international companies started their journey in the USA, successful multinational franchises in other countries can be very interesting to study. Using its success in already conquered markets, the franchise can gain leadership in its sector in the US. Successful franchises have their own original business model, working according to a certain system, which can induce the franchisor to start introducing into new markets and regions. However, this is not always the best method.
The initial US deployment plan that franchisors should consider is to leverage brand awareness. Target national groups in the United States that have a direct connection to the culture your brand is based on.
For example, the Paris Baguette bakery franchise with several thousand outlets in Korea, initially targeting only Koreans, has focused on the local diaspora as it expands in New York. This principle is not the key one, franchisors should remember that this market is a niche market, and a new franchise sales strategy will be needed for the company's further growth.
The first thing a franchisor should do when considering expanding to another country is to look at the success of the concept of his company in previous markets, he will be able to help you develop a strategy for the further development of the enterprise, regardless of whether it will be necessary to develop a similar plan, or completely new.
Questions to consider:
- What location format was the most beneficial for you?
- What are the key factors that drove you to success?
- Who was the main consumer of your product in the previous market?
- Has your store's design influenced purchasing power?
Proper marketing analysis is the key to success
After answering these questions, franchisors need to conduct market research of the market. It will help you determine which media are worth using when promoting your brand, which ones will be the most sustainable and effective in advertising your brand.
If franchisors want to become leaders in their sector, they must keep an eye on the local real estate industry, target customers, competitors, and also have an understanding of the local advertising market.
For Paris Baguette, the study found that consumer needs in the United States did not equal those in Korea, prompting the company to develop an entirely new sales strategy for its franchise.
A key lesson learned from the experience of several hundred franchise entrepreneurs is that in different markets, you need to choose different formats of real estate for premises.
Due to the large difference in population between US cities, Paris Baguette individually approaches the choice of premises in each city, based on its population density.
In contrast, in Korea, all cities are incredibly overcrowded, which makes it much easier to find a uniform standard for the premises.
Franchisors must take key findings from market research and develop a strategy that will work for the benefit of their company and brand.
Different formats of real estate can significantly affect the sales strategy of the franchise and the contracts concluded. For example, the larger area of Paris Baguette stores in the United States meant that the franchisee would have a sanitary responsibility to the franchisor for producing their own baked goods locally, compared to a franchisee in Korea who was supplied with ready-to-eat products in advance.
Observe the cultural characteristics and traditions of the foreign market
Another key factor in your brand development strategy in a new country is the regional consumption culture. The cultural characteristics of the local population will influence various aspects of how the company operates, including opening hours, assortment, holiday promotions, and more.
Due to cultural differences in different countries, franchisors must ensure customer loyalty to the brand from each region where the company is present, without losing multiculturalism.
Franchisors are required to research local competitors in advance to make sure they are providing the best possible service to a key consumer. Having studied competitors, franchisors receive an example of an already operating business in their sector, which allows them to adjust their development strategy for the better.
Paris Baguette, a franchise of Korean origin, continues to honor the traditions of Korean and Asian communities in all regions. Now that the brand's expansion is spreading to cities across the United States, the company's mission is to bring the two cultures together, incorporating American traditions into new dimensions to satisfy the American consumer.
When expanding to the United States from another country and developing a new plan to sell their franchise, franchisors should focus on market research. Understanding the motivation of your audience, their culture, their inner ethnic communities, and their real estate formats are all very important to successfully expanding your brand into a new market. Any new market requires a completely new approach, but with a careful analysis of your franchise's previous successes, the future of your target market, and the brand's cultural integration into the culture of the region, you will definitely be successful.
Founder of Topfranchise.com
CEO Expedition 2009 - 2014
Author of a book «GROW WITH A FRANCHISE»