Why do international franchises appear in US?

| 28.04.2021
why do international franchises appear in US

Brands with properly selected internal partners have the opportunity to receive a support in the US.

For many years, umami lovers have enjoyed Yoshinoi's signature gourmet beef in the United States, Japan or even China. Fast casual, located in Tokyo and present for many years, is a prime example of advancement in the toughest growth sector of limited services: bringing overseas brand in the United States. This will probably not be easy, yet it's very important and useful.

“Despite the fact that we expand, we remain vigilant and cautious,” - words of Bobby Williams, vice president of marketing for Yoshinoya.

Rica Bisio, a franchise trainer ledding the international development of many companies, such as Popeyes, Cinnabon, said that foreign brands are already at that stage of considering the possibility of international expansion.

“The effect of the world of technology has made barriers, existing many years, broken down” said Flynn Decker, CEO of Bonchon, a Korean well-known franchise specialized on fried chicken. He believes that now people are much more interested in something different from what they grew up on. International companies and cuisines are helpful if the right course of management has been chosen.
Bzio believes that people have three ways for introducing country concepts into other countries. The first is the development of the company. It is expensive, but it works flawlessly. But in new for franchise country it is closed to residents if the brand is not asserted. When a brand starts franchising, the first wave of corporate stores is successful for operators.

As for the national development programs, they are related to the granting of the right to open stores to organizations in the new market. Representatives of the brand country usually run the business. Keep in mind that some franchisees have been missing an entry point for much longer.
The last and widely used way of international development is getting the master license, which consists of selling rights domestically. Simultaneously, the purchasing organization can open stores, and local residents can purchase franchises. While such way is profitable for franchisors as well, it is not so light for franchisees due to the lack of support.

international franchises in US

Bizo believes that it will be problematic if brands are from countries where English is not widespread. Marketing, communications, operating manuals can be illegible. You need time and efforts for the whole process. Bisio advises only very experienced franchisees to use this method.

Yoshinoya took a company-owned approach to development. Japanese CEOs arrived in the US to kick-start the brand. According to Williams, everyone in the Yoshinoya home office contributed to the brand's development and was a great support. More than 70 of the 100 US offices are currently owned by companies.
“We changed management team five years ago,” says Williams. "The management team is based on a solid foundation existing more than 30 years." These factors enabled them to concentrate on modifying, improve everything possible to better serve customers from America. So it was a seriously elaborate process.

Individual franchisees are the backbone of Bonchon's organic success. Soy-garlic and spicy sauce with igneous Korean red pepper, which are created by the founder, are still produced in Korean city and have inspired store openings for many years. In 2005, the founder understood that he want to bring them to New Jersey. From that moment on, a large number of franchisees began to open stores in coastal areas, for example, in New York or California. The company's headquarters in New York and two brand stores were opened 10 years ago. When a controlling stake was acquired from the founder, Decker became CEO.
“Interestingly, Dekker didn't know about grandeur of this strategy. "We had success because of popularity of sauces, flavor and chicken", he said.

Decker understands that the strategy is non-traditional. To keep the strategy simple, you need proper product support. Bonchon is already common among American people enjoying fried chicken. This is a very important advantage, because one of the most common problems with overseas brands is that they are unfamiliar to people.

Yoshinoya have added in menu habanero sauce and garlic butter tilapia and other items, which Americans love. So he got through this problem. “We stayed Yoshinoya, but we tweaked the menu a bit,” vice president said. Instead of static offers, customer can choose his base, protein, vegetables and sauce which he wants.

But product refinement is not the only thing brands resort to. You meet less risk of opening in a new country, if you initially reach out to regions such as New York and places with many people from this country. Bonchon was attracted by this strategy; Nowadays, the brand has settled into the East and West coasts and in the Midwest.

However, traditional sapience is not always confirmed. Very widespread among Hispanics and Caucasians Los Angeles is the most popular East Asians. Because of such unexpected moments and nuances, potential franchises identify foreign brands with accuracy. Bisio said about interviewing American franchisees. “Don't get carried away by a uniqie, brilliant idea. Franchisу business is connected with risk reduction. Be curious about the brand’s ways to reduce your risks in this country.”

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George Karishik

Written by
George Karishik
Franchise expert Topfranchise.com