International Franchising Opportunities – Advice To Franchisors
Mike Shattuck, president of international brands with Focus Brands, offers some advice to franchisors wanting to expand outside of the U.S. He said one has to adapt to the cultural idiosyncrasies of the target countries yet still maintain “the core essence and being of every (franchise) brand”. A franchisor also should be fully committed. Read more on this interview by TheStreet.com.
There are markets such as India, Indonesia and Brazil ripe with opportunity, according to franchise industry experts.
Operating internationalmay require changes to the model, whether that’s to adhere to cultural idiosyncrasies or regulatory laws.
Mike Shattuck, president of international brands with Focus Brands, which owns food-relatedincluding Carvel, Cinnabon, Auntie Anne’s, Seattle’s Best Coffee and Schlotzky’s, among others, offers some best practices to expanding internationally.
How do you build a model that can be replicated even outside the U.S.?
Shattuck: You need to understand you’re probably going to have to adapt your concept or your brand in nearly every market. Coming to the realization that you will need to make that adaption is the first thing.
In many cases it may be a tweak on the menu such as portion size in Asian markets. Sometimes if your product has a spicy profile you might have to take that down a bit — or up a bit. You’ll want to have in India a level of vegetarian classification. You’re not going to go into India with beef.
Secondly, are you sure that you are committed? You can’t do international expansion of a franchised concept halfway. You have to be committed to it. Having spent nearly 30 years in internationalI still see people take brands overseas, but they’re not really ready to make that type of commitment.
If you look at it as a wide-open space where you make a lot of money — and you can — but you’re going to [make an] investment upfront. You’re going to have to build some infrastructure to support it. Selling the franchise is step one. You have to be able to support it, just like you would here, only you’re starting many times from scratch.
How do you build brand loyalty?
Shattuck: It’s not really that much different than it is here. It’s all about providing good, quality foods in a friendly environment. The basics are definitely transferrable. Your target market, your position, you may tweak that, but you’re still in the business of providing value for your money.
What are some common mistakes made by franchises that go international?
Shattuck: Understanding who that franchise partner should be. Oftentimes that’s a mistake that’s made and then you’re in a difficult situation from the beginning.
Many times restaurant brands are more difficult than snack brands. With a restaurant brand, it can easily take two to three years to get to the point where you start realizing a return on the investment.
How much should a franchise change to respond to cultural differences?
Shattuck: To me there is a core essence and being of every brand. And at some point [franchisors] need to question, ‘Is that being compromised by doing this product or by doing this type of prototype or design?’
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