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QSR Feature
Guide to a Smart Expansion
For companies looking to take their brands abroad, resources are available to make the growth successful and sustainable.
American brands expand abroad

“In Brazil, consumer protection laws are incredibly strict. Every product that’s sold has to have an expiration date,” says Jose Cofiño, COO for Adir Restaurants, master franchise for Pollo Campero. “The humorous part is it’s to the point that wine even has to have a label that has an expiration date,” he says with a laugh.

Despite the fact that Cofiño is Cuban, QSR readers are American, and the joke is Brazilian, the humor is hard to lose in translation. When chains try to move outside their home countries and into the global market, small details like expiration dates can become big problems. While it’s a given that intense market research is required before leaping across the pond, many are left scratching their heads when it comes to avenues to accessing such market information.

According to Karen Spencer, CEO of the franchise consulting company FranSystems, large beverage companies that already have an international presence are a great resource to companies looking to expand outside their home countries. Companies like Coca-Cola and Pepsi—having established relationships with the restaurants—can offer advice about emerging markets as well as operational suggestions once a destination country is chosen.

“They’ll actually help a lot of the restaurant brands because that means they’d be serving Coke,” Spencer says. “A lot of the restaurant brands will tag with their beverage company because [the beverage companies] are already in the country.”

Director of International New Business Development for Coke, Rhonda Legé Scott, says most importantly Coca-Cola helps companies identify why they are expanding. By doing so, the company can create a more successful business strategy for opening stores abroad. Coke makes companies choose among growth, profit, and competition as its reason for expanding.

For example, Scott says many U.S.-based foodservice companies recently have expanded to China and India because of their large populations. She says the growth potential in both countries offer companies room for success in market spaces that might already be saturated in the U.S.

However, says Scott, family-style restaurants are expanding for a different reason. Many are moving outside of the U.S. because that’s where their competition is headed.

“If Applebee’s is going and there’s domination and opportunities, then Outback might go or T.G.I.F. because somebody has charted the path and done the homework,” she says. “And in some cases it’s much easier to be a follower.”

While some chains are creating competition in foreign markets, others are trying to tap into the market experience of established foreign chains. In addition to international beverage companies, Cofiño reinforces the importance of linking with a local partner who would already knows the business and cultural atmosphere of the country.

“There are some countries that require there to be local ownership of the business,” Cofiño says. “So that makes it very difficult. At minimum you have to have a local partner, so it makes it difficult if you’re a corporation to say, ‘I’m going to come in and own these restaurants.’”

Angel Morales, director of the international division at the marketing firm C3, specializes in Latin American markets and says very rarely will outside companies expand there without first teaming up with another brand.

“Preferably, it’s a local brand that then just basically uses their American brand as an arm,” Morales says. “That seems to work out the best especially in Latin America and South America. It’s very hard to compete with the culture so it’s a lot better if you’re helped with a local brand already.”

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