Thinking of Buying a Fast-Casual Franchise? Read this report first.
QSR Feature
Guide to a Smart Expansion
Karen Spencer is CEO of FranSystemsKaren Spencer, CEO of FranSystems

These types of local associates are able to warn an expanding company about legal restrictions such as requirements for buildings and even expiration dates specific to the destination country. That way, Cofiño says, “you go in with your eyes wide open with whether you want to do business there or not and making sure that your business practices are consistent with the ways the laws are written in that country.”

In addition, Scott points to the financial savings to be had when partnering with a local restaurant company. “When you go at it on your own it becomes very, very expensive,” she says. “Often times it’s better to find a local contact who knows how to work through local distribution and supply chains.”

Scott says that even Coke relies heavily on the “people on the ground” to be successful. “While we are obviously a large global company, we are a very local company,” she says. “So there are local resources like my local associates on the company side and bottler side.”

Cofiño agrees that one of the greatest challenges when taking a brand to another country is distribution. “Obviously you can’t ship everything overseas or vice versa,” he says. “Raw chicken doesn’t travel all that well.”

Distribution and supply chain management could end up greatly shaping a brand once it’s outside of its home country. Scott from Coke says her company always presses companies thinking of expanding to imagine what their concept will look like and how it will differ inside a foreign country.

“We ask them to really understand what their brand will mean,” she says. “Are they going in with a true U.S. format or will it be a variation of their brand? So really do their homework about how they want to be organized.”

All international information, however, doesn’t come with a large price tag. There are also several governmental agencies that offer resources to U.S. businesses looking to go global. Spencer says that while it’s not the resource she sees relied on most, the U.S. State Department does offer information about foreign countries, specifically which ones to avoid.

The agency’s Bureau of Consular Affairs offers up-to-date travel warnings, international security information, and country profiles for businesses on its Web site. Coca-Cola refuses to expand to only three countries: Myanmar, North Korea, and Cuba.

While we are obviously a large global company, we are a very local company.”

Cofiño suggests using the Department of Commerce as a resource. “The kind of information you’re going to get will help you analyze the political risk and foreign exchange risk which is the thing that I don’t think a lot of people necessarily look at,” he says. “Is this a stable government that’s not going to do a Hugo Chavez on you?”

On its STAT-USA Web site, the federal government allows companies access to economic, business, and international trade information for an annual fee of $200 or $75 quarterly. In September 2007, the site debuted its latest free publication. STAT-USA Companion to International Marketing is available on the site’s Selected Publications section. The National Trade Data Bank offers companies commercial trade leads and market insight reports at the same annual and quarterly costs. There, a mere search for “fast food” offers up 250 market insights from as far back as 1998 from countries ranging from Kenya to New Zealand.

Page 1 | 2 | 3 | Next