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QSR Feature
Guide to a Smart Expansion

It’s also important to note that a recent trend in quick-serves has caused the traditional market research roles to reverse. Spencer says over the last three years more international brands are setting their sights on the U.S. market.

International is a completely different animal.”

“The Thailand embassy contacted the IFA (International Franchising Association) and said, ‘We have some brands in Thailand that want to bring their companies into the United States,’”she says. Although those Thai brands have not done as well as expected in America, the IFA was impressed at the level of market research the Thai government had done and its desire to break into the U.S. quick-service industry. “Initially we went into the meeting thinking, ‘This is not going to make sense. They’re really not going to understand,’” she says. “But when we got to the meeting they really convinced us.”

Just like the obstacles to expanding outside of the U.S., Spencer says what eventually stunted the growth of the Thai brands were cultural differences and pairing with the wrong local partner.

While there are certainly differences in business practices among countries, C3’s Morales says creating an ethnic experience in their stores can prove successful for companies looking to expand into the States. “There’s very little adaptation as far as bringing those concepts here to the U.S. because there’s such a unique culture blend here that you really need something unique to differentiate yourself,” he says. On the other hand, he explains, American brands will often make more adaptations when bringing companies into foreign countries.

Spencer worked on Arby’s expansion to Europe in the ’90s. Without menu adaptations that move could have been financially disastrous, she says. Initial market research showed that the No. 2 selling item in the U.S. would not do well abroad because it contained liquid cheese. “We would have spent a lot of marketing efforts toward saying that was going to be our No. 2 product there and it’s not,” she says.

That kind of market insight can make or break a company’s expansion attempts. “I think that it’s always been an issue in the sense that we wish franchisors would display more discipline when it comes to their thought process when it comes to going international,” Spencer says. “International is a completely different animal.”

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