The first thing for a brand to do when considering expansion into another country is to look at the concept's previous successes, which can help assess the road map for further development, whether it leads you to develop a similar plan or an entirely new one. Questions to consider:
- Where was your location most successful?
- What were key drivers of success?
- Who are the primary consumers at those locations?
- What implications does the store design have on success and consumer?
Market Research Reigns Supreme
After considering the answers to these questions, franchisors should begin extensive market research. This research will help determine target DMAs that will be sustainable for the brand. Additionally, franchisors should take a look at real estate trends, target customers, competitors within the market, as well as get a sense of the advertising market surrounding the location.
For Paris Baguette, the research showed that consumer needs in the U.S. did not equate to those in Korea, leading the brand to develop an entirely new franchise sales strategy.
One quick key learning from market research for this concept was the real estate options in the areas that were targeted. Due to the difference in city density, the U.S. provided Paris Baguette with the opportunity to offer customers larger stores. In contrast, in Korea, the cities are incredibly dense and lend more towards a grab-n-go concept for customers.
Franchisors should take the essential findings from the market research and develop a strategy that will work for their specific brand.
More extensive real estate options can profoundly influence a franchise sales strategy, such as turning its focus on more seasoned restaurateurs. For example, larger footprints for Paris Baguette locations meant that franchisees would be responsible for on-site baking in comparison to the other franchisees in Korea, where they receive products that are ready for consumption.
Continue Cultural Consistency
Another key player in a franchise strategy, especially in terms of expanding into a new country, is consumer culture. Cultural differences within the communities will impact various aspects of a brand, including hours of operation, products sold, holidays celebrated, and more.
With differences in cultures across countries, there is a fine line for franchisors to walk to ensure brand consistency without losing cultural integration. Franchisors should take a look at competitors in the surrounding area to ensure that you are appeasing your market and consumers. By reviewing what competitors are doing, franchisors will have an example to follow (or not follow based on the response from the public) in terms of cultural synergy.
Paris Baguette, with its Korean origins, continues to honor traditions from Korean and Asian communities at all locations. Now that the expansion is moving into other cities in the U.S., it is the job of the brand to bridge the two cultures together by including more American traditions into the new locations to celebrate the domestic consumer. Similar to cultural traditions, menu items are an essential aspect of a brand that needs to walk the line between consistency and cultural integration.
When developing an expansion plan for franchise sales, particularly when expanding into the U.S. from a foreign country, an essential element for franchisors to focus on is research. Developing an understanding of the target DMAs, their culture, their communities, and their real estate options will all lend heavily to a successful expansion for any brand. The learning curve for a new country is steep. Yet, with the proper research both into the franchise’s past success as well as the new target markets, brand consistency, and culture integration, your brand can be sustainable in any country.
Gregg Koffler is the Vice President of Franchise Sales and Development at Paris Baguette. He oversees all aspects of Franchise Sales and Development. Prior to joining Paris Baguette, Koffler was the head of Global Franchise Development for Johnny Rockets Restaurants based in Los Angeles California. Koffler also held the position of Chief Development Officer for Orange Theory Fitness based in Boca Raton, Florida. Gregg was also employed by IBA (Smashburger) as their Senior Vice President of Franchise Sales and Administration from in Denver, Colorado. Prior to that, Gregg held multiple positions at CBC Restaurant Corp (franchisor of the Corner Bakery Café concept) in Dallas, Texas, including as Director of Franchise Sales and as Vice President of Franchise Sales.