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Spin on Global Franchising: Larger Franchisors Integrate Locally

Where franchise companies enter countries around the globe to further profits and expand their brand into new territories, regulations may alter the pace of growth and the interaction with locals.  Each country has its own legal regulations in terms of business management and expansion within its borders, and franchisors do well to consider how their business may progress in a new land as well as how it will be received locally.

In some countries, larger franchise businesses entering the scene procure so much business and local customer loyalty that small business owners dispersed throughout large to mid-sized cities are taking note.  This means addressing the changing scene with local governments and promoting new guidelines and regulations under which incoming franchise companies must operate.  Indonesia is one such country, with a number of business owners operating traditional establishments interested in leveling the playing field by promoting new government regulations.

The Indonesian government has offered a listening ear to established small business owners, to coordinate well between allowing major world players to enter the country and invest and playing fair with citizens who have long held businesses that must now compete with global enterprises.  Some of the new regulations involve mandates that require incoming franchise operators to work closely with Indonesian partners as opposed to a majority of international business managers in multi-unit operations.  Likewise, how and where supplies and products are sourced to run each business is getting more focused attention, with a requirement that global businesses procure at least 80% of supplies locally.

Both developments are attempts to unite local Indonesian citizens with a shifting business landscape and require international investors to interact even more closely with local producers of goods to keep the circulation of profits steadily moving throughout the country.  Major franchise corporations continue to work with government officials to find the right balance for expansion that makes sense while appeasing new regulations that may develop as the region sees more investment from global companies.

Franchise companies interested in global expansion must always consider regulations currently in place and the changing social conditions of the countries they plan to invest in, which means keep an eye on how international investors of large franchise companies will be received by governments and local business owners.  With each passing year countries experiencing increased investment may experience changes in terms of how investors are able to invest and to what extent, which naturally affects local businesses and citizens.  As new businesses rise in many countries, jobs are created and new opportunities abound, especially when locals are figured into development plans that respect the needs of citizens in the area.

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