What can US franchisees and franchisors learn from international franchisors eyeing the US market to expand their system? Plenty. Expanding a franchise is an arduous and rewarding shift in a business that can reap huge gains if done well. Movement in either direction, be it from the US or into the US, requires serious planning.
Many successful franchise operators from countries outside the US aiming to move into the US market can indeed hold their own amidst existing US franchise companies to create healthy competition where a demand exists. For some European franchisors, the US market is one of the major world markets left untapped that remains desirable, and one that could afford much success if the move is handled well. Starting off successfully in one’s home country is key, and evidence that your product or service will be well received is important.
For many European companies, the American market is promising because there is evidence of an existing appreciation for specific types of services or products, space available to build on that appreciation, and reason to believe it’s possible. One well appreciated European import concept that can hold ground in the US stems from the idea of bringing old world traditions and artisanal crafts of various kinds into the US. These traditions and crafts have roots in countries where many American families perhaps originated some generations ago, and this along with the “handmade” feel of the concept is appealing to US consumers.
Whether agreements with a master franchisee are made to bring the brand into the US or decisions are made to move the franchise headquarters to the US altogether, companies have to weigh the costs. Depending on the home market and how well it is supporting the business, franchisors may opt to sell rights to their project and change region. If the aim is to simply capitalize on the potential of doing business within an even larger market and population there may certainly be pay offs, though this alone does not guarantee a brand will find success in a new country.
Some of the legal requirements associated with franchising can impede progress to move into the US, or any country for that matter. Legal requirements can make or break a project or plans to expand, and legal professionals who are familiar with the local territory are essential. For the majority of companies wishing to expand, the franchise regulations are as strict as they come in the US, and this means an expensive endeavor to start and sustain a healthy business in the US. These costs must be considered.
US franchisors and franchisees can analyze many of the same issues when global expansion is considered. What is it that a certain brand bringing a locally successful product or service into a new country has to offer that would really please consumers from another cultural world? Language alone does not decide culture, and regardless of the simplicities associated with same language business transitions between countries, each country has its own past, present, and future. Tapping into that and understanding it, as well as how it relates to a brand and business concept, is what makes transition possible and successful.