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Expansion into Foreign Markets

 

Non-U.S. Franchises

Franchise Direct’s 2009 Top 100 ranking contained 15 non-U.S. companies. In 2010, two new non-U.S. companies have been added to Franchise Direct’s Top 100 Global Franchises. Yogen Früz, a Canadian frozen yogurt retail franchise, has ranked number 15. Yogen Früz has grown to be a world leader in the frozen yogurt category, with over 1200 locations operating in 25 countries around the world. Yogen Früz continuously develops ingredients and innovative new products in order to stay abreast of consumer trends and provide its franchisees with all the ingredients they need to succeed.

The second non-U.S. company to make the Top 100 for the first time this year is TeaGschwendner. TeaGschwendner a popular German tea retailer currently operating in 145 locations throughout nine countries and four continents, is one of the leading global specialty retail tea chains. The tea industry has experienced double digit percentage sales increases annually in the past decade as consumers sought a nourishing, comforting drink to help them relax in today’s fast paced world. Loose tea accounts for billions of dollars in the U.S. alone and globally. More than three billion cups of tea are consumed every day, making it the most popular drink in the world after water. TeaGschwendner is changing the way Americans think about preparing and drinking tea.
 

Non-US Franchises in the Top 100 Global Franchises

 

International Franchise Country of Origin 2010 Ranking 2009 Ranking
InterContinental Hotel UK 6 4
Yogen Früz Canada 15 0
H&R Block Canada 20 14
Kumon Japan 22 22
Tim Hortons Canada 25 12
Cartridge World Australia 33 27
Engel & Völkers Germany    38 39
Pita Pit Canada 43 49
WSI Canada 54 54
Pirtek Australia 60 33
Action Coach Australia 63 83
Tea Gschwendner Germany    75 0
Naturhouse Spain 77 10
Bark Busters Australia 87 36
Coffee news Canada 96 92

 

global expansion map

 

 

Expansion into Foreign Markets


There are many reasons for a franchise company to expand internationally but it is most important for success that the company is truly ready. To be ready means the franchisor needs to have a well established and successful operation in their home market. If the franchisor has a well established home market, they are able to achieve better economies of scale once they expand internationally.  The operation at home needs to be able to generate enough cash flow to support the international expansion as there may be a delay in the returns from international markets.

American franchise companies must also evaluate their capacity to support their business operations internationally from their home offices. Taking into consideration the cost alone, it may make financial sense to establish a regional office within the foreign market. For example, there can be up to a 13 hour difference between the U.S. and Asia. This means that something as simple as making a telephone call between the offices can be difficult. Also, due to language barriers, a franchise company may have to have manuals, advertising, websites and training materials translated into the local language to effectively master a market. Franchise Direct’s Top 100 Global Franchises ranks the franchises that have successfully adapted to the cultural differences in new markets and have become successful on an international level.
 

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