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When expanding, prepare for a long journey


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Here’s a short quiz for those with expansion on their plate. The right reason to take your brand overseas is:

A. Your brand is mature, you have systems in place and research says there’s a demand for your services or product abroad;

B. You want to use your international travel as a write-off on your taxes.

If your answer was “B,” please flip ahead to the BizWise section. However, if you answered “A,” here are some tips from experts in international deals from a panel at this year’s International Franchise Association convention:

  • International is a long-range business, so make sure your partner will devote the time necessary to your brand.
  • Select partners who have the same philosophy and business style you do.
  • Adopt innovation, Leonard Swartz of iFranchise suggested. For one example, he said, in Japan bicycles are used to deliver pizza. For another, convenience-store franchisor, 7-Eleven, had to alter its operations in Japan to include more frequent merchandise stocking because expensive real estate translated into stores with smaller footprints that could only display two or three of the same item at a time.
  • Look for cultures that have similar tastes when it comes to food. Moe’s Southwest Grill targeted India for expansion because “they have a lot of spicy food,” according to Scott Chorna of Focus Brands. On the other hand, Yoshino Nakajima with Home Instead Senior Care needed to identify territories with an aging population and a high-income level, “because our services are private pay,” she said.
  • Don’t think you’ll be able to charge large upfront fees. The old days when people came over with a fist full of dollars to invest are over, the panel agreed.
  • Check out the CIA (yes, that CIA) website for country profiles.
  • The most common way to expand is through area development agreements. However, you may want a separate agreement for airport locations, because they have both a captive audience and the exposure you need for your brand.
  • Remember: The second most expensive decision you make is hiring an attorney. And the first most expensive decision is not hiring an attorney.
  • Learn from those before you. Colors mean different things in different cultures, as do words. Pip Printing discovered in Denmark, “pip” means “crazy in the head.”
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