I had the privilege of moderating a panel on international franchising recently, where my guest panelists were three very smart restaurant industry franchisors with deep expertise in global development.
What struck me when speaking with each of these experts was how well prepared they were for their international expansion and how relevant their approach to global development is to all types of businesses. Having the operational perspective of a franchise business, even if the business is a remote office and not a franchise, will help you to operate better abroad.
Here are some of the key takeaways from the panel discussion to help you with your international expansion:
Go Local
Work with in-country experts with a deep understanding of that culture and the local connections to open doors and smooth all regulatory paths. Ensure that the service providers you work with have true expertise in the exact market you want to expand into, not from a country next-door or pseudo-expertise from abroad. While it’s good to have involvement from someone from your home team who is familiar with your business and who is perhaps even managing the international business, ultimately you will be more successful with local support to assist those who are less familiar with the country.
Operational Efficiency and Documentation
Before you enter a new country, document and refine your entire operational process so it’s something you can transfer to your teams abroad.
Training
Provide upfront and ongoing training on every aspect of your business. Set up a training program for everything from culture to operations to customer service.
Market Research
Go to the market and study it in depth. Take note of all of the similarities and differences. Use your local experts to help you to understand not just the behavior of your target customers but also the reasons for the behavior. Test your product before you invest into a global expansion to make sure you have a product-market fit.
Don’t underestimate the competition and in-country alternatives. Understand the strengths and weaknesses of your competition and clearly understand how your product will be unique.
Supply Chain Alternatives
If you have physical products, you’ll want to have a very solid supply chain set up with several alternatives should there be gaps in supply or even regulations that impact your suppliers. The same goes for shipping and storing of products – have several alternatives prepared for when things don’t go right. Plants close down, there are natural and man-made disasters, government disputes can make it difficult to import from a certain country, and product quality issues will potentially arise.
Brand Clarity and Marketing Support
Even before you go international, be clear about what’s core to your brand and what you’re willing to modify to fit into another culture. You’ll constantly be challenged to make brand, product, and process adaptations. Understand what marketing efforts you can manage globally from headquarters and where you’ll want local marketing support. Having social media guidelines in place, training, oversight, and if needed, the ability to take over is all important.
Oversight
Franchisors are typically diligent about visiting their operations abroad, sending in secret shoppers, doing quality inspections, surveying customers, and maintaining a robust level of oversight. Be prepared for continuous checking to make sure your quality standards are being met.
Contracts
The expectations for remote offices, sales agents, distributors and others that work with your company need to be clearly defined. Everyone should understand the expectations and recourse when those expectations are not being met. Don’t neglect your international contracts and make sure they are both in English and then native language so there are not misunderstandings. Take a look at how detailed franchise agreements are and use those as templates for the level of detail you want to include in your agreements. We suggest you work with both your current legal counsel and also engage international legal experts in the country you’re doing business in. Never skimp on the quality of your international legal team.
Time and Cost Assumptions
Recognize from the beginning that it’s going to cost more than you think and take much longer than you think to get everything up and running. If you are franchising, licensing, or partnering, assume any money you get from franchisees or distributors will be used for setting up the business and making modifications to your initial processes and products. The new business will ramp up slowly and revenue will come from when you have a long-term strategy.
Service Mindset
This is something the restaurant industry understands well and prides itself on more than many other industries. Customer service and having a servant minded approach to doing business is very important in most other countries where personal service is valued and going above and beyond is expected. Even for SaaS products, in other countries you’ll often need to be prepared for adding a service component to your operations.
All types of business can learn from the franchise business model, especially when expanding abroad. Look to these masters at international development with years of success as a model to help you succeed in going global.
Would you like to learn more about preparing your product and marketing for going global? Join Globig today for access to information, resources, and in-market experts who can help you get it right.
