How International Brands Can Gain U.S. Success
21 Feb 2020 - Restaurants should start by focusing on consistency.The goal for any franchise concept is a brand that is sustainable across different markets and demographics. Many franchisors hope to develop a brand that can see growth and impact within different cultures across the globe; however, creating a successful global franchise concept is easier said than done. How does one take a brand from one part of the world and bring it to another, without compromising brand consistency or cultural integration?
Embrace Past Success Stories
While many franchises begin in the U.S. and then seek global expansion, the reverse can be an interesting approach to explore. By leveraging success in previous markets, even those in a foreign country, a franchise can expand its footprint in the U.S. Successful franchises have a process and a model that works for a reason, which can sometimes lead the development and operations team to approach new regions and cultures in the same way. However, that is not always the best method.
Depending on the level of brand recognition in foreign countries, there is an initial expansion plan in the U.S. that should be considered by franchisors—employ the brand recognition by targeting communities in the U.S. that have direct ties to the culture of the origin country. For example, café and bakery concept Paris Baguette, with thousands of locations in Korea, initially targeted Korean-centric communities domestically. Though these locations are the first foot in the door, franchisors should keep in mind that these markets are niche, and a new franchise sales plan may be needed to further the growth of the brand.
The first thing for a brand to do when considering expansion into another country is to look at the concept's previous successes, which can help assess the road map for further development, whether it leads you to develop a similar plan or an entirely new one. Questions to consider:
Where was your location most successful?
What were key drivers of success?
Who are the primary consumers at those locations?
What implications does the store design have on success and consumer?
Market Research Reigns Supreme
After considering the answers to these questions, franchisors should begin extensive market research. This research will help determine target DMAs that will be sustainable for the brand. Additionally, franchisors should take a look at real estate trends, target customers, competitors within the market, as well as get a sense of the advertising market surrounding the location.
For Paris Baguette, the research showed that consumer needs in the U.S. did not equate to those in Korea, leading the brand to develop an entirely new franchise sales strategy.
One quick key learning from market research for this concept was the real estate options in the areas that were targeted. Due to the difference in city density, the U.S. provided Paris Baguette with the opportunity to offer customers larger stores. In contrast, in Korea, the cities are incredibly dense and lend more towards a grab-n-go concept for customers.
Franchisors should take the essential findings from the market research and develop a strategy that will work for their specific brand.
More extensive real estate options can profoundly influence a franchise sales strategy, such as turning its focus on more seasoned restaurateurs. For example, larger footprints for Paris Baguette locations meant that franchisees would be responsible for on-site baking in comparison to the other franchisees in Korea, where they receive products that are ready for consumption.
Continue Cultural Consistency
Another key player in a franchise strategy, especially in terms of expanding into a new country, is consumer culture. Cultural differences within the communities will impact various aspects of a brand, including hours of operation, products sold, holidays celebrated, and more.
With differences in cultures across countries, there is a fine line for franchisors to walk to ensure brand consistency without losing cultural integration. Franchisors should take a look at competitors in the surrounding area to ensure that you are appeasing your market and consumers. By reviewing what competitors are doing, franchisors will have an example to follow (or not follow based on the response from the public) in terms of cultural synergy.
Paris Baguette, with its Korean origins, continues to honor traditions from Korean and Asian communities at all locations. Now that the expansion is moving into other cities in the U.S., it is the job of the brand to bridge the two cultures together by including more American traditions into the new locations to celebrate the domestic consumer. Similar to cultural traditions, menu items are an essential aspect of a brand that needs to walk the line between consistency and cultural integration.
When developing an expansion plan for franchise sales, particularly when expanding into the U.S. from a foreign country, an essential element for franchisors to focus on is research. Developing an understanding of the target DMAs, their culture, their communities, and their real estate options will all lend heavily to a successful expansion for any brand. The learning curve for a new country is steep. Yet, with the proper research both into the franchise’s past success as well as the new target markets, brand consistency, and culture integration, your brand can be sustainable in any country.