Proven Match


Expanding Overseas? Considerations You Can’t Ignore

As we begin to cast our eyes to 2017, it’s not a stretch to consider expansion opportunities in our franchise brands, whether that be domestic or overseas. But during this week’s Proven Match blog edition, we’re going to tackle a few of the considerations of expanding your franchise brands outside the borders of the U.S. 

First, let’s look at some positive statistics about overseas expansion opportunities for franchise brands. It’s widely accepted that the U.S. is typically only concerned with things happening inside our own borders. But, if you’re looking for consumers eager to consume, you’re missing the proverbial boat. Altogether, 95 percent of all global consumers can be found outside of our borders. That’s quite a lot of market share for which to capitalize. In addition, many franchise brands manage to achieve a certain prestige and added value for opening new operations in certain global hotspots. Several QSR chains have actually been given credit for propagating a positive American influence simply by operating in foreign countries.

Despite these attractions, there is much to consider in the way of risk mitigation before testing the waters of an overseas market. It goes without saying that governmental rules and regulations can be vastly different than conditions experienced here. U.S. franchise brands need to know that most individual overseas markets have different franchise disclosure laws than at home. 

First and foremost, you’ll need to seek the advice of experts dedicated to the field of overseas market expansion. These include the verticals of insurance, legal, manufacturing and strategic marketing industries. Trust us when we say that there seems to be no shortage of consultant groups and agencies willing to vie for your business. But be sure to do your own due diligence. Ask which companies and brands they’ve worked with before and which overseas markets they’ve penetrated. How are those businesses faring? If at all possible, try to secure a consultancy that has specifically worked within the franchise industry.

Guidelines for your franchising operations may also look vastly different than in the U.S. This is another area where relying on qualified international consultants will help you avoid the pitfalls of conducting business in foreign lands. The adoption of country-specific guidelines will go a long way to shield the brand from any form of damaging legal action—a worst case scenario.

If considering a move into an overseas market, you may be interested in a step and repeat process, which targets one specific country for expansion at a time. Utilizing a test case scenario that can replicate successes while eliminating errors would never be mistaken for a poor strategy.

Perhaps the most important consideration is one that should be the most obvious—cultural differences. Depending on which countries a franchise brand expands, the future of the operation is going to depend largely upon how they’re perceived in the local market. Relying on a strategic international partner already familiar with how business is conducted in a particular country or market is paramount to success.

It seems that much of our advice always comes back to thorough due diligence. This investigative process is important whether you’re shopping for a franchise concept or testing the waters of international market expansion. So be smart. Be vigilant. Be successful.

As a franchisor considering foreign expansion, you’ll first need to know which existing and potential franchisees best fit your business concept. Proven Match is the proven solution in determining those factors. Through our proven behavioral assessment techniques, predictive analysis becomes a predictive success for your franchise concept. If you’re ready to show your leadership by getting started, give us a call and we’ll put you on the path to a more productive year in 2016.

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