Justin Livingston, Vice President of Global Development for Coyote Ugly, offers a step-by-step guide to evaluation, preparation, and execution of a global expansion strategy
There are few things more exciting than staring at a world map and considering the almost endless possibilities of global expansion.
A focus on taking your brand overseas can open doors for your concept unlike anything you have experienced with a domestic-only expansion.
The challenge of exploring new markets, cultures, and learning how to adapt your brand for different audiences is exciting – but not one that should be entered into lightly.
Like any good adventure, opening your brand in foreign markets requires a good map.
It takes careful consideration to recognize if your brand is ready to become a global concept and to do so, one must take a patient and serious look at your level of preparedness for the task. In this article, we will outline a step-by-step guide to get you from the dream to the reality of becoming a world-wide franchise concept.
Are you ready to take the leap?
There are many stops on the journey to global domination before you ever set foot out the door. To launch a successful, long-term strategy, one must first examine your starting point and perhaps where you need to be to begin the trip.
Why are you looking to go global?
Your “why” will dictate not only your strategy but likely your target areas, your team, resources needed and much more. Well prepared, researched and properly-thought out plans are likely to set you up for success for years to come.
This won’t necessarily be so with a reactive or ‘ready, fire, aim’ approach. This could spell disaster for your brand’s plan before you ever launch.
Key benefits of global expansion include, but are not limited to, long-term diversification, brand strengthening, and stabilization to better endure economic fluctuations.
What will it take and are we ready?
Resources is a broad term and calculating having “enough” can seem overwhelming. Key elements for expansion that need to be considered in a detailed budget include:
A dedicated team who understand the nuances of Global Business is key. Assumptions that your current domestic team can perform on an international level can be a costly mistake. Getting your ‘widgets’ to your locations domestically and getting them across land and sea on planes, trains, and automobiles is often done by professionals with entirely different skill sets.
Training a franchise location domestically vs. training in a foreign land in a different culture and perhaps through a translator, are two entirely different tasks.
Localizing your brand, product, and business methods takes knowledge, time, and expertise in working in different markets. In addition to differing skill sets, all these new tasks are time consuming, so understanding what that will do to your core business is key.
Take the time to consider all aspects of the new business segment and plan to hire accordingly, making sure that all areas (training, logistics, marketing, business operations, compliance, franchise marketing, franchise sales etc.) are covered, budgeted, and given a plan for hiring, training, and implementation.
A dedicated budget.
You will need resources to develop the International program. Needs can include the team discussed above, marketing to find the potential franchisees, and then execution of the expansion.
Expansion at this level is costly and needs careful planning. Much of the budget will be spent long before you get to a point of seeing any revenue. Understand not only the capital resources needed but the timing of all aspects of the plan.
Localization. Being prepared for cultural differences and knowing how your brand will translate into a new market is critical. Will the local culture embrace your brand? Is there a need?
Do your points of differentiation translate in this new market?
Do common practices of your brand violate any cultural or social norms of the potential market? Finding the ideal candidate is critical to success but ensuring you are entering a market that will embrace your brand is the difference between a successful launch into a new country or a very costly and very public failure.
Making assumptions that your brand can enter any market without sensitivity to local needs will set up your brand for certain failure.
Brand Protection. Your brand and your marks are your most valuable assets and should be protected at all costs.
Protection can be complicated and costly, but you cannot expand without being set up to defend your marks. Legally, it’s fairly simple.
Spend the money to have the appropriate legal counsel both at home and abroad.
They will help you understand the laws of the new market and ensure you have the protections you need from copycats and those wishing to damage the integrity of your brand.
In addition to setting up protections, you must be willing to enforce the policies. Every country’s laws differ in this regard and a full understanding and willingness to spend the time and money to keep your brand safe is key.
By granting an International Franchise Agreement, you are allowing your brand to be represented in a market you don’t fully understand in a location you will likely visit far less than you do to monitor your locations domestically; awareness of this fact and a plan to maintain the brand are key to expansion.
We have a program, where do we go from here?
Now that you have your map, the first stop is telling the world! You need a plan of how you will market, which countries you will target, who your ideal candidate is, and who/how will you sell franchises.
Having a development process to correctly market and thoroughly vet franchise candidates is critical to finding the correct franchise partner. As you begin your international expansion, your first international franchisees will be the proof of concept that will set you up for future, long-term growth into other markets.
Before you can get to training, processes, contracts, and ongoing oversight of your brand, you must find the right potential franchisees. Having the most sellable, attractive, opportunity-rich franchise system is only relevant if you can find an audience to tell your brand story to.
Having a strategy to find potential franchisees will make your dream of becoming a global franchisor a reality. Will you advertise in print medias? If so, what publications? Will you attend franchise tradeshows? If so, which ones in which markets? Will you advertise on franchise websites? If so, which ones?
Will you use international franchise brokers? If so, who and how will you find them? These tasks and more are necessary to start your journey abroad. Each of these avenues has a cost of both time and money associated with them which needs to be part of your initial budget for expansion.
Developing the processes to find and sign these international franchise partners as well as execute the marketing strategy is a very specific skill.
As is the case for other aspects of the expansion, hiring or outsourcing this to folks who understand international franchising and have global contacts is important. Securing domestic franchisees is quite different from securing international franchisees.
Typically, the international programs are much larger, costlier, and have the risks of bringing a brand to a new market. Having the right team to find the right partners is key.
As with domestic franchising, the legalities of business and franchising are often complex. Be sure to have a local counsel who understands your plan and has partners, or can at least guide you to local legal counsel in the target markets.
He or she can then determine the applicable franchise laws, as well as ensure your marks are protected. They will also know how to handle those who may infringe your brand.
You must decide what business relationship is right for your brand. Are you seeking a joint venture partner? A multi-unit regional franchisee? A master franchisee? Will you allow your franchisee a master agreement with the rights to sub-franchise?
Each of these programs carry different styles of business relationship and have different legal ramifications.
Do your research to understand these relationships and find what’s best for you. This will influence your marketing and determine the type of franchisee you are seeking.
We found our perfect international franchisee, now what?
This is the fun part. This is where all the preparation, budgeting, hiring, marketing, legal meetings, and program planning pay off. International expansion is an exciting adventure. When executed intentionally and with purpose, it allows for long-term success and brand expansion.
Though international expansion can be complicated and international growth consumes a lot of time and money, the rewards are unrivaled. For many, seeing what was once a spark grow into a number of actual, opened locations, and then expand into a franchise system, is a thrill like no other. Congratulations, you are a global franchisor.