How Franchisors Can Overcome Cultural Differences, Regulatory Hurdles and Supply Chain Issues
Franchisors who want to expand their business globally face numerous challenges. These obstacles may seem overwhelming, but with the right strategies, they can be overcome. The primary issues hindering international expansion are cultural differences, regulatory hurdles, and supply chain logistics.
Cultural differences can make it challenging to enter new markets successfully. Understanding your target audience’s customs, traditions, and values is essential to ensure your products or services are well received. Regulatory hurdles like licensing and permits can also be complex and time-consuming, requiring careful planning and execution. Another major concern is supply chain logistics. Managing cross-border goods movement while maintaining quality, speed, and cost-effectiveness can be difficult.
To overcome these challenges, franchisors must know the best success strategies. This article will provide six useful tips for navigating global supply chain challenges and successfully expanding internationally. With these hints, franchise owners can stay ahead of the competition and position themselves for global growth and profitability.
Learn About Other Cultures
Assume you want to open a franchise in China. It is important to know how the Chinese do business, their correct etiquette, and how culture influences their business approach. By respecting the way of life in other countries and being more knowledgeable about the people there, you can create successful partnerships – or know when your franchise might not flourish in a certain region due to cultural differences.
As you expand into new countries, staying compliant with local regulations, rules, and tax obligations is important.
Understand the Logistics of International Expansion
As you expand into new countries, staying compliant with local regulations, rules, and tax obligations is important. This can become so complex that it turns into a real headache. The solution comes down to doing your due diligence and giving yourself enough time to do so thoroughly and without pressure. However, it’s not always necessary to become entangled in such affairs. You can always outsource this big task to companies specializing in international expansion.
Recognize Hurdles to Manage Your Supply Chain
The challenges begin when an international border becomes involved in your supply chain. But don’t feel disheartened; if it were impossible, there wouldn’t be any international franchise brands. The first important step is to become knowledgeable about what could potentially pose a problem, and then it’s as simple as putting strategies into place to manage or overcome them.
Some common hurdles to managing a supply chain across national boundaries include high shipping costs, managing storage facilities, and building relationships with trustworthy suppliers.
Regionalize Your Franchise
When starting, it’s often wiser (and easier) to focus on one region of the world. Expanding to multiple parts of the globe can be a financial risk and won’t offer a steady, profitable expansion as focusing on a single region might. A popular place for franchises to regionalize is in the Asia-Pacific area due to the region’s technology-driven supply chains and convenient trade routes.
Once you have successfully planted your franchise in one region and have all the necessary cultural and business aspects under your belt, feel free to explore and expand to another part of the world.
Choose Established Supply Chains to Beat Competition
When you set up shop in another country, the chances are that there will already be other franchises, some foreign like yourself, and some homegrown. You might face stiff competition from both, especially if people like to support their businesses or the franchises serve the same market as yours.
Once again, some upfront research can quickly tell you how tough the competition might be in a given region, but even if plenty of others are elbowing their way into a popular place, there is no reason to back down. According to the International Franchise Association, if you have better access to real estate, understand the local culture, and create ties with established supply chains. You’re off to a good start.
Establish a Solid Supply Chain Before Signing Any Contracts
Most franchises that expand overseas sign contracts with a foreign partner, and should you choose that route, make sure that every component of the supply chain is in place and not prone to failures that can impact your business. This is something that should be confirmed before you sign any contracts. Afterward, you can have peace of mind that you have trustworthy hand-picked suppliers and effective trade routes. There is also a decreased risk of legal fallout due to insufficient research and negotiations.
About the Author
Wonil Gregg is the Vice President of Customer Engagement and Experience at DCPerform with 25+ years of experience in the supply chain. DCPerform is a team of engineering and technology innovators providing data-driven supply chain resources solutions. Workings across all industries, DCPerform leverages its partner ecosystem to help our customers deliver a world-class experience for their customers.