As any franchise-based business begins to grow and expand, its leaders are confronted by the question of where in the world to move next. I have always believed that mastering your “hometown” is crucial before taking the leap to new markets.
For my business, this meant realizing success where I first opened up shop, in East Haven, CT, then branching out across the U.S. before seeking the right overseas markets.
Because I come from Pakistan originally, making the jump to UAE, Saudi Arabia and other countries in the Middle East and Southeast Asia, was a “natural” move for me. These are also markets which are typically seen as risky or difficult for some other American businesses, but made sense strategically for me since I am so ingrained in the culture and business environment.
A first step in aligning with franchisees abroad is to do the homework necessary to determine if there’s a market for
the product. Next, ask yourself, does a franchisee business model already exist or do you need to educate potential business partners? When picking a location, start where you are already culturally familiar and comfortable, and know the language – this will help make conducting business
Upon emigrating from Pakistan to the U.S. as a child, I was fascinated with American culture, values and products. I found inspiration in movies, television and cultural figures. I learned great lessons by using motivational figures such as Henry Ford as role models. I soaked up my new home culture like a sponge and vowed to succeed in the United States first. Now 34 years and 1200 franchises later, moving beyond borders is SOP for me and my company.
Here are some wise words to keep in mind when moving your business beyond borders:
“Obstacles are those frightful things you see when you take your eyes off your goal.”
Don’t lose sight of the prize—the United States. Before moving into international markets, make your mark in the U.S., since it presents the most abundant opportunities to franchise. At the end of 2013, the U.S. was home to 757,453 franchise establishments. If it’s not working here, fix it before making any moves. This solid foundation will enable you to more easily “sell” your concept to foreign investors who can’t resist the cachet of American brands.
“The only real mistake is the one from which we learn nothing.”
I was young and inexperienced when I opened my first franchise and I made several missteps and mistakes, but I learned from them. One in particular yielded this advice: listen to your franchisees and incorporate their
advice into decision-making. Early on, franchisees learned our company’s system and operations from a clunky three-ring binder which was constantly updated and not a great tool for new or existing employees. Upon receiving complaints about it, I developed a “secure terminal” and supplied video content that could easily be updated. The technology was embraced by employees and is now a stand-alone product, nXstep®, which we sell to many other franchise businesses.
“My best friend is the one who brings out the best in me.”
You can compare finding the right business partners to getting married—it’s a relationship, not a sale. We take our time “courting” potential franchise partners ensuring we have met all their needs and “covered all the bases” required of a franchisee. We course correct and make adjustments for the cultural differences from country to country. Distance may make it harder to manage businesses overseas, so the perfect partner you can trust is crucial. Make sure you both have the same goals and vision for the future of the business. When searching for the right
partner, I often recommend starting with the “airport test”. Ask yourself —if you were on a plane next to this person, would you wish the flight was delayed or lasted longer because of how much you enjoy spending time with them? If the answer is yes, you may want to add them to your short list! You will say no to a number of suitors and that’s okay. The health of the brand and business is more important than the quick buck. Invest the time to find the “right” partner to avoid damaging the brand in the future.
“Anyone who stops learning is old, whether at twenty or eighty. Anyone who keeps learning stays young.”
Even after you’ve established a strong business in the U.S. and successfully penetrated the international markets
overseas, there will always be more for you and your colleagues to learn. Before I went overseas, I did my research and learned by interviewing other professionals in international business; querying them about the mistakes they made and getting their advice. Keep in mind, those with experience were once in your shoes and can offer insight which you can often apply to your own situation. I learned from another international franchisor that it is ok (and at times better) to walk away from a market until you can come back strong.
He also taught me that the most important decision you will make in expansion is the partner not the market. The right party (with proven resources) will make you successful in almost any market but this is not as easy as it sounds!
Try to look deeper than the excitement of going international and the associated profit potential. Be realistic and proceed with caution.
The bottom line is that no one business strategy suits all companies planning to go abroad, but gaining a few pieces of advice from someone who has “been there, done that” is a good way to start.
Tariq Farid is the founder and CEO of Edible Arrangements, which has has over 1200 franchise locations in 49 states and 14 countries. He also is the founder of several other successful businesses including software company NetSolace, which simplifies IT systems for franchise companies and other businesses in order to increase productivity.