How These Brands Overcame the Cultural Barrier and Went International

You’ve probably heard the voice inside your head before. It might sound a lot like Lifestyles of the Rich and the Famous host Robin Leach.

“This palatial estate is home to one of the world’s most successful entrepreneurs who made a global fortune through franchising…”

Visions of jetting off to survey a growing worldwide network of successful locations might pop into your head. Overseeing rapid expansion in far away exotic locales is the goal, as growing wealth and influence is cultivated through the coveted prize of international success.

Unfortunately, for most of us, those visions remain merely a dream. Because the reality is: there are a lot of barriers to overcome to make international growth work—from the products your brand offers to cultural, financial, regulatory hurdles—just to name a few.

The good news is: hundreds of successful franchisors have done it, and they’ve laid out a great roadmap for international success in the process. Mega brands like Subway saw international as the next big success opportunity, and have quickly taken advantage.

“There’s an opportunity for changing pace,” Subway Chief Development Officer Don Fertman told QSR Magazine. “If we’ve got something that tastes good, we’ve got something that’s a good value, something that’s convenient and appropriately adapted to the local taste without losing our original concept, then we have an opportunity to grow in those markets.”

But, for most brands, quick international growth hasn’t always been easy.

“Investors and customers are usually excited to be growing in another country or another culture with a ‘western’ brand, and the American ideal does help sell development in many places, but that’s doesn’t hold true everywhere,” said Hair Parra, Vice President of International Development for Wing Zone. “There are still areas of the world that remain challenging; places like Russia and China and some parts of the Middle East where there can be anti-American feelings in some areas that you have to overcome. And, there are places we just aren’t comfortable going into yet, even if there is strong growth opportunity. You have to take into account things like the threat of terrorism, malaria, and food supply safety before you even start to think about expanding there.”

Parra, who has worked in international franchise development capacities for more than 30 years with brands like Domino’s Pizza and Papa John’s Pizza, says a franchisor’s first barrier could even trickle down to the product they offer.

“For us at Wing Zone, because chicken is one of the bigger things people eat in almost every country, we had a built in advantage. It doesn’t have the stigma of beef or pork in some religious cultures, and that has helped us. But, in other cultures, we have an uphill battle to climb even on that. In Saudi Arabia, for example, we had to adjust our menu to add more tandoor type flavors, and we were initially very successful with that and even with our burgers, because people knew those tastes profiles. They hadn’t tasted the flavors of our Wing Zone wings. Once they discovered those flavors, the wings quickly became top sellers, but we had to work to educate them on those tastes” said Parra.

Regulatory laws can also present a challenge, and can vary widely from country to country. When Wing Zone prepared to open its first restaurant in Malabo, off the West coast of Africa, for example, the brand ran into trouble getting its famous wing flavors through the customs process.

“When you import things into Malabo, everything has to be individually labeled in their language, with specific expiration dates on each individual package, even if those packages are inside a larger box or shipping container. It all has to be done in accordance with their laws, or it’s not allowed in. In other countries, alcohol is strictly banned. You can’t have it at all, so even ingredients that might be cooked with alcohol can be dumped into the sea. You need to thoroughly research things like that,” Parra said.

While it can be exciting to be a pioneer in bringing a new type of franchise concept or service to a country, cultural differences can present challenges for customers too. In Malabo, believe it or not, queuing up in a line remains a foreign concept to many people, so even the process of ordering became a challenge for Wing Zone.

Which Wich Superior Sandwiches, who will have nearly 40 open international locations in 2017 following the recent signing of a 10-unit deal in London, works to streamline sourcing as much as possible in its international locations.

“Supply chain and marketing functions, which are typically centrally managed in the U.S., must be localized to the country. Exporting all products from America limits the local competitiveness of the brand due to cost. Each country has its own vendors and effective channels when it comes to reaching the consumer with marketing,” said Which Wich vice president of international operations and development Alex Oswiecinski. 

Even if brands are able to navigate all of the cultural barriers, brands must still decide when the time is right to expand outside of U.S. borders without sacrificing brand consistency or putting operations at risk.

“There is no magic number to going international, but you have to be mentally ready and in the right place as a brand,” Parra said. “Companies that are successful generally have at least 75-100 units and have gone through the growing pains successful franchisors must go through domestically. They have the right people, and they also have a team that understands international development. That’s a critical component.”

Still, rolling the dice on international development can pay big dividends in the long run.

“In every country you open in, it’s a brand new deal and new challenge,” Parra said. “It’s like opening a brand new concept each time. But, it’s worth it to tackle those challenges head on. Many of the companies that go international, long term within 10 years, or less, their revenue shifts to become even larger from international than from domestic. Look at the big soft drink companies. 80 percent of their revenue now comes from outside the U.S. That can be a big boost to your brand and help build your ability to get a level you’d never be able to achieve otherwise.”