I just finished a meeting with a senior franchise specialist of the U.S. Commercial Service Department, which is the international trade promotion arm of the U.S Department of Commerce. It got me thinking about all of the franchised businesses that seem to be depending on their international expansi.....
To provide some context for the purposes of this article, I have lived, worked with and grown highly successful businesses in several different countries over the years and been a part of both some great successes and a few miserable failures when it comes to international development and operations.
I currently run strategic development for Famous Brands International, which compromises both TCBY and Mrs. Field’s cookies along with our Mrs. Fields International on-line gifting business. As our corporate name states, we are a truly an international brand, with a presence in 33 international markets comprising over 275 units operating outside of the US today, and growing exponentially.
It seems that many of the brands I speak with have a desire to grow internationally, but not everyone understands the resources and commitment required or has a plan or the know how to do so successfully. As we speak, Famous Brands International is dramatically ramping up our international program in 2014 with the goal of adding 8 – 10 additional international markets, while expanding our presence substantially in those markets where have already established the brand.
While it is great to have many years of momentum and experience under our belts, you would be amazed at the lessons we are still learning within our organization. One good example is that we recently invested more than 1.5 years of our time and energy — requiring hundreds of hours from a variety of departments, involving a myriad of both internal and external resources, at a cost of tens of thousands of dollars — developing an international formulation for our frozen yogurt products that would negate the need for refrigeration and the shipping of heavy liquids.
The impact on our cost structure, profitability, supply chain logistics and international regulatory problems are enormous, and gives us a huge competitive advantage as we enter new markets and ramp up existing ones. I can honestly say that it took the experience, expertise and commitment of all constituents with a combined knowledge base of decades in the international arena to get this project completed and ready to be rolled out across the globe.
It is exactly this type of challenge and subsequent commitment that brands that want to expand globally must be prepared to face.
Successful international expansion requires that you be on top of your game domestically, first and foremost. I have some very good friends that own and operate hugely successful franchise brands in the U.S. that are currently considering taking their brands abroad. Wisely, they are taking their time and considering all of the potential issues, resource requirements and expertise needed, as well as the subsequent impact on their domestic business.
When and where they should decide to go first will be interesting, and I have certainly offered my advice, for whatever its worth. In the end I know these companies will make the right choices, because they have done such an incredibly great job building their foundation.
In the end, international expansion is not a panacea for a struggling brand, but it can be a huge opportunity for those with the resources and patience required for success.