1851

Globalization is becoming more and more prominent, with the trend leading to a significant shift in the way businesses operate and expand around the world. Franchising, in particular, has capitalized on the opportunity for international growth.&nbsp;1851 Franchise spoke with&nbsp;<a href="https://www.linkedin.com/in/loulongo2/?utm_source=1851franchise.com&utm_medium=article&utm_campaign=globalizations-effect-on-franchise-expansion-2726548" target="_blank" rel="nofollow">Lou Longo</a>, international consulting practice leader at&nbsp;<a href="https://www.plantemoran.com/?utm_source=1851franchise.com&utm_medium=article&utm_campaign=globalizations-effect-on-franchise-expansion-2726548" target="_blank" rel="nofollow">Plante Moran</a>, and&nbsp;<a href="https://www.linkedin.com/in/lisa-plonka-cpa-cfe-95a25a15/?utm_source=1851franchise.com&utm_medium=article&utm_campaign=globalizations-effect-on-franchise-expansion-2726548" target="_blank" rel="nofollow">Lisa Plonka</a>, CPA, CFE, Consumer Goods Practice Leader at Plante Moran, about the effects of globalization on franchise expansion.&nbsp;<h3>The Allure of International Franchise Expansion</h3>Market saturation in domestic territories is a key factor in the decision to expand across borders. When franchisors have grown into all the viable markets in their own country, they have to broaden their horizon. This is especially true if the brand is situated in a highly saturated industry and the brand is facing competition from other domestic brands.&nbsp;The promise of untapped markets and the chance to diversify portfolios is enticing for many brands who are ambitious to grow on a large scale.&nbsp;“In the United States, we have 400 million out of 8 billion consumers worldwide,” said Plonka. “So there's a great opportunity to expand a brand for having increased revenues and having that global reach.”In addition to the somewhat obvious economic incentives, gaining brand recognition on a global scale is also a huge incentive for franchisors, especially those looking to establish themselves as the brand of choice in a given industry in a company where their competition does not yet exist.&nbsp;Expanding a brand into international markets can be rewarding, but it comes with many challenges.&nbsp;“There are positives and negatives to global expansion. One benefit is the increased connectivity around the world; the world really has become smaller, and it's easier to reach people through social media and other means,” Plonka said. “But on the flip side of that, if you're thinking about expanding a brand, especially if it's a food-based or retail brand, the supply chain can be one of the biggest issues faced by a franchise. You need to make sure that you're maintaining that quality and consistency of products, which ultimately is the goal of franchising.”While franchise models are inherently replicable, making a transition into foreign markets easier, these foreign markets come with diverse cultures, new regulatory frameworks and varied consumer behaviors the brand may not have encountered domestically.<h3>Challenges and Strategies in International Franchise Expansion</h3>To access the immense potential of a new, foreign industry, franchisors must complete comprehensive market research. In addition, they also need to understand the legal and regulatory landscape of a new jurisdiction.“What you're bringing to the franchisees in a foreign market in terms of infrastructure support and the requirements may be different in each market,” said Longo. “You’ll need to understand how you're going to support your local franchisees and what their needs will be, versus your home market. That should be in place ahead of actually entering the market so you don't get a false start, because reputational risk is high when you first enter a market.”Successful international franchise expansion often relies on finding the right partners. By cultivating relationships with local stakeholders, franchisors can leverage their local knowledge and expertise for long-term success. One strategic approach is the master franchisee model; in this model, the franchisor selects a local partner to spearhead recruitment, training and support for franchisees on behalf of the brand within a given country or region.&nbsp;<h3>Realizing the Benefits of International Franchising</h3>Globalization has changed the game of franchise expansion, opening doors to new markets and possibilities. By leveraging local expertise and resources, franchises can adapt their business models to resonate with diverse consumer preferences and market dynamics, leading to continued franchise growth for years to come. However, while the prospect of international expansion can be incredibly exciting, Longo advises keeping your emotions in check to allow for logical decision making on what is truly best for your brand.“What we find in our consultancy practice with organizations that are going international is the enthusiasm can cause them to not do some of the base research that they would do if they were doing something in their home country,” he said, “and the most successful organizations actually temper the enthusiasm and make data driven decisions.”Interested in learning more about franchising? Check out these stories:<ul><li><a href="https://1851franchise.com/franchising-basics-what-is-a-franchise-agreement-2725476#most-recent-stories">Franchising Basics: What Is a Franchise Agreement?</a></li><li><a href="https://1851franchise.com/what-is-a-franchise-discovery-day-and-how-should-i-prepare-2725333#most-recent-stories">What Is a Franchise Discovery Day and How Should I Prepare?</a></li><li><a href="https://1851franchise.com/what-is-a-franchise-lawyer-and-why-would-i-need-one-2725334#most-recent-stories">What Is a Franchise Lawyer and Why Would I Need One?</a></li><li><a href="https://1851franchise.com/franchise-failure-rates-understanding-what-factors-determine-a-franchises-failure-or-success-2725347#most-recent-stories">Franchise Failure Rates: Understanding What Factors Determine a Franchise’s Failure or Success</a></li></ul>

Franchise Globalization: Unlocking Expansion Opportunities

1851 Franchise

The temptation of accessing diverse cultures, markets and economies has propelled franchises beyond the borders of their country of origin.

Globalization's Effect on Franchise Expansion

globalizations-effect-on-franchise-expansion

TruBlue Home Service Ally

Why This Franchise Broker Became a TruBlue Home Service Ally Franchisee

why-this-franchise-broker-became-a-trublue-home-service-ally-franchisee

Caring Transitions

Exploring the Flexibility of Owning a Caring Transitions Franchise: How You Can Build a Business that Fits Your Lifestyle

exploring-the-flexibility-of-owning-a-caring-transitions-franchise-how-you-can-build-a-business-that-fits-your-lifestyle

Keke's Breakfast Cafe

Restaurant Business: Keke's Breakfast Cafe Expands Nationally With Denny's Backing

restaurant-business-kekes-breakfast-cafe-expands-nationally-with-dennys-backing

Biscuit Belly Franchising

Biscuit Belly Named to Nation’s Restaurant News’ “100 Under 100” After Seeing 40% Growth in 2024

biscuit-belly-named-to-nations-restaurant-news-100-under-100-after-seeing-40-growth-in-2024

Sola Salons

FourCornersSun: Sola Salons Opens in Lakeside Village

fourcornerssun-sola-salons-opens-in-lakeside-village

Buying a Franchise Masterclass

 Franchise Opportunities

Get Support Buying a Franchise

How to Buy a Franchise White Paper

How to Buy a Franchise

How to Sell Franchises

How to Grow a Franchise

Find a Franchise Supplier

1851 Franchise Opportunities

Franchisor News

Franchisor Power Rankings

FranCamp Mastermind Summit

Franchise Development Website Builder

Franchise Resources

What ALEC-Laffer's Report Means for Franchising

Website Awards

Power Rankings

About 1851

Advertise on 1851

Contact 1851 Editorial

Terms of Use

1851 Login

GROWTH CLUB LOGIN

facebook

instagram

twitter

linkedin

youtube

McDonald’s Is the Latest Franchise To Bet Big on Beverages with 500-Store Premium Drink Test

mcdonalds-is-the-latest-franchise-to-bet-big-on-beverages-with-500-store-premium-drink-test

Friendly’s Parent Company Acquired by Multi-Unit Franchisee as More Owners Take the Lead in Brand Acquisitions 

friendlys-parent-company-acquired-by-multi-unit-franchisee-as-more-owners-take-the-lead-in-brand-acquisitions

Subway - John Fitzpatrick Named CEO - Breaking News - 1851 Franchise

Subway Names Jonathan Fitzpatrick as New CEO, Effective July 28

jonathan-fitzpatrick-subway-ceo-leadership-change

AI Is Reshaping Franchising: $100 Billion Valuations and Hyper-Localized Advertising

ai-is-reshaping-franchising-100-billion-valuations-and-hyper-localized-advertising

Mega Franchisee Sizzling Platter Acquired by Bain Capital

mega-franchisee-sizzling-platter-acquired-by-bain-capital

Hooters Leans Into Franchising With Closure of 30 Company-Owned Stores - Agg - 1851 Franchise

Hooters Leans Into Franchising With Closure of 30 Company-Owned Stores

hooters-franchise-model-company-owned-closures

"Come in, We're OPEN" sign against abstract background

Small Business Optimism Dips, Raising Concerns for Franchise Owners

small-business-optimism-dips-raising-concerns-for-franchise-owners

Hely and Hiral Patel Bring Their Longtime Dream to Life With The Brass Tap

brass-tap-franchise-pasadena-maryland-hely-hiral-patel

1851 Keyword - The Secret To Succeeding With a Part-Time Franchise Is Picking the Right Model

The Secret To Succeeding With a Part-Time Franchise Is Picking the Right Model

part-time-franchises-picking-the-right-model

Navy Veteran and Professional Artist Couple Open Caring Transitions in Texas

Navy Veteran and Professional Artist Couple Set Out to Build a Purpose-Driven Business With Caring Transitions in Texas

navy-veteran-and-professional-artist-couple-set-out-to-build-a-purpose-driven-business-with-caring-transitions-in-texas

Why This Real Estate Broker Decided To Bring Caring Transitions to Central Texas

caring-transitions-san-marcos-kyle-chad-hardin

Sola Salons Franchisee Grows Salon Freedom Into a Multi-State Powerhouse 

sola-salons-franchisee-grows-salon-freedom-into-a-multi-state-powerhouse

Globalization's Effect on Franchise Expansion

MORE STORIES LIKE THIS