How Successful Franchises Like McDonald’s Thrive in Foreign Markets

Miraculous you call it, babe,
You ain’t seen nothing yet.
They got Pepsi in the Andes,
They got McDonald’s in Tibet.

 

Roger Waters. “It’s a Miracle.” Amused to Death, Columbia, 1992.

You want proof we’re living in a global economy? Travel to any city in any nation in the world and count just how many international franchises you see on the street. Ace Hardware has stores in the United Arab Emirates, 7-Eleven has become surprisingly trendy in Denmark and KFC has become a Christmas tradition in Japan.

Just how can we account for the global success of these franchises? How do these foreign corporations manage to not just survive, but thrive in the face of local competition?

In his book “The Multiplier Model,” franchise expert Mark Siebert digs deep into the international success of McDonald’s and describes exactly how the franchise’s adaptability and brand story have made it a multicultural juggernaut.

Adapting to Local Customers

According to Siebert, franchises that succeed in other cultures do so by meeting the needs of their customers, even more so than the local competition. “The bought their products more efficiently and passed those savings along,” he writes. “They experimented with different products to find out which ones the consumer liked best. And, most of all, they provided the customer with a consistent brand experience from one market to the next.”

McDonald’s often sources its ingredients locally to account for regional tastes; the beef from grass-fed cows will have a different marbling and flavor than that from grain-fed cows, and potatoes can vary wildly depending on climate and growing conditions.

But more than that, McDonald’s often makes tweaks to its menu in an effort to cater to their local clientele. Here are some international McDonald’s offerings you probably won’t find in the United States:

• Australia: Gourmet Angus Truffle & Cheese
• Canada: Poutine; McLobster (lobster roll)
• China: Mashed Potato Burger; Bacon, Macaroni, and Cheese Toastie
• Egypt: McFalafel (vegan falafel wrap)
• Hong Kong: Rice Fantastic (burger with rice  patties instead of buns)
• India: McCurry Pan; Maharaja Mac (chicken burger); McAloo Tikki (veggie burger)
• Japan: Ebi Filet-O Shrimp Burger; McChoco Potato (fries with chocolate sauce); Idaho Burger (burger with bacon and a hash brown patty)
• Korea: Shrimp Beef Burger
• Mexico: McMolletes (McMuffin with refried beans and pico de gallo)
• Norway: McLaks (salmon burger)
• Poland: Cordon Bleu Burger
• Spain: Gazpacho
• United Kingdom: Bacon Roll; Mozzarella Dippers
• Venezuela: Empanadas

Staying True to the Brand

Siebert says that another key to the international success of McDonald’s is its focus on brand over product. “No one ever questions the consistency of the brand,” he writes, “because McDonald’s takes such care in selecting suppliers and preparing their products. But more important, McDonald’s knows that its brand is more than its food.”

For example, despite being best known for its burgers (“Billions and Billions Served”), McDonald’s does not sell beef in any of its 350 locations in India. In fact, about half of the menu is comprised of vegetarian options. “Yet, the McDonald’s brand remains one of the strongest in the world (and in India) despite these product line differences,” writes Siebert.

So what exactly is the McDonald’s brand, if it isn’t hamburgers? According to Siebert, McDonald’s branding lies in its core values of quality, service, cleanliness and value. In fact, many franchisees still tell stories about how Ray Kroc, founder of McDonald’s, used to pick up litter in the parking lot of the restaurants he visited, dump it on the counter, and then scold the offending restaurant owner. Kroc took his brand’s values seriously, and any McDonald’s franchisee who wants to succeed had better do the same.

Ultimately, it’s not the product or the name that drives success; it’s the brand story and the ability to adapt that lets global franchises thrive in competitive international markets. If you’re interested in reading more about international franchising opportunities and strategies, check out these related articles:

• Chapter 20: International Franchise Opportunities
• How Do You Know When You’re Ready for International Expansion?
• Why Chick-fil-A Franchise Is Making a Big Bet on Expansion into Europe and Asia