Six 'Cs' for international franchise expansion

Written on the 26 July 2013 by Griffith University

With many franchises looking to expand their franchises internationally we thought it was time to revisit Asiawide Franchise Consultants CEO Albert Kong's six key considerations when planning international expansion.

The six 'C's of going international outline some key considerations which need to be addressed in the international expansion planning process.

Key International Expansion Consideration #1: Country conditions
Country conditions, such as political stability need to be considered.

For most companies, going to the troubled areas in Nigeria would be unwise due to the religious clashes there.

The social environment is also important a premier home/housing cleaning service franchise may have difficulty doing business in a nation where labor is very cheap, etc.

Key International Expansion Consideration #2: Contract / Regulations
Make sure you are aware and know how to overcome all the bureaucratic obstacles, such as the degree of government control in your international location.

For example, in Indonesia, the court will recognise the contract in the Indonesian language and not English; and in Vietnam, all franchise systems have to be registered with the Ministry of Industry and Trade (MOIT).

Key International Expansion Consideration #3: Consumers
Do consumers in the local market have the spending power, and especially, will they spend on the kind of product or service that you are providing?

For example, Koreans transact a lot through the internet, so is your product or service easily available via cyberspace? Will it infringe on your franchisees' territories?

Key International Expansion Consideration #4: Corner/Real Estate

• Is the kind of premises you want readily available?
• How affordable are they?
• For example, if you are in the convenience stores business, only ground-level units are suitable.

Key International Expansion Consideration #5: Communications and Logistics

• Is English commonly used?
• How far is the airport/seaport?

Key International Expansion Consideration #6: Candidate's (franchisee's) commitment /character/capital available

• If the franchisee candidate is introverted, is he/she suitable for the business?
• If the candidate has many other businesses, how does he/she plan to manage the franchise you have awarded him/her?
• Does the candidate have access to sufficient capital?

Note: The above is not an exhaustive list. Asiawide Franchise Consultants can run a 2-day workshop on "How to evaluate a franchise" for international expansion.

(The Asia-Pacific Centre for Franchising Excellence is also developing a number of resources to assist franchisors identify the best countries for their international expansion, and Austrade provides a range of resources on international expansion for Australian Franchisors, and also international franchisors looking to expand their operations in Australia).