What do you think is the right strategy?
Expanding a franchise to a new country can be an exciting opportunity for the franchisor and the franchisee. However, before opening franchise locations in a new country, it is essential to consider the potential risks and benefits.
One strategy that some franchisors use is to start their own locations in the new country before allowing franchisees to open their own locations.
In this blog post, we will explore why it can be wise to start your own locations in a new country first.
Establish Brand Presence
One of the primary reasons for starting your own locations in a new country is to establish a brand presence. By opening your own locations, you can introduce your brand to the new market and build brand recognition. This can be especially important in a new market where the brand needs to be more well-known. By establishing a brand presence, you can create a foundation for future franchise locations and attract potential franchisees who are familiar with your brand.
Test the Market
Starting your own locations in a new country can also be a way to test the market. By opening a few locations and monitoring their success, you can better understand the demand for your products or services in the new market. This can help you determine whether expanding and opening franchise locations makes sense.
Develop a Local Supply Chain
Another advantage of starting your own locations in a new country is the opportunity to develop a local supply chain. Working with local suppliers and vendors ensures your products are tailored to local tastes and preferences. This can also help you control costs and improve the efficiency of your operations.
Gain Local Knowledge and Expertise
Opening your own locations in a new country can also allow you to gain local knowledge and expertise. This can be especially important in a new market with cultural and regulatory differences. By working directly in the new market, you can better understand the local business environment and adapt your business model accordingly.
Ensure Consistency and Quality
By starting your own locations in a new country, you can ensure that your brand standards are being met and that the quality of your products or services is consistent across all locations. This can be especially important in a new market where there may be differences in language and cultural norms. By establishing your own locations, you can ensure that your business is being run according to your standards and that your brand reputation is protected.
Attract High-Quality Franchisees
Finally, by starting your own locations in a new country, you can attract high-quality franchisees who are interested in partnering with a proven and successful brand. By demonstrating that your business model works in the new market, you can attract franchisees who are confident in the potential for success. This can help you build a strong network of franchisees committed to your brand’s success.
map out your competition!
What you can also organize well and what you can get a good picture of is your competition. Who are the main competitors, what are their unique market approaches and how can you take advantage of them? How can you help your franchisees with the information you’ve worked out from the competition?
If necessary, you can use this information to tune or tweak the franchise formula and thus adjust it slightly to the new country in which you started. To give the franchisees an even better proposition with your franchise brand.
So? Is it the right strategy to start your Franchise with your own locations?
In conclusion, starting your locations in a new country can be an intelligent strategy for expanding your franchise.
By establishing a brand presence, testing the market, developing a local supply chain, gaining local knowledge and expertise, ensuring consistency and quality, and attracting high-quality franchisees, you can set yourself up for success in the new market.
While this approach may require more upfront investment and effort, it can ultimately pay off in the form of a solid and successful franchise network.