Real Estate

Overseas Expansion—Becoming an International Restaurant

It’s hard to imagine, but some American restaurants have more franchises overseas than they do in the U.S. In fact, a lot of them. According to an article in The Balance, there are 14,344 McDonald’s in America and 21,914 McDonalds internationally. Most of the KFC franchise operations are located outside of America and Burger King comes close to 50/50.

What calls them away from the land of the free and the home of the brave? The world has become much smaller and as businesses and their employees travel the globe, they want to get a taste of home overseas and those that have been here want to experience America’s fast-food flavors in their homeland.

 

How do American Fast-food Chains Succeed in the International Market

It’s interesting to note that the fast-food chains of America don’t simply take their brand and drop it in a foreign country. Those that succeed change their menu according to local tastes. A Domino’s Pizza in India will have curry as an option while one in Japan will offer tuna as a topping. While McDonalds has stayed true to its Double Quarter Pounder, you can get Asian sauces to go with your Chicken McNuggets, flatbread instead of a bun in the Middle East, parmesan cheese with olive oil and pancetta on your burgers in Italy, and a beer with your Big Mac in Germany.

Not only are flavors different, but portion sizes also adapt to the various cultures with most being smaller than the standard American meal.

The bottom line is this: Those restaurants that succeed overseas adapt their menu and brand in order to meet the tastes and expectations of a growing global enterprise. In addition to adapting, they also, just as they do in America, support the communities that support them.

 

How to Expand Internationally

The challenges are many when you decide to take a concept overseas. One of the hardest to standardize and control is the supply chain. Trying to maintain the same standards as well as declining availability can limit menu items as well as quality control. Understanding the country’s import and export rules and regulations is a vital first step in determining the efficacy of that specific area.

While hourly staff is usually plentiful and the cost of labor often lower when compared to the U.S., the labor pool for managerial staff can be limited. Another consideration is the brand’s story, which seems to play a more integral part and is of more importance to consumers overseas.

Design also varies dramatically from country to country. An article in Restaurant Development & Design pointed out that design and architecture can be of much greater importance to people and cultures of foreign countries. Wendy’s is a two-story glass-enclosed lounge in the Republic of Georgia while Popeyes features a second-floor balcony and 12-foot windows in Costa Rica.

In addition to the local people’s tastes and preferences, you will need to understand their dining habits such as what time of day they prefer their largest meal. Some cultures prefer more meat while others are predominantly vegetarian.

Labor laws and specific regulations of the particular country you are entering will also need to be defined. It may be best to start closer to home such as entering the Canadian or Mexican markets first and then expanding from there as you get to understand the intricacies of foreign enterprises. The Philippine’s and the Middle East markets also seem to be active areas for U.S. franchises.

 

Success Stories

Project Pie first came into creation in 2012. James Markham, owner, focused on a brand known for custom pizzas made in less than 5 minutes. It has since become an international franchise, starting in the Philippines and recently signing a deal to build 60 units in England, Scotland, Wales and Ireland. As franchises become popular, requests will start coming in from other areas in the region and a chain-reaction evolves. Markham chose to work with an operational partner who understood supply chains and knew the local market—a very good choice for those restaurants entering the international markets.

 

 {{cta(’50ffb343-fb6f-4427-86f0-373463cd0a4f’)}}

Author:
Categories:
Real Estate
Tags:
  • Subscribe to our latest insights

chatsimple

Are you capital raise ready?