When you get into a Franchise you may think the world is at your feet with the Franchisor’s experience, leverage and even name. But what happens when you don’t consider the locals? Consider an Italian chain that came to Asia from Europe. One signature item was a Penne Arrabiata. In Asia, chili is eaten for breakfast and the European version was way too mild for local tastes but the franchisor was reluctant to tweak the recipe.
What do you do?
Franchise Growth through Localization
As a franchise brand coming to a new market, if your initial arrival is not met with excitement and lines out the door, you may already be in trouble. Even if you start well, you will most likely experience the drop in business, once you are no longer the new kid on the block or latest trendy and instagramable place in town.
Unfortunately, when you started, you didn’t think about localization. You see, in the growth phase of a franchise, many franchisors stick firm to the principle that you are signing on their concept, their food and their marketing, and as such, it’s not to be dabbled with. From my own experience, there are major pitfalls in this mentality for the franchisee. Restrictions with menu design, recipe tweaks or marketing concepts, will inevitably lead to flattening revenues or a slowdown in unit expansion or worse, BOTH. By negotiating early in your franchise endeavor “localization” rights of the franchise menu, or at least a percentage of the menu, beverage list, and marketing, you will end up being more actively involved in your own business growth and feel more empowered to have a say in critical functions that ensure your success not to mention avoid potential snubbing by the locals.
How to Localize
When taking a franchise F&B concept off shore keep the following points in mind. By doing this you will put you and your franchisor ahead of the game when it comes to planning market entry and inevitable business drop offs.
Franchisor vs Franchisee Perspectives
Even brands like McDonalds®️ learned how important localization was to their continued growth. Localized items such as sambal burgers or green tea ice cream are becoming more and more important, from a volume perceptive and an awareness perspective. People may still be ordering a Big Mac™️ but they came in because of the sign for chili shaker fries. While franchisors need to Dream Global for their founder, share holders or fund managers short term benefit, remember to think local for YOUR long-term success.
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