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Adapting Your Franchise Model to Suit Different Cultures

Understanding the importance of culture and the role it plays in the lives of potential customers in foreign markets could mean the difference between success and failure of a franchise system’s overseas expansion.

When planning to expand a franchise across borders or overseas, that turnkey model must be customized to local cultures. To successfully serve those new customers, you must understand the distinct cultural differences of their countries.

In today’s increasingly global economy, as you look to expand internationally, the idea of “model adaptation” is becoming a common topic of discussion. When it comes to successfully expanding a U.S.-based franchise brand across borders, you will find that the one-size-fits-all approach must be quickly tossed in favor of a more flexible mindset.

At first glance, it seems that changing your brand to suit a particular country or culture goes against everything franchising stands for. After all, isn’t consistency the foundation of franchising? With franchising, shouldn’t customers get exactly the same experience, top to bottom, from franchise to franchise when they walk into a restaurant, retail store, fitness club or print shop, regardless of the city, state or country location?

The answer is yes: customers should know what to expect in terms of quality and experience. Standards for customer service and quality should remain high and never compromised. However, when expanding internationally, you must be willing to be less rigid when it comes to allowing franchisees to suggest ways that the brand may be adjusted to better embrace particular cultures and societies.

Adapting your business model to suit the distinct cultures of different societies is imperative to success beyond U.S. borders. While some cultures mirror those in the United States, most foreign markets present unique challenges.

Literally, this can mean going against everything franchise companies train employees to do here in the United States. Something as basic as always smiling when serving customers might not fit well in certain countries where that is simply not the norm. It can even be perceived as odd or suspicious. This example comes from a real-life experience of one brand that expanded in Asia and quickly learned to undo some of its traditional U.S. employee training practices.

While some cultures mirror those in the United States, most foreign markets present unique challenges.

Flexibility also applies to the actual design of a franchise system’s buildings. For example, when Boston’s Restaurant & Sports Bar opened locations in Mexico, the franchisees opening those locations explained that Mexican families consider dining out as a type of event. In response, the company incorporated play zones into the restaurants to keep children occupied while families dine and socialize. This had not been done before in any of our U.S. locations. The franchisees provided a strong case for how that adjustment to the model would provide significant return on investment due to cultural factors. They turned out to be right: those locations are packed with families on a regular basis, and the play areas are a huge differentiator in the Mexican marketplace.

Likewise, just because one product is a top seller in the United States doesn’t mean it will perform equally as well in a different country. While the appetizer queso is a popular menu item here in the United States, it doesn’t necessarily translate well into the Mexican culture. Many restaurant brands have had to adjust their menu offerings to suit the taste buds of the local culture.

Retailers or home-service providers expanding overseas might have to adjust product types and service offerings based on local purchasing power, as products and services need to be altered according to local economic conditions. But the franchisor must be willing to listen to franchisees who are investing in the brand in international markets and be open to adjusting to make the expansion a successful one.

“Glocalization” – Know Your Market

When looking to adapt a business model to suit a foreign culture, it’s important to consider the impact of cultural and local market demands. As noted earlier, these factors are often different from those that drive success in the United States. Company executives should begin their international expansion journey by bringing in staff members with extensive local market experience. It’s all about finding people with the right skill sets and expertise to best accomplish the task at hand. Hiring staff members who have knowledge of the market in which your organization wishes to expand increases its odds of success.

Although it might seem like a no-brainer, another factor to consider when adapting your business model to suit a different culture is to research the market you’ve targeted for expansion. Even if your business considers its products or services to have global appeal, it is in the franchise’s best interest to concentrate efforts on one or two key markets first.

Just because one product is a top seller in the United States doesn’t mean it will perform equally as well in a different country.

Once the company has established specific target markets to adapt a business model you should consider an internationalization strategy. A strong brand retains its core values and identity, but tailors its message to suit individual foreign markets. “Glocalization” means a franchisor should think global, but be local. This includes combining the idea of globalization with that of local considerations.

Franchises expecting to succeed in global markets must often also learn new ways of viewing business practices, including adapting employee training to suit each culture. Pay close attention to training criteria within your system and make sure that employees’ training is on cultural standards and not the standards that are set for U.S. employees.

Another not so obvious adaptation to a business model regards social media and online presence. In this increasingly digital world, you should put increased focus on localizing/adapting your company’s website and social media presence to fit the local market culture.

According to a study performed by the European Union in late 2012, only 18 percent of Internet users said they would make a purchase from a site that was not in their native language. This poses a problem for companies such as B2B that rely heavily on e-commerce.

Adaptability: The Difference Between Success or Failure

Here are several key points to remember when tailoring your business model to suit different cultures:

  • Consider the impact of cultural and local market demands. These factors are different from those that succeed in the United States.
  • Research the market you wish to expand. Even if the products or services have global appeal, concentrate on one or two key markets to begin with.
  • Think global, be local. Franchisors need to have a global perspective and be sure to keep their business linked to the latest technology, trends and information. But also make sure to have a local corporate office with talented employees who can keep the company connected to the needs and concerns of customers.
  • Familiarize yourself with local business practices. Pay close attention to training criteria and adjust standards based on the market.
  • Be flexible and open. Take into account the new market’s demographic and what appeals to consumers. Adapt online and social media presence, localizing and adapting the company’s website and social media tools to fit with market culture.

Taking these points into account will allow you to adapt your proven model so it functions efficiently in different cultures. The most basic definition of adaptation is to adjust or change oneself to different conditions or a new environment, and as Albert Einstein said, “the measure of intelligence is the ability to change.”

Mike Best is the COO of Boston’s Restaurant & Sports Bar, a Dallas-based restaurant concept. He can be reached at 972-484-9022.

 

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