International expansion has always been a challenge for every company whether big or small. Tony White, Director, The White Connection and Regional Manager, Gloria Jean’s Coffees, Australia shares his expertise on franchising overseas. He provides consultancy to companies in the areas of business development, franchising, licensing and international brand market entry strategies.
Ramanjit Kaur (RK): Do Indian companies have bright future abroad?
Tony White (TW): Yes, I think they have got phenomenal opportunity. But I think they need to have a strong local brand presence first. The biggest challenge here is that there are so many new opportunities in India that a franchisor needs to maximise the brand presence at the local level first before planning it to take it to another country.
RK: When is the right time to take a franchising company overseas?
TW: When a franchisor feels that s/he has actually reached a saturation point or is closed to saturation point in his/ her own market. Then I think is the right time to take the business abroad because at this point of time, a franchisor already has:
RK: What sort of homework a franchisor has to do prior to finalising the decision to expand overseas through franchising?
TW: A franchisor has to map down the country in which they are planning to enter into. I think the franchisor must visit the targeted country once prior to finalising the prospective franchisee to know about the demands, market culture and franchise laws (if any). The franchisor needs to know that which country has better business opportunities.
RK: What is the role of an area developer while franchising overseas?
TW: An area developer is quite a good strategy depending on the size of the market. Like in India and China, we offer or sell more regional/ master franchisees than direct franchisees (we have broken China into four major regions.) So, the main reason to hire an area developer is to let the market develop under a master as s/he has more knowledge about the region. It is just like if I am living in Delhi, I can very well develop my business there, but if I want to expand my business in some other regions, it would not be that easy for me. Therefore, regional partners play a great role in developing the particular region by further selling the franchises.
RK: What kind of challenge an Indian company can face abroad?
TW: There are many challenges that an Indian franchisor can face while expanding overseas. For instance, language is a main challenge as there may be markets where English is not very well accepted or understood.. Then, probably supply can be another challenge. Like, if they are supplying out of India then there may be limitations in logistics and supply chains, which can also create a problem.
RK: Any advice for the franchisor who is planning to take his/ her business overseas?
TW: A franchisor has to do everything carefully and diligently. S/he must have patience as it may take a long time to settle but franchising ensures good results in the future.