“The decision to take your brand internationally, through various partnership structures, has many prerequisites in order for the expansion to be successful. This is not a decision that can be steered by ego or a misguided sense of self importance. Before you blindly throw a dart at a map, you need to assess your internal infrastructure to determine if you are ready to move forward. Insights from Andreas Karlsson
, who grew Wagamama’s international restaurant count from 3 to 35 restaurants. In 2012, he opened the first international restaurant of Denmark’s ‘Sticks’n’Sushi’ group in London.
Before asking yourself ‘When’ is the right time – the first and most important question to ask is ’Why’ should you be going abroad with your successful business? Consider the impact such a move will have on your organization today, both operationally and financially. If your organization does not have the strength and infrastructure to support both your domestic growth as well as having the additional operational skills to focus on making your first international move a success you run a severe risk of jeopardizing and damaging your brand. Losing focus on your ‘bread and butter’ can negatively impact your ability to continue growing and strengthening your brand successfully on your home turf.
Crossing borders for the first time is an exciting development for any restaurant brand but be cautious of how you communicate this within your organization. It‘s good practice to be transparent with your managers and staff when the decision is made. This will help your domestic operation understand that their contribution, small and big, is critical in making the new international project a success.
Before moving into a new market, know your key domestic consumer demographic intimately. Your new territory must be able to support or have the same or similar consumers as you do in your domestic market. Don’t underestimate seemingly small factors, such as flight times and visa issues, because they could have a bigger impact than you think. Another small but important consideration is local regulations and laws and PEST factors. Research these and conclude how accommodating the country in mind is to international trade. This will play a major factor in how efficient your operation can become.
Follow a territory penetration plan to target the ‘Low hanging fruit’ countries for your early expansions. Don’t take your brand to a market that doesn’t know who you are. You will waste resources, time and money simply educating the consumers about your concept and product. Find out how well known you are, invest in a pre-opening market survey early and when doing so remember to ask the right questions, you will reap the rewards later.
Is there a core following already? Find out who they are, what advice your fans can give you. Find them and speak to them. For example, when more than one interested group approaches you with a partnership request, this is a strong indicator that your brand is in demand in that territory and might have the potential to succeed. Most operators’ approach to the strategic
plan of crossing borders is with a ‘push demand’ rather than a ‘pull demand’. The challenge is that you very rarely find the right partner; the right partner more often finds you!
Have a detailed list of pre-determined criteria that are mandatory and cannot be compromised before you even start discussions with any potential partners. Ensure they have the competencies, resources and facilities needed as well as a proven track record in their abilities and that they reflect and mirror your own standards, visions, expectations and phil-osophy. Research them, ask them for references – if they are serious about a partnership, they will appreciate this -level of detailed and exhaustive explor-ation. Your first agreement is the most important one. Finding the right legal platform and model will help you when your organization is crossing further borders in years to come.
Be honest with the groups you are talking to – Let them know you are exploring more than one group – however, when you chose who you are intending to work with, let all involved know. There are no short cuts to finding the right partner. There must be patience to spend time together, explore each other’s operational knowledge and long term perspectives. Don’t make mistakes such as choosing a partner just because they are sitting on the perfect location for your brand. This is the wrong approach, as even the best location can be mismanaged and spoilt by the wrong operator. The three simple steps are partnership first, then legalities and then location. In that order. Always.
Make sure your franchise or license agreement is sitting on your shelf collecting dust. If you refer to it or read it for the first time again the year before renewal, you know you have succeeded with a good partnership. When it comes to location, the more you know about your own location requirements in your own country the better; however, this is where your partner’s local knowledge is crucial. Don‘t rush in with pure excitement and take the first location that comes along. Extend your trust to your partner and listen to their suggestions and recommendations. Couple it with your own insight into your home country’s location success factors and together, you should be able to make a strong choice.
Location, location, location – is true and important wherever we are… Your brand might be able to carry a secondary location at home, however, never underestimate the time it takes to build up the brand awareness in a new country. But this can only happen once your brand has been operational. Prior to that, when dealing with your first opening, make sure you execute what you know.
Starting to experiment with your menu offering before opening your first restaur-ant indicates that you have not done your homework well enough. The first year in operation will be the year where you tweak and adjust the menu offering – an 80/20 rule of thumb is a balanced approach. 80% of the items stem from the menu offering in the home country of the brand and 20% of items tailored to the territory, assuming, items are on brand and approved. The only other changes that should happen are of a mandatory nature, for religious reasons or for reasons such as local import laws or supply chain restrictions.
Regardless of the industry, whether it is electronics, fashion, automobiles or food and beverage, concepts can only successfully cross borders if they get their product and the execution of them right. Worryingly, this obvious point is overlooked far too often in the F&B industry. But it cannot be stressed enough that the physical product with which we earn our money, the quality, flavour profile, pre-sentation and the execution is of utmost importance.
A weak product can never be subsidized or carried by a strong service team or great location for long. Guests are much more educated, discerning and perceptive then they were a decade ago. If you have a substandard product, the guests will know and if you haven’t invested in your product, then don’t expect the guests to either. Never underestimate the quality of the item you are physically selling.
Expansion plans, especially in new territories, are great. They need some flexibility and fluidity but should never be set in stone. Your first opening in a new country will provide you with a wealth of information about the future of the brand and the partner you have chosen.
It will be the foundation on which all future decisions in that market will be based. It will tell you how accepted your menu is, how comparable your service style is to your competitors and how your recipes fare against local market tastes. It will tell you if you have achieved the right balance between the exactitude of your brand values and standards against the need to comprehend and appreciate local tastes and customs. But most importantly, your first venture will tell you how strong you have built your foundations and ultimately how far you can develop and expand.
Crossing Borders: Plan, Systemise, Support
Plan: Failing to plan, is planning to fail. Plan your internationalization meticulously. Investing the appropriate resources into your own internal infrastructure is an essential prerequisite to successful international expansion.
Human value: One of the most important investments you can make is in the personnel that are tasked with driving the international business forward. Make sure you have the right person or team with the right skill set that share your brand values and philosophy, and who can manage and support the partners from the beginning. They are your brand ambassadors across the globe.
Systemize your material: Your operating procedures, from recipes to values are your DNA. They have to be thoroughly documented and without ambiguity. You want to be able to provide your partners with everything they need to succeed, for if they get it right, your customers will be happy and everyone wins.
Support: Your ability to successfully support your partners is inversely related to the physical distance they are from your headquarters. Time and travel have a major impact on your ability to provide the essential support and control over your global partners. The further your global reach, the more influential and efficient your own company must be.
Partner: Partner up with the right people. Make sure you enjoy their company, and share the same passions. If your values, your enthusiasm and your objectives are not aligned, then your partnership will be a complicated and unproductive affair.
Training: Ensure that you don’t compromise on the investment in your partner’s team as well. This starts from intensive training of the operator, in an environment that breathes your brand values along with flawless execution of your SOP’s. Typically, this is in your flagship restaurant, however this investment shouldn’t and cannot stop there. The training must continue throughout the entire lifespan of the partnership. If the foundations are not solid, there is no possibility to build a strong structure. Ensure that you are training the right people – these usually are the people who are going to be running the operation, the guys on the ground. Train them well and look after them the most, for they are your voice, your brand guardians and will fly your flag in terms of standards and values.
Research: Can your product be accurately re-produced in the international market? If you are compromising on a sub-standard product or having to dilute your concept beyond recognition then stand firm and really challenge this decision. If your partners are having to operate a cheap carbon copy of your brand then failure is just around the corner.
Trust: Trust must be earned. Stay close to your partners during the infancy of your relationship. Without close supervision, there is a risk that your inexperienced partner will deviate from your core essentials and end up with a corrupted version of your brand. Once you are comfortable and confident of your partner’s competencies, then you can extend a certain amount of freedom to them. Your brand in a new market is like a new born baby that needs nurture and protection from its parents.
Tailor: When doing your due diligence, consider cultural habits. Do -people take their time when they eat and compare them to your service -sequence and speed? Is your seating communal and would that go against ways -people are used to being seated in your potential market? Are the customers more visually stimulated whereby pictures of food, which may not be on your menu, need to be considered? Are there certain spices, which are not custom in their diets?