Your brand will need to make adjustments out of respect and necessity, but the core of the company should remain the same.

By Bob Kirschner and Rashid Kahn 

There are many translations of the words “grow” and “expand” throughout the world, but there is one main word franchise brands must keep in mind to do it correctly: “cultivate.” Cultivating relationships, both with franchise partners and the local community, is key when taking business development global. 

Kids ‘R’ Kids Learning Academies discovered this firsthand when opening Asian headquarters and two schools in Beijing and Shanghai. These achievements represent over five years of cultivating relationships with local groups. Growth in any country is a long-term proposition that takes tremendous time and capital. There is no immediate gratification.

Once a company has successfully navigated the foreign politics with diplomacy, there are still challenges to overcome in language and culture. Ask international franchise executives, and they will have some entertaining stories to tell. Kids ‘R’ Kids in China found that their Chinese counterparts took the company’s “hug first, then teach” philosophy literally, beginning each lesson with a hug for every child. 

Minor misunderstandings aside, there are some key areas of focus for any brand wading into international waters.

Training Staff

The Kids ‘R’ Kids Learning Academies curriculum underwent translation and modification to meet language needs in China without losing sight of the quality of care and education that makes it a premier early childhood education school. Chinese parents enrolling their children in these schools want their children to learn English, so both an American and a Chinese teacher are in each classroom. Labor cost at the professional level is much higher in China. American teachers are being recruited to move to China to help manage and teach. 

Dan Stone, chief business and people development officer for Front Burner Inc., restaurant management company of The Melting Pot, came up against unexpected staff training differences in the company’s Asian restaurants. “We were talking to the staff about The Melting Pot’s spinach and artichoke cheese and found that they had no idea what an artichoke was. We quickly realized we would have to take a training detour that day to show them how it tastes, how to cut it, even how to pronounce it.”

World of Beer’s vice president of International Development Donnie Everts points out that introducing prospective World of Beer franchise groups to the term “craft beer” is interesting. “The word is not always understood without a regional explanation behind it,” he says. “Once we figured out how to describe it as microbrew, designer beer, boutique beer, scarce, artisanal beer or some other more local description, it made more sense to people. And they always seem to be very surprised how prevalent it is in their own market. Now it is becoming much more popular everywhere.”  

Sourcing Products

Brands growing internationally will be faced with decisions about what products to source locally and what to export. For restaurants, Stone points out that in many cases it comes down to identifying close-enough substitutes that don’t sacrifice quality or flavor profile. “When The Melting Pot signs a franchise agreement in a new country, we send our executive chef to look for two or three options for every ingredient and source anything he can locally. We modify our recipes whenever possible to respect the local taste preferences, such as featuring hummus and tabbouleh in our cheese fondue in Saudi Arabia and Dubai.”

Stone adds, “In the U.S., 80 to 90 percent of products in a typical location come from one vendor, which is next to impossible to achieve internationally. Distribution infrastructure is not transferable like it is in America. When you are opening in another country, you are like a new concept with no distribution network.” He adds that cheese is often difficult for The Melting Pot to source locally, and exporting it is usually more cost-effective. “We can ship cheese wheels to the countries and they shred and prepare it themselves, which also helps it last longer.”

For Kids ‘R’ Kids Learning Academies, product sourcing considerations have included toys and the classroom environment. Beijing suffers from air pollution, and parents there will bring in their gadgets to measure air pollution. Our schools have invested in ionizers to clean the air, and the paint used on the walls comes from America. The environment is safer than that of a local school, and the parents
appreciate that. 

Other Considerations

World of Beer recognizes that there needs to be some modifications to the food menu in certain markets due to regional eating practices or religious beliefs, such as no beef in India or no pork in most Middle Eastern countries. 

“A number of franchisees want the authentic flavors and presentations of our dishes because they represent the Western culture of the brand,” says Everts. “At the same time, some cultures view certain offerings such as rice, bread or beans as staples of any meal, and they expect those to be served along side your unique menu items. So localizing the menu is important.”   

Stone shares a similar experience with The Melting Pot. “In Saudi Arabia, particularly, we have made dining room adjustments to fit the culture, such as providing two separate entrances with a family section and a singles section, as well as an open window into the kitchen, as required by the government. Despite the adjustments we make to respect the culture, the core of The Melting Pot experience remains the same. For many cultures, dining out is about celebrating life with friends and family around the table.”

Orangetheory Fitness is currently in active development in Kuwait and will follow soon in Saudi Arabia. Vice President of Operations Grace Pineda says, “These countries will require our greatest flexibility while still holding true to our brand. One of the unique elements of the region is the requirement of studios to be unisex. We will have an all-female staff for the women’s-only studios, while the construction of the space will need to be modified significantly for privacy.”

Kids ‘R’ Kids Learning Academies is the first to introduce infant care to China. Its educational system typically begins with three-year-olds, but now working parents have a place to bring their infants for quality care. Of course, the very first day in Beijing, the school had five grandmothers come in with the babies and stay. That’s not something you would see in
the U.S.

Keys to Success

In talking with other franchisors about international development, several key pieces of advice were universal, including:

1. Get a real handle on the true cost of investment that is needed to tap into the tremendous opportunity of the overseas markets. A realistic budget is paramount to increasing your chance of international success. 

2. Pick the right franchise partner — one who can follow the system you have in place. The partner should have experience in the local industry and deep knowledge of the local consumer.

3. Approval process in foreign governments can be complicated. Allow for the investment of time (and capital) that will be necessary to navigate registering a brand or trademark and establishing your operating system, hiring and training staff and other critical items. 

4. Enlist good legal representation in-country, which will be expensive but necessary. 

5. Create an infrastructure for scalability. 

The core remains

Despite all of the cultural differences they have encountered along the way, franchisors have still been able to find common ground. There are a number of cultures that value gathering around a table with friends and family. There are others that also have the same desire to be fit and healthy, and want the best possible education for their children. Although your brand will need to make adjustments out of both respect and necessity, the core of the company — no matter how you translate it — should remain the same.

Bob Kirschner is chief operating officer of Kids ‘R’ Kids International and Rashid Kahn is vice president of Franchise Development. Find them at fransocial.franchise.org.

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