While opening a franchise is often a great way to reduce risks and generate profits based on an existing business model that offers cooperative management, for companies that have realized success on a smaller scale, franchising is also a great way to expand your existing business and generate greater revenues while minimizing the overhead spent on facilities, personnel, and training. In addition, franchising is also a great way to take your business to a global level, by opening up franchises in other countries.
Many of today's top US franchise companies, like McDonald's or Dunkin' Donuts, now have several foreign franchises as well. However, franchising is not always just for the largest companies. A number of smaller companies have also opened a number of franchises in other countries as well that have been successful and profitable. An example of this is some of the smaller US chocolate and candy companies which now operate in parts of the Middle East where chocolate is considered a delectable luxury, much like caviar in the US.
One of the biggest challenges of franchising in foreign countries, however, is being able to adapt your product and operations to the various customs and lifestyles of various cultures. Notable US franchisor KFC had eleven retail outlets in Hong Kong fail within two years, mostly because the Chinese found the food to be too greasy and considered eating with your hands to be undesirable. A number of US pizza chains have also discovered a bit of a challenge globally, as t has been discovered that people in different regions prefer different kinds of pizza toppings.
McDonald's remains the largest global franchisor worldwide, and can teach many franchisors, both small and large, a great deal about adapting to various countries in order to make your franchises a success. Both domestically and internationally, McDonald's has been met with a great deal of challenges, and has proven that the ability to evolve with changing demands and respond to problems rapidly and effectively are the keys to success in any business.
In the US, the company has been faced with lawsuits over hot coffee that did not have appropriate warnings and also claims that the company was making people obese. As a result, the company puts a great deal of effort into product labeling and is making strides in offering healthier menu choices. Overseas, the company has also been faced with the threat of E. Coli contamination and even a mad cow disease outbreak in its Asian stores, which serve as examples of the difficulties that any franchisor must be prepared to deal with a number of various situations readily and effectively.
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