For American Franchisors to Succeed Overseas, They Have to Be Open to Change
There are massages…and there are massages,” says Lee Knowlton, the senior vice president in charge of global sales and international at Massage Envy, the Arizona-based provider of therapeutic kneading and skincare services. And as he tried explaining his company to would-be franchisees in Bangkok recently, he just couldn’t escape this wink-wink distinction. “I guess the image of Thai massage parlors is still a hurdle we have to overcome,” Knowlton says with a sigh.
Related: How Local Franchises Are Becoming International Brands
In heading overseas, however, Knowlton is following one of the hottest playbooks in franchising. “Thirty-eight percent of the unit growth of the 200 largest U.S. franchisors is now overseas,” says Josh Merin, a director at the International Franchise Association. “And over the past three years, 80 percent of the collective unit growth of these companies has been outside U.S. borders.” That growth is expected to continue, Merin says, as a number of large players consider going global for the first time. Among them in the restaurant sector alone: Sonic Drive-In, the Oklahoma City-based drive-through chain, and Chick-fil-A, the Atlanta-based chicken sandwich purveyor.
What’s more, the current economic landscape offers two distinct opportunities for franchising. “Developed markets have better infrastructure to support all the. Plus the dollar goes further now than in the recent past. Meanwhile, “emerging markets have sketchier business frameworks, but often they will have fewer direct rivals and lots of new shopping malls and offices to fill.”
