Franchise Update Magazine Issue IV, 2014 | Page 64

Grow Market Lead

International

BY BILL EDWARDS

Opportunity Beckons

T

International expansion requires change

he first U.S. food and beverage franchises expanded into
other countries more than
50 years ago. Brands early
to international include Kentucky Fried
Chicken, McDonald’s, and Pizza Hut.
The first outposts for these mega-brands
were Canada and Mexico. In those days,
it was known that a brand had to have
hundreds or thousands of U.S. units to
“go global.”
Today it is estimated that more than
250 U.S. F&B franchises have entered
other countries. U.S. burger, chicken,
coffee, pizza, ice cream, Mexican, and
sandwich brands are in more than 100
countries. U.S. F&B brands with as few
as 10 domestic units are also in other
countries.
Despite the more than 50 years of
U.S. F&B brands going global, considerable potential remains for brands of all
sizes outside the U.S. Indeed, the largest
interest in new brands comes from the
Middle East, where a large number of
U.S. brands are already well established.
Mega brands abroad

McDonald’s (35,000 units open in 119
countries) entered Canada in the 1960s,
Australia and Hong Kong in the 1970s,
and China and Russia in the 1990s. McCafés were first opened in Australia in
the 1990s. According to the Big Mac
Index published by the The Economist,
the most expensive Big Macs today are
in Norway (US$7.80) and the least expensive (where it is made with beef) is
South Africa (US$2.16).
KFC (19,000 units open in 118 countries) opened in Mexico and the U.K. in
the 1960s, and now has more outlets in
China (4,600) than in the U.S. (4,500).

62

Franchiseupdate ISS U E IV, 2 0 1 4

Pizza Hut (13,000 units open in 87
countries with 5,500 outside the U.S.)
is part of Yum Brands, which also owns
KFC and Taco Bell. Subway has 42,900
units open in 107 countries with 16,000
outside the U.S.
Adaptations

Carl’s Jr. added pasta in the Philippines.
In Japan the diet is low dairy and low
salt, requiring recipe changes from those
normally used by U.S. F&B brands. In-

U.S. burger,
chicken, coffee,
pizza, ice cream,
Mexican, and
sandwich brands
are in more than
100 countries.
dia requires the elimination of beef. In
West Africa groundnut stew is on the fast
food menu. In India, Israel, and Muslim
countries there is no pork on the menu.
Potbelly Subs uses turkey “ham” in the
Middle East. The Middle East also requires halal meat. Wikipedia correctly
states, “The criteria for non-pork items
inc YHZ\