5 keys for bringing an international franchise to Australia
For international franchise brands, Australian expansion has often posed an interesting conundrum. Here, the domestic landscape is fraught with opportunity, a business-friendly economy and a consumer that has come to love the consistency that franchising presents.
However, Australia is also a nation of complex award-structures, supplier regulations and fluid consumer preferences.
Even international franchise giant Taco Bell failed to hit the mark with its early incarnation, proving that even in country with so many cultural similarities, the US and Australia are vastly different marketplaces.
So how do you know if an international franchise concept has the bones to make it Down Under?
Well, for Ratika Khandelwal, director of global math tutoring franchise Mathnasium, the rules of engagement are clear.
“Research and understanding your potential market are two key measures for ensuring the validity of a business concept in Australia,” she said.
Mathnasium’s international franchise journey
In the 12 months since Mathnasium launched in Australia, the 1000-franchise strong global concept has steadily grown in popularity. Earlier this month, the brand announced plans to expand its network of learning centres from one to 15 across NSW and the ACT by 2021.
Khandelwal explained that while Mathnasium was only just beginning its Australian journey, the expansion followed years of refined planning.
“We found one of the biggest challenges with introducing Mathnasium to Australia was the general scepticism surrounding the business concept and how it relates to an Australian market,” she said.
“It was necessary, when we first launched a year ago, to help people connect with the purpose of the business first rather than just speaking about it being a global success that had finally reached our shores.”
The result has seen attendance and enrolment numbers soar, and while Mathnasium is indeed a niche offering, Khandelwal believes the keys to bringing an international franchise brand to Australia are universal. Here, she shares her five steps for success with an international franchise brand.
We spent a lot of time examining the success of the brand in other countries first. We spoke to current franchises in different countries to see what we could learn from their experience.
For us, this involved considering some key questions.
- Is there a need for the product/service?
- Does it answer/improve a current problem/issue?
- Is the market large enough?
- Is it a fad or something that is needed on a regular basis here?
- Does the product/service need to be adapted much to suit the Australian market?
With Mathnasium, we could easily address every consideration so the potential for the business concept here was indisputable for us.
2. Product evaluation
Secondly, ensuring the service was necessary and relevant to an Australian market was very important and we consulted experts regarding changes that would need to be made to localise the material and meet Australian curriculum guidelines.
Ensure there is a current and future demand for the product/service you are looking at and make sure the product/service has lasting differentiation in the marketplace.
Once we were sure of the business concept, we had to negotiate the rights for the master franchise in Australia. We utilised experts such as accountants and lawyers to ensure we made a sensible decision, which led to securing NSW and ACT first.
For other international franchise brands, this situation will depend on the existing business operations.
Ask yourself, is the brand a new international business or has it expanded successfully elsewhere? If so, look at those countries and research the brand’s history and long-term success.
4. Branding and marketing
What works in one country may not be culturally relevant in Australia so we had to apply an ‘Aussie’ filter to all brand and marketing material to see if it would resonate and make changes where we knew it wouldn’t. For example, we had to change the tone and spelling in our marketing material.
5. Solid support
Franchising is all about being in business for yourself not by yourself, so making sure the business has the right systems, training, technology and team available to back an international launch is paramount.
Mathnasium was already in many countries, so we knew it had the right infrastructure to support us as leaders in the business in Australia, as well as our local franchisees in the future.
If you are considering bringing at international franchise to Australia, you must ask yourself these important questions.
- Does the brand have a comprehensive support system available?
- Is the technology, training and people adequate? For example, Mathnasium has its own university and online training platform, and everyone trains with the founder in America for a couple of weeks as part of the system.
Regardless of the industry in which you operate, bringing an international franchise Down Under is a difficult task. It will require a vast amount of research and consumer education.
Should you choose to partner with an international franchise brand, it pays to take a calculated approach like Mathnasium. Slowly build your suppliers and credibility among the domestic market before launching nationwide.