The Pros & Cons Before Entering Other International Markets by Franchise Australasia Limited

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Getting into the Australian and/or New Zealand Franchise Market

Taking Your U.S. Franchise to Australia or New Zealand – What You Need to Know

If you’ve reached the point where you have built up a successful franchise model in the U.S., you’re probably wondering – ‘What’s next?’ Now is the time that proactive franchise business owners start looking overseas for new opportunities and markets to expand into. Two popular countries of choice for U.S. founded master franchises are Australia and New Zealand – gems nestled in the Pacific Ocean, with growing economies and thoroughly westernised cultures that are very comparable to the American way of life.

Who’s done it before?

There is a long list of U.S. franchises who have successfully made the leap across the ocean to build a strong, profitable presence in the Australian and New Zealand markets. Brands such as McDonald’s, Burger King, Hungry Jacks, Costco, Streetriders, Subway, Denny’s, KFC, Domino's Pizza, Athlete’s Foot, Ben & Jerry’s, BP, Mobil and Anytime Fitness are now household names for many Aussies and Kiwis. This has proven that franchise owners across a wide range of industries can benefit by from franchise opportunities in Australia and New Zealand licensees to further strengthen their brand and add additional revenue streams.

How easy is it to expand my franchise in Australia/New Zealand?

Of course, with any expansion you need to be aware of the possible pitfalls. Some franchise expansions have not been able to gain the necessary momentum or generate good profits based on common mistakes such as:

  • Not doing enough market research prior to expansion – although in many ways Australians and Kiwis imitate their ‘big brother’ America, they do have some distinctly different tastes, expectations, and desires around the types of products they will buy. You need solid inside knowledge to understand how to shape your product offering around what these markets want and need.
  • Not factoring in currency conversion – when you enter a new market, it is key to work out your forecasts and costs in their local currency, and convert your bottom line back into your own local currency rather than basing your expectations on what you’re currently making. Price points may also need to adjust for a new market.
  • Not partnering with the right people – this is relevant both in the set-up process and in the implementation of your new franchises. If you don’t have the right people in place, you’re not positioned for success.

What support is available for U.S. franchises going into these markets?

At a high level, The Franchise Council of Australia Limited (FCA) administers the $131 billion franchise sector in Australia, representing the franchisees, franchisors, and service providers. New Zealand’s smaller, but still thriving franchise sector (with a turnover of about $35 billion per year) is carefully governed by The Franchise Association of New Zealand.

What’s more important though, is having a dedicated person on the ground – doing the research, putting feelers out for potential franchisee interest levels, negotiating deals, helping with the initial set-up phase, and advising you along the way. It all comes down to good systems, good marketing, and most importantly – good people.

I make it my business to help U.S. franchises experience a smooth transition into the Australia and New Zealand markets. With many years of hands-on experience under my belt, I know the industry inside out and get real satisfaction from helping others ‘make it’ in this challenging but lucrative sector.

If you’d like some honest advice on setting up a franchise in Australia or franchise in New Zealand, just get in touch with me today.

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Greg Longstaff
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