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TheStreet Open House

International Franchising Opportunities Reach Far

Secondly, are you sure that you are committed? You can't do international expansion of a franchised concept halfway. You have to be committed to it. Having spent nearly 30 years in international franchising I still see people take brands overseas, but they're not really ready to make that type of commitment.

If you look at it as a wide-open space where you make a lot of money -- and you can -- but you're going to make an investment upfront. You're going to have to build some infrastructure to support it. Selling the franchise is step one. You have to be able to support it, just like you would here, only you're starting many times from scratch.

How do you build brand loyalty?

Shattuck: It's not really that much different than it is here. It's all about providing good, quality foods in a friendly environment. The basics are definitely transferrable. Your target market, your position, you may tweak that, but you're still in the business of providing value for your money.

What are some common mistakes made by franchises that go international?

Shattuck: Understanding who that franchise partner should be. Oftentimes that's a mistake that's made and then you're in a difficult situation from the beginning.

Many times restaurant brands are more difficult than snack brands. With a restaurant brand, it can easily take two to three years to get to the point where you start realizing a return on the investment.

How much should a franchise change to respond to cultural differences?

Shattuck: To me there is a core essence and being of every brand. And at some point franchisors need to question, 'Is that being compromised by doing this product or by doing this type of prototype or design?' For example, Cinnabon. One of the things is the product is always baked fresh. If you were to move from that -- that is part of the essence of that brand.

How do you find the right operator abroad?

Shattuck: There are a lot of avenues. One that often gets overlooked is the U.S. Commercial Services. We worked with them a lot to introduce us to possible candidates. Initially, that's a great place to start as you build your brands. As you create a network, a lot of it will come from referrals and current partners.

Can you think of a brand whose international expansion didn't work?

Shattuck: If you look back historically at Carvel, at one point it was in several markets overseas -- South Africa, China -- but they never really had the infrastructure to support it. They never committed to it.

-- Written by Laurie Kulikowski in New York.

To follow Laurie Kulikowski on Twitter, go to: http://twitter.com/#!/LKulikowski

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