U.S. Franchises Find Foreign Niche Again

Journal Gazette:

Ian Moses ran into a roadblock when he tried to franchise his mobile pet-grooming business in Japan: The Mercedes vans that he had retrofitted were too big for the groomers and the streets. The founder of Dana Point, Calif.-based Aussie Pet Mobile switched to a Nissan model that was smaller and cheaper.

In Portugal, Yoshino Nakajima had to rethink the 10-minute marketing pitch for Home Instead Senior Care of Omaha, Neb. Quick meetings just weren’t possible in that laid-back culture.

After pulling back from far-flung ventures in the aftermath of the Sept. 11 attacks, entrepreneurs are returning to global franchising.

But transplanting a popular American concept to foreign soil can be tricky, as Richard Rennick learned when he tried to franchise his American Leak Detection brand in South Korea in the late 1990s. The businessman, from Palm Springs, Calif., said it was hard to sell his services in that country because of the language barriers and the technical requirements.

‘We didn’t give up,’ said Rennick, who franchised his product in a dozen other countries, including Brazil and Chile. ‘We just learned from our mistakes.’

Last year Rennick sold his company and began working as a franchising consultant.

Rising incomes and exposure to American culture have created a global appetite for U.S. franchise concepts that has expanded beyond fast food, hotels and car-rental agencies to unusual products such as those created by Edible Arrangements, which specializes in baskets of hand-carved fruit. The Connecticut company, which was launched in 1999, recently opened an office in Britain and operates franchises in Canada and Puerto Rico.

‘You are now seeing a microcosm of what you see in the U.S. transported overseas,’ said Scott Pressly, a partner with Roark Capital Group in Atlanta, which owns the Cinnabon and Carvel brands. ‘That’s a fairly recent phenomenon.’

California has been fertile territory for companies wanting to franchise and for entrepreneurs wanting to buy into those operations. The Golden State leads the nation in number of franchise headquarters (130) and is home to 80,340 franchise businesses creating $187.4 billion in economic output, according to the International Franchise Association in Washington.

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