Singapore – 21 October 2010 Rod Young – DC Strategy

1. How To Adapt Your Concept For International MarketsIFA / FLAInternational Symposium on Franchising Singapore – 21 October 2010 Rod Young – DC Strategy

2. Global Development Opportunities • Many brands are planning international expansion. • Eurozone & US Brands are in low growth economies. • Asia / India / China economic growth accelerating. • Local franchisors dominate emerging and established markets.

3. International Franchising Success ??? • Many franchisors are not making substantial returns from international franchising. • Over 80 % of foreign master franchise arrangements fail to meet their development schedules. • Too reliant on current domestic business model. • Not enough local knowledge.

4. The 80 /20 / 20 Rule • The core 80% of your business model. • The 20% that can be discarded. • The 20% that requires local adaptation.

5. Adaption • Entry strategy required to be tailored to specific market • Direct entry and / or acquisition • Single unit • Area developer • Master franchise • Brand • People and culture • Location • Footprint • Marketing • Design and layout • Products / menu / service offer

6. Executing Change • Business model needs to be developed for each market prior to entry • Focus Groups to trial products, flavours, service. • Change model prior to entry - not on the run. • Initial training in home operation and / or in-country team and local market training. • Strong rationale before change.

7. Cost of Adaption • Identify need and cost early as part of market research. • Balance cost with franchise offer. • who pays & what is delivered • Incorporate in business model. • Leverage to other markets. • Be fair and reasonable