The Expansion of American Fast Food Franchises
If American travelers to international markets ever tire of the local cuisine, they can always seek out a taste of home with a fast food fix. When my partner Michael Seid and I arrived in Lyon, France for client meetings a couple of years ago, it was late at night, we were starving and tired, and the local restaurants were closed. We were about to give up when we turned the corner and saw the Golden Arches.
Two Big Macs with fries later, we were ready to take on the new assignment.
Since the early 1970s, American fast food franchises have ventured into international markets largely as the result of business people in other countries wanting to bring the American concept to their homeland. In most international markets franchising provides the same benefits to companies as it does in the U.S. – the ability to license to the franchisee the right to use the company’s trademark and operating system while maintaining control over operating standards. In addition, franchisees can help guide the franchisor to create products for the local market. Combine the franchisor's standards with the franchisee’s knowledge of their market, and consumers can expect the same levels of quality and service, even if the items on the menu are a little different.
Today, some of the most well-known brands in the fast food industry have a greater number of units outside the U.S. than they do within United States borders.
For example, there are 14,344 McDonald's within the U.S. and 21,914 restaurants internationally. Of the 19,420 KFCs in operation, 15,029 are located outside the U.S. At Burger King, the number of global restaurants just edges out U.S. restaurants with 7,246 outside and 7,126 in the U.S. The number of Pizza Hut restaurants is still greater in the U.S. with 7,908, but international is catching up quickly -- the current count is 7,697 locations.
The record for the most total locations, with 43,154 restaurants, goes to Subway. U.S. locations still outnumber international 26,958 to 16,196, but internationally Subway continues to grow.
How do these fast food companies, known for Big Macs and Whoppers and Buckets of Fried Chicken, grow their concepts in international markets? The secret ingredient in their success is that they embrace and engage consumers in each culture they enter. While they offer local consumers (and travelers)a taste of Americana, the companies that have had the most success in international markets have also adapted their menus and ingredients to meet the taste preferences of the local consumers, who then become their loyal customer base.
Localized Menu Items
There are 3,100 Dunkin Donuts in 30 countries around the globe offering products tailored to local demand. You can have a Blueberry Cobbler Croissant Donut in Atlanta, or try the dry pork and seaweed donut in China, or a mango chocolate donut in Lebanon. If you’re in Korea, a Dunkin favorite there is the Grapefruit Coolata.
Hungry for a pizza? There are 3,469 internationally located Domino’s Pizzas ready to answer your call. Consumers in India can order a curry pizza, and those in Australia have no problem getting prawns and pineapple on their pizza pie; while in Japan, tuna is a popular topping and your pizza is delivered by motor scooter.
In fact, seafood and fish are popular toppings throughout Asia. Of course, the traditional American cheese, pepperoni, and mushrooms are generally also on the menu for those who want the full American experience. The same type of menu adaptations are available at rival Pizza Hut, where a BBQ pizza is available in Hong Kong and in Iceland, a “pizzur” can be had with green pepper, mushrooms, and tomato slices rather than tomato-based pizza sauce. And in Pizza Hut pizza in Japan, your order might include teriyaki chicken, corn, seaweed, and mayo.
The marketing strategy behind McDonald’s global expansion is simply stated: they provide uniformity throughout every market in the world in which they do business. The iconic Big Mac is available everywhere, but in the Philippines, McSpaghetti is also on the menu, and the Teri Tama Burger and Tsukimi Burger are seasonal, limited-time offerings in Japan.
Another change for Asian markets is the ability to get dipping sauces with a different flavor profile that better reflects Asian taste preferences for the staple Chicken McNuggets or a chicken Big Mac.
Throughout the countries of the Middle East, the traditional McDonald's hamburger bun is replaced with a flatbread. In Israel, McDonald’s has opened Kosher restaurants, while in Indonesia and Pakistan, the restaurants are certified halal.
You can get a beer or wine to go with your meal at McDonald’s in Germany, Belgium, Austria, and France. Also in France, you can choose from six flavors of Macaronsas, a delightful finish to your meal, or in Switzerland treat yourself to a McFlurry made with Toblerone. Italians can order their burgers cooked in olive oil and garnished with parmesan cheese and pancetta. To demonstrate its commitment to local consumers, McDonald’s has opened a test kitchen in Europe that will allow them to further refine their menu to meet local tastes.
Meeting Cultural Norms
Menu items aren’t the only adaptations made by McDonald’s. Another change necessary to meet local market demand is portion size. In many global markets, McDonald’s drink sizes are smaller, as are the portion of fries and sometimes even the burgers. Many other fast food companies follow this practice of reducing portion size as well.
In 1952 George W. Church started Church’s Chicken in San Antonio, Texas with his signature hand-battered fried chicken and honey butter biscuits. Today there are 1,650 locations in 25 countries worldwide where consumers can enjoy the same great-tasting fried chicken or the popular Mexicana Wrap. A major difference – outside the Americas, Church’s Chicken is known as Texas Chicken. Changing the name was an important step to meet the cultural and religious norms in international markets. The design, typeface, and colors of the logo remain the same, but the word “Texas” replaces the word “Church’s”.
Becoming a Valued Part of the Local Community
In addition to tailoring their menu to cater to local consumer tastes, and adjusting their portion size and even their name to meet local cultural norms, U.S. companies often support local communities and charitable organizations to build their brand and establish goodwill in a market. Coca-Cola has engaged in various local projects to demonstrate a commitment to international markets. In Egypt, Coca-Cola has constructed 650 clean water installations to provide potable water to local areas. The company also operates a program called Ramadan Meals for Children that provides meals for children during the season of Ramadan; the program has been so successful that it is now offered throughout the Middle East. Coca-Cola is also the sponsor of Support My School in India, a program that helps to renovate and improve school facilities across the country.
The term “glocalization” has been coined to described the means by which all companies, not just fast food, adapt their products, services and business practices, policies and procedures to meet the needs of local markets all across the globe. In the age of the world-wide web, brand awareness can be easily achieved, and people in other countries are often just waiting for a concept to open in their hometown. However, turning those who try the product into loyal customers can often be better accomplished when restaurants take the time to adapt to local tastes and cultural norms.