Globalization: Overseas Markets Becoming More Appealing for U.S. Franchises
More than ever, American franchises are contemplating foreign expansion as possibilities in the United States remain stagnant. The two most populous nations in the world, China and India, are key areas for growth and feature rapidly-flourishing intermediate consumer bases.
McDonald’s has long been exemplary in terms of its global franchise model. In 2009, McDonald’s opened just 53 new restaurants in the U.S., whereas internationally, it opened 286 new locations. This isn’t simply an aberration, but has been the trend for the last couple of years. Meanwhile, McDonald’s global sales have jumped 7.2%!
The reluctance of U.S. lenders to issue loans has hurt American franchising, but abroad, third-party investors are frequently willing to back projects financially. This becomes a mutually advantageous relationship as foreign investors reap the benefits of well-established, clearly defined American brands. People instantly recognize those double arches! In light of such symbiosis, international markets are ripe for development and can support sustainable growth.
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