Conditions for franchise businesses overseas

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Conditions for franchise businesses overseas


Caffe Bene, the coffeehouse chain that I operate, has opened more than 500 shops in 12 countries in three years. When I travel abroad to research overseas markets, I focus on how the locals feel about Korean brands and products. It has become favorable compared to in the past. However, I can still feel that people are skeptical of Korean brands, asking what values we provide and how we are different from competitors. What are the strategies for successful overseas expansion?

Franchises are a cultural product by nature. Therefore, the brand and the store should integrate cultural content. McDonalds and Starbucks became global brands as the American lifestyle spread around the world. Therefore, the latest Korean Wave could provide a great opportunity.

While Korean culture has many merits, it still lacks a competitive edge compared to developed nations such as the United States. Korean brands cannot easily win the hearts of local consumers, so localization is essential. Without compromising the brand identity, local culture should be accommodated, and the system and services should be localized.

“Born global” is used to describe a franchise that pursues globalization from the start. Such a business will be competitive if entrepreneurs with expertise in certain products target overseas markets and use their knowledge to spearhead the business. Lately, entertainment agencies have been targeting other countries with their K-pop stars from the beginning.

Because Korea lacks natural resources, development has been driven by exports and manufacturing. But in the age of globalized culture, franchises, which are part of the service industry, should serve a role. One thing to keep in mind is that failing in overseas means losing national wealth, unlike in the domestic market. Overseas infrastructure of large corporations, cooperation among small and medium businesses, policies and assistance from the government, and research and education at universities should all come together. The time has come for us to use our wisdom to open the age of the global K-franchise.


by Kim Sun-kwon, CEO of Caffe Bene


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