U.S. restaurants are seeing increased success abroad, but not without overcoming hurdles, executives of leading brands acknowledge.
“Today, it’s not just about serving your local community, although that’s where it starts — it’s a global business,” said Sarah Lockyer, editor-in-chief of Nation’s Restaurant News, who led a panel during the People Report-Black Box Intelligence-sponsored Global Best Practices conference last week in Richardson, Texas.
Panelists represented brands with extensive, long-term international presences, including: James Fripp, Yum! Brands’ senior director of global diversity and inclusion at Yum! Brands; Claudia Schaefer, vice president of global food and beverage innovation for Brinker International’s Chili’s Grill & Bar; and Nick Shepherd, president and chief executive of Carlson Restaurants, which has more than 900 T.G.I. Friday’s restaurants in 60 nations.
“If we want to remain relevant, we have to understand our global business. We have to connect with that business and understand how to impact and influence that business,” said Fripp of Yum, whose KFC, Pizza Hut and Taco Bell brands abroad account for 59 percent of global systemwide sales. The company’s international business accounts for 88 percent of this year’s operating profits.
Yum, which is opening two stores every 24 hours in China, uses several tools to determine which employees are good candidates for positions internationally and to build their skills. The Intercultural Development Inventory, an assessment that can be taken online or on paper, is one such tool.
“It assesses the individual’s ability to engage folks who are different from them,” Fripp explained. “It gives us some insight into the skills they need. The last thing we want to do is send someone to Dubai and in three months have they say, ‘I need to come home.’”
Another tool, he said, allows employees to asses themselves and determine which nations abroad would be a good match. “Our success comes more from listening and engaging those cultures than it does from telling,” Fripp said. “We listen to our franchisees.”
Employing such tools earlier rather than later are important in managing human resources, Fripp added.
Schaefer, a native of Mexico City, said understanding franchisees and their markets is important. Chili’s has 285 international locations and expects to open seven more this year.
“At the end of the day is your realization that every market is different,” Schaefer said. “And when you meet with franchisees all over the world, that’s what they say. ‘Yes, Yes. We know the brand, but our market is different.’
The consumers interpret and use the brand differently, she said. “We have different marketing calendars for each market, because we have different target audiences and different dayparts we are going after and different occasions that we are going after.”
She cited Saudi Arabia and other international markets where Chili’s caters to an upscale consumer, rather than the middle-class patron of the United States.
The international locations are also produce and test ideas that show up in the United States, Schaefer said, including Chili’s “Kitchen of the Future” which was “toyed with” internationally for several years before expanded systemwide in U.S. restaurants.
Before going international
Shepherd of Carlson and Friday’s said that one of the challenges of running a business that is so diverse is deciding what decisions to allow to be made locally and what decisions must be made at the corporate headquarters, he said.
According to Shepherd, executives should ask themselves the following questions about their brand before launching it abroad:
• Is there a fit for the brand in that market?
• Can the brand make money from going abroad? “Do you have the economics that will work in the market,” he asked, and can it be scaled?
• Can I execute it? Shepherd said operators should consider the availability of employees with skills necessary, real estate that is affordable and franchise partners that can “deal with the complexity of the restaurant operations as well.”
• Can I protect the brand? “When someone is doing something in your restaurant 10,000 miles from home, in a world where they are connected to everybody,” Shepherd asked, “can you protect the reputation of your brand so that on a global basis it won’t suffer?”