The Fastest 2 Minutes in International Business
Our GlobalTeam™ of highly experienced international project managers – on the ground in 32 countries – contributed to the following brief summary of the franchise world opportunities for 4th quarter 2015.
| Asia | China Japan Malaysia Mongolia The Philippines Thailand Viet Nam |
Watch the consumer economy not the overall GDP growth. Large corporations are investing in new consumer projects. Ringgit drop of 25% against the US$ plus political unrest. US pizza and coffee franchises flourishing. Seriously. Middle class buying power accelerating. Stable politics. Military dictatorships often are stable. US sailors on shore leave, 6%+ GDP growth. |
| Americas | Argentina Brazil Canada Chile Colombia Mexico Peru USA |
You still get paid in soybeans, if at all. Economy is stalled, inflation climbing, corruption rife. Tim Horton’s and Burger King are now one??? New President negative on business. Investment stopped. Show me the money and where it came from. Mexico City, Monterrey and Cancun booming. Lima is a city of cranes and new foreign F&B brands. US$15/hour minimum wage means no margins, less jobs. |
| Europe | Ireland Germany Poland Russia Spain Turkey United Kingdom |
GDP growth of 3.5% projected for 2016. Difficult to find investors/risk takers for new foreign brands. 3.5% GDP growth for 2015 is the highest in the EU. Foreign brands with US$ denominated rents are closed GDP growth for 2016 estimated to be 2.6%. Political unrest leading to drop in new project investment. 2.4% GDP growth, but normal investment analysis paralysis. |
| Middle East | Egypt Saudi Arabia Dubai |
Pent up consumer demand, high growth but scary security. Challenges to get new businesses open due to regulations. New building push, large expat influx, airport & airline soaring. |
| Elsewhere | Australia India South Africa |
GDP growth of 2.6% but falling commodity exports. Jobs iffy? Not another country, another universe. Low growth, high unemployment (25%), low new investment |
The Fastest 2 Minutes in International Business
For 2015, EGS’ U.S. clients are seeking licensees in over 20 countries. Our GlobalTeam™ of highly experienced international project managers on the ground in 35 countries contributed to the following brief summary of the world mid-2015:
| Asia | China Japan Malaysia Mongolia The Philippines Thailand Viet Nam |
Citizens: you didn’t really lose money in the Shanghai market. Large corporations are investing in new consumer projects. Prime Minister didn’t really put US$1B in his bank account. U.S. pizza and coffee franchises flourishing. Seriously. Subic Bay is operating again, U.S. Embassy doubling in size. Stable politics. Military dictatorships often are stable. U.S. sailors on shore leave, 6%+ GDP growth. |
| Americas | Argentina Brazil Canada Chile Colombia Mexico Peru USA |
You still get paid in soybeans, if at all. Economy is stalled, inflation climbing, corruption rife. Tim Horton’s and Burger King are now one??? New President negative on business. Investment stopped. Still ‘show me the money and where it came from.’ Mexico City, Monterrey and Cancun booming. Lima is a city of cranes and new foreign F&B brands. US$15/hour minimum wage means no margins, less jobs. |
| Europe | Ireland Germany Poland Russia Spain Turkey United Kingdom |
GDP growth of 3% in 2015, high for the EU. Difficult to find investors/risk takers for new foreign brands. 3.4% GDP growth for 2015 is the highest in the EU. Foreign brands with US$ denominated rents are closed GDP growth for 2015 of 2.9%. Major 2016 comeback. Finally realized they should shoot at ISIS. 2.4% GDP growth, but normal investment analysis paralysis. |
| Middle East | Egypt Saudi Arabia UAE |
Pent-up consumer demand, scary security and future. Challenges to get new businesses open due to regulations. New building push, large expat influx, airport & airline soaring. |
| Elsewhere | Australia India South Africa |
Economy soaring but tied to commodity exports. Jobs iffy? Not another country, another universe. Low growth, high unemployment (26%), low new investment |
Updated: July 27, 2015
The Fastest 2 Minutes in International Franchising
For 2015 EGS’ US franchisor clients are seeking licensees in over 20 countries. Our GlobalTeam™ of highly experienced international development project managers contributed to the following brief summary of the franchising environment around the world for the New Year:
| Asia | China Japan Malaysia Mongolia The Philippines Thailand Viet Nam |
F&B franchises iffy, as is the investment climate Carl’s Jr. signed a 150 restaurant license New mall developers are seeking US franchises Pizza and coffee franchises – now 2 each! A focus on more US F&B brands Overall stable politics, but economy is iffy F&B franchises desired |
| Americas | Argentina Brazil Canada Chile Colombia Mexico Peru USA |
You still get paid in soybeans Economy is stalled, new investment stopped for now Tim Horton’s and Burger King are now one (???) New President seems negative on business Still ‘show me the money and where it came from’ Mexico City, Monterrey and Cancun booming A focus on more US F&B brands Franchise model with individual owners remains in peril |
| Europe | Czech Republic Ireland Germany Poland Russia Spain Turkey United Kingdom |
Prague has a high GDP/capita, other large cities lower GDP growth of 3% in 2015 is high for the EU Difficult to find investors for new foreign brands 3.3% GDP growth for 2015 is the highest in the EU Foreign F&B brands have US$ denominated rents GDP growth for 2015 of 1.7% is high for large EU countries US F&B investment and high-end malls growing Build a pilot first, then investors come |
| Middle East Egypt | Saudi Arabia UAE |
Interest in new franchise unit investment for 2015 Challenges to get new businesses open due to regulations New trend of neighborhood malls in Dubai |
| Elsewhere | Australia India New Zealand Nigeria Pakistan South Africa |
90%+ local franchises, difficult to get foreign brand investors New government equals a very positive business attitude Few consumers, but pro foreign franchise brands Foreign franchises have numerous operating challenges Not now for foreign brands 90%+ local franchises, but hope for foreign brands |
The Fastest 2 Minutes in International Franchising
In 2014, EGS’ US franchisor clients are very busy finding licensees in over 25 countries. Our GlobalTeam™ of highly experienced international development project managers contributed to the following brief summary of the franchising environment around the world.
| Asia | China | Food quality stinks; new F&B franchises shrink |
| Japan | New, large scale US F&B investment | |
| Malaysia | Government barriers for foreign franchises | |
| The Philippines | New professional companies seeking US brands | |
| Thailand | What coup? New franchise investment by major groups | |
| Viet Nam | Just bring coffee brands | |
| Americas | Argentina | You get paid in soybeans |
| Brazil | 95% local franchisors, government barriers to entry | |
| Canada | True regional development beginning | |
| Chile | Perfect market, except for the lack of people | |
| Colombia | Show me the money and where it came from | |
| Mexico | Selected areas booming | |
| Peru | GDP/capita growth and resulting investment wonderful | |
| USA | Franchise model in the birthplace of franchising in peril | |
| Europe | Czech Republic | Small market, but a perfect European brand showplace |
| Ireland | Investors not quite back to investing | |
| Germany | English not spoken and ‘We already have it’ | |
| Poland | Good franchise growth outside Warsaw | |
| Russia | Really? Now? | |
| Spain | Fast recovery, many investors seeking brands | |
| Turkey | US F&B booming, despite tin pot ruler | |
| United Kingdom | Analysis paralysis. Build a pilot first, then investors | |
| Middle East | Egypt | Next year, really… |
| Saudi Arabia | New F&B brands entering. Permits to open units??? | |
| UAE | Abu Dhabi and ‘More fast food, please’ | |
| Others | Australia | 90%+ local, locals like local brands |
| India | Separate universe | |
| New Zealand | The opposite of Australia, but few consumers | |
| Nigeria | Really??? | |
| Pakistan | Not Karachi | |
| South Africa | 90%+ local franchises to date, but a change is coming |
2014 International Business Predictions
Here are some snippets from various research pieces I have seen recently seen from a wide variety of sources.
MONOCLE magazine publishes an annual soft power survey. They define ‘soft power’ as how well countries project themselves on the global front and influence the world outside the use of military force. Germany is the best of the 30 countries listed and is trending upward. The UK and U.S. are 2 and 3 and trending downward. Japan (5), Australia (7), Canada (9), Italy (10), Singapore (17), Spain (12), China (20), and Mexico (24) are trending upward. Brazil (19), South Korea (14), Turkey (26) and Poland (30) are trending down. Chile joins the list for the first time and Israel drops off the list.
See www.monocle.com for the complete list and details.
THE ECONOMIST magazine recently published its Global Business barometer, which surveyed 1,500 executives who see the business environment much brighter in the Middle East and Africa, Eastern Europe, Asia-Pacific, North and Latin America. The trend has gone from significantly negative in mid-2013 to significantly positive in late 2013. (Source: The Economist; December 2013)
A year-end McKinsey study found that global executives are more optimistic about economies growing, especially in the developed world. Of course, this is a mixed signal as developing countries are seeing more challenges. (Source: McKinsey, ‘Economic Conditions Snapshot’, December 2013)
The Boston Consulting Group released a study that indicates that “. . .despite dreary news of economic slowdowns and market volatility from Brazil to India to Turkey, consumer sentiment in some of the world’s largest rapidly developing economies remains remarkably bullish. Shoppers in key emerging markets feel more financially secure and far more confident about the future than those in developed economies. They also express greater enthusiasm for brands and for consumerism itself.” (Source: Boston Consulting Group, ‘Why Emerging-Market Consumers Remain Bullish’, 11/27/2013)
Frankly, at the end of 2013 it is possible to find optimism and pessimism around the world depending on which survey you read. More are now positive. They were negative in early 2013.
The bottom line is that the global middle class – the consumer class – continues to grow fast. And this group wants the brands, quality, convenience and customer service that U.S. franchises represent.
