Should You Expand the Franchise Abroad?

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Are you thinking of expanding the franchise into new territory? Before you take the plunge, you'll need franchise information regarding the new market's demographics, demands and competition. You may also want to hear stories of other franchisors who have moved outside their comfort zones to expand their empires. From fast food franchises to restaurant franchises to retail franchises and tech franchises, there is always a market for a good product and good service.

"Location is key to how your store is actually going to do," says Ben Gudoy Jr who took the franchise L&L Drive-Inn from Hawaii and brought it to Gardena and San Diego, California. "We targeted places where we saw ties and knew people would eat the starches we offered." He said their plate lunches made of white rice scoops, macaroni salad scoops and a meat entree were hit favorites in Hawaii but he knew that the Hispanic, Asian and military populations would go for it in California, Las Vegas, Washington and Colorado. "It's just a matter of educating," added franchisor Eddie Flores Jr. "They just don't understand the concept. But once they try it, they'll eat it."

LA Boxing was an offshoot of the LA Fitness center that started as a dank boxing gym in 1992. Anthony Geisler, a member-turned-franchisee, opened the first LA Boxing club franchise in suburban Aliso Viejo, California in 2002. With "moms, strollers and vans," Geisler said "I knew that's where the product would go." Quickly, his secondary gym out-grossed the first one so he knew he had stumbled onto something good.

In 2004, the franchise moved from simply selling gym memberships to offering branded boxing gloves, bags, mats and rings in multiple locations. Soon another franchisee came to them from Albuquerque, New Mexico and a third from Chantilly, Virginia. Now there are 100 stores nationwide. This year the franchise reeled in $6 million, with the top-grossing locations surprisingly all situated on the East Coast.

At first, both of the franchise owners were worried about spreading their restaurant and fitness franchises outside their home states. Would Californians understand the concept of a plate lunch? Would the East Coast accept a fitness center called "LA Fitness?" These questions loomed but ultimately, expansion was a good thing. For Flores, adapting his traditional Hawaiian meal to regional cultures was a smashing success. For Geisler, it was just the opposite. Sticking firm to the Los Angeles name-brand proved crucial. Either way, expansion sometimes involves educating new markets and building a buzz.