Course Title:

Contemporary Issues in Business

(M. Phil 1st Semester)

Assignment: Case Study (Franchising)

Submitted to: Dr. Sadia Farooq

Submitted by: Anam Zaid (Roll nu.12)

Maria Rehman (Roll nu.13)

Amina Zulfiqar (Roll nu.14)

Nosheen Kanwal (Roll nu.17)

Date: 19th April 2018

 Case Study
Piping hot dogs
A case of a Malaysian franchise

Q. NO.1:
Based on the case, identify the challenges and competitions that 1901 Hot Dog
could be facing locally and internationally in line with the competitiveness of
the fast food franchising business.

Challenges Faced by 1901 Hot Dog

Although franchising is one of the sectors that has shown resilience and continues to grow in
this tough economic environment, the sector is not without risk for franchisees and franchisors.
1901 Hot Dog faces many challenges as a fast food franchisor, these are as follows;

 Single Independent Entity

One of the challenges that the company is facing is making franchisees understand the
importance of working as a single independent entity rather than just being agents.

 Outlet’s Marketing Plans

Rozidar works to make the franchisees understand that they have to be independent especially
pertaining to their outlet’s marketing plans, although she makes frequent visit to all the outlets
of 1901 Hot Dog.
  To Go International
Another challenge is to go international. What are the countries where they can easily enter is
also a challenge. The company plans to spread its wings into the Middle East due to the growing
demand and growth potential for Halal products there as well as in neighboring The Association
of Southeast Asian Nations (ASEAN) countries where the world’s largest population of Muslims
can be found. The company’s strategy is to penetrate those countries that have minimum entry
barriers and those that have a potentially high level of customer acceptance of its product and
its concept.

 Bringing the Right Franchisees on Board

The long-term success of franchise will depend largely on the quality of your franchisees. The
challenge is finding the right people with the right qualifications. By the fact that the company
receives at least 30 enquiries on a daily basis, with at least four applications each week from
potential franchisees and again that one is a challenge to choose best people among a list of
candidates.

 Increasing competition (market share) 

A number of foreign-owned brands such as Starbucks, Burger King and Domino's Pizza have
now been incorporated into the local market. While this has a positive economic impact and
gives consumer more choice, it significantly increases competition and puts more pressure on
the performance of 1901 Hot Dog.

 Rising costs 
The current drought, which has had a direct impact on food price inflation, will significantly
increase costs for franchises within the fast-food and restaurant sector. With consumers
already struggling due to shrinking disposable income, it will be difficult for franchises to pass
on these costs to them.

Other Challenges
 Management problems
An agency relationship is a contractual arrangement under which one person (the principal)
engages another person (the agent) to perform some service on his behalf. The agent is also
granted some decision-making authority. Sometimes the agent does not act in the best
interests of the principal – this is the so-called “agency problem”.

 Free-riding problems
The free-riding problem arises when some of the franchisees reduce the quality of their
products or services to maximize profit, or contribute fewer resources to promotion or
advertising. The incentive to free-ride is particularly high if the level of repeat customer is low.
This behavior depreciates the overall reputation of the chain and the future profits.
Nevertheless, franchisees that cheat on quality bear only part of this cost and free-ride on the
services provided by the franchisor or other franchisees.

 Uniformity of products
In addition to good quality, customers expect to get uniform products in any outlet within the
franchised system. They might not like a product that is different from the one they used to
have in other stores. The franchisees, therefore, need to have consistency of their operations
and maintain uniformity of their products and services in order to meet customers’
expectations.

 Supply chain issues

Managing the supply of products for one or two franchisees might be easy for the franchisor
but the supervision gets complicated with the existence of numerous franchisees and even
more with the existence of a large product profile.

 Franchisee Training and Support

Franchisors must provide Franchisees with initial and ongoing training together with a back-up
and support which no independent restaurateur, fighting for market share against highly
aggressive, low margin competitors, could ever hope or expect to match. The Franchisor
therefore needs to establish a systemized initial and ongoing training and support programmed.

 Sustainability

Sustainable development is the means by which a company progresses towards achieving an

identified set of sustainability goals and harnesses competitive advantage.

The purpose of this is to identify barriers to implementing sustainable practices in restaurants,

and explore ways that restaurateurs can incorporate sustainable business practices. Energy
consumption, water use, waste production, and food through put are the four sustainability
indicators addressed.

 Government/ Regulatory Factors

To go international is not an easy task. For entering into another country’s market 1901 Hot
Dog should to follow some regulation and state licenses.
 Competition Faced by 1901 Hot Dog
At the same time, the increase in the number of fast food chains in Malaysia – including those
which had already been established for quite some time, such as Dunkin’ Donuts, KFC,
McDonald’s, Pizza Hut, Domino’s Pizza, Auntie Anne and A&W – provides 1901 Hot Dog with
no other choice but to change for the sake of survival.

Due to competition, 1901 Hot Dog facing many problems. These are as follows;

 Rising costs 

The current drought, which has had a direct impact on food price inflation, will significantly
increase costs for franchises within the fast-food and restaurant sector. With consumers
already struggling due to shrinking disposable income, it will be difficult for franchises to pass
on these costs to them. The 1901 Hot Dogs experiencing lower profit margins due to increased
expenditures.

 International Economic Condition

Its international expansion in Singapore and Indonesia would certainly make the company
subject to these countries’ economic conditions, most significantly their lower disposable
income due to the rise of unemployment.

 Brand advertising and promotional campaigns

In view of the growing competition that 1901 Hot Dog is facing, the company decided to invest
more in brand advertising and promotional campaigns – both measures designed to help them
withstand competition.

 Extensive Investment in Research and Development

In fact due to intense competition, the company has resorted to a higher level of innovation
through extensive investment in research and development, so that newer products with
further enhanced quality and more creative food presentation can be offered.

 Healthy and Quality Products

Consumers aren't as focused on foods fit for dieting in terms of cutting fat and calories as
they once were. Many are now more motivated to purchase products they deem to be
more closely aligned with health and well-being, such as products devoid of artificial
ingredients, GMOs, or pesticides. The more the competition the more focus on quality is
necessary by 1901 Hot Dogs.
  Differentiation in an oversaturated marketplace

The more the competition, the more difficult is to differentiate the product. The biggest
challenge food manufacturers will face is competitive differentiation. So much innovation
has occurred over the past 10 years that multiple companies represent the proliferation of
emerging brands across categories, so differentiating from one another will be difficult.

Q. No. 2:
Describe the strengths of 1901 Hot Dog franchising program as compared to
other fast food franchising companies?

Ans: There are following strong points of 1901 Hot Dog franchising program as compared to
other fast food franchising companies as:

 Lowest setup cost

Its franchise programs compared to other more established brands where initial investment
ranges from RM15,000 to RM 300,000, depending on whether it is a pushcart, kiosk or diner;
1901 claims this is the lowest startup cost compared to other foreign franchises which can cost
RM500,000 and above.

 Innovation
Rozidar constantly has in the back of her mind the issue of quality which she regards as the
mean to counter competition. She realizes that in the food business, quality is not merely
related to taste but also to the ability to meet the standards in food preparation and
presentation. In fact, due to intense competition, the company has resorted to a higher level of
innovation through extensive investment in research and development, so that newer products
with further enhanced quality and more creative food presentation can be offered.

 Intensive market campaign

Owing to its strong brand recognition locally, 1901 Hot Dog has been able to generate higher
sales and through its intensive marketing campaign, it has even managed to recapture the
youth market that has been targeted by foreign giant fast food franchises. But Rozidar has a
firm belief that if the company intends to stay competitive and relevant in the food franchising
business it has to go overseas.

 Strong commitment
The company recorded excellent growth and with their strong commitment has grown from
merely a single pushcart at Sunway Pyramid Departmental Store in Klang Valley to a total of 84
franchise outlets in Malaysia, including five outlets in Singapore and three outlets in Indonesia,
with an estimated annual turnover of RM 45 million for the year 2008.
  Staff training sessions
All their staff undergoes a series of intensive and comprehensive in-house training sessions to
equip them with the necessary operational skills and excellent customer service.

 R&D
As the company strove to maintain the quality of their hot dogs, a lot of money was thrown into
ensure that sufficient research and development was carried out, along with lots of ongoing
discussion on ways to enhance the nutritional value and convenience to the public of 1901’s
hot dogs.

 High & consistence quality of products

Rozidar constantly has in the back of her mind the issue of quality which she regards as the
mean to counter competition. She realizes that in the food business, quality is not merely
related to taste but also to the ability to meet the standards in food preparation and
presentation.

 Cleanliness
they provide not only rich quality but also hygienic products which are made in a very clean and
healthy environment that makes them different from any other fast food franchises.

 Easy & simple manageable business model

The attractiveness of 1901 Hot Dog also lies in the fact that most of its franchisees are owner-
operators themselves, which gives the company a plus point compared to other more
established franchise chains. The company tries to ensure that it chooses franchisees who are
dedicated to the business and who will regard other franchisees of 1901 as their partners, so
that knowledge sharing will become natural among them. This will then strengthen the
franchise even further as when franchisees are successful, they generate a steady income for
1901 Hot Dog.

 Strong goodwill
1901 Hot Dog has set a huge & strong public image. Customer usually prefer their products
over other brands because of its already build strong goodwill.

 Right universal values

It is of utmost importance, according to this CEO, for the company to maintain consistency in
the quality of products served in all their outlets, as she believes that all 1901 outlets must have
the same wholesome image and be associated with the right universal values and halal brand.

 Halal food
1901 Hot Dog also has a large variety of halal foods for their Middle East customers as Dubai,
Kuwait etc.
  High quality ingredients
The founder of 1901 Hot Dog stresses using only quality ingredients in the making of their hot
dogs, such as chicken breast meat, and prime beef cuts, and no mechanically de-boned meat is
used. The company has a belief that only quality products should be purchased by their
customers and it is not unusual for them to go all out to ensurethat all ingredients are of high
quality including even their vinegar.

 Competitive pricing strategies

Through its competitive pricing strategy, 1901 Hot Dog offers a very competitive price for
undertakers of its franchise programs compared to other more established brands where initial
investment ranges from RM15,000 to RM 300,000, depending on whether it is a pushcart, kiosk
or diner; 1901 claims this is the lowest startup cost compared to other foreign franchises which
can cost RM500,000 and above.

 Self-owner operator franchisees

1901 Hot Dog also gives importance to the fact that most of its franchisees are owner-operators
themselves, which gives the company a plus point compared to other more established
franchise chains. The company tries to ensure that it chooses franchisees who are dedicated to
the business and who will regard other franchisees of 1901 as their partners, so that knowledge
sharing will become natural among them. This will then strengthen the franchise even further
as when franchisees are successful, they generate a steady income for 1901 Hot Dog.

 CSR practices
1901 Hot Dog prefers CSR & Going Green practices as well as it gives clean and hygienic food so
that it helps society to remain healthy. 1901 Hot Dog feels that the image of unhealthy fast
food attached to it will be eradicated when the company becomes more intensely involved with
the CSR activities and therefore it justifies the re-branding of its company.

Q. No. 3:
Analyses the importance of 1901 Hot Dog in carrying re-branding exercise and
associating with established airlines company like AirAsia in a move to stay
relevant in the industry?

Ans: Importance of 1901 Hot Dog in carrying re-branding exercise:

The re-branding strategy is timely for 1901 Hot Dog. The rise of anti-fast-food protestors
throughout the globe and the perception of fast food as unhealthy have led 1901 Hot Dog to
look into how it can still be relevant in presence of the ‘‘going green and healthy eating’’ craze
among consumers throughout the world. As one tactic, 1901 Hot Dog has tried to disassociate
itself from the American fast food image (with its connotation of unhealthy food choices) by
engaging in various types of corporate social responsibility (CSR) activities such as community
work at the old folk’s home, charity programs and other community-based activities. 1901 Hot
Dog feels that the image of unhealthy fast food attached to it will be eradicated when the
company becomes more intensely involved with the CSR activities and therefore, it justifies the
re-branding of its company.

Associating with established airlines company like Air Asia

In a recent move to further strengthen her hot dog business, Rozidar undertook a joint effort
with Air Asia, Malaysia’s leading low cost carrier airline, to offer 1901 Hot Dogs on board their
flights. The company initially carried out a test marketing scheme in which two types of hot
dogs were available on AirAsia’s domestic, regional and international routes starting 1
December 2008. So far, according to Rozidar, the sales of the hot dogs have been very
encouraging and the company is in the midst of creating signature hot dog to be served only to
AirAsia’s customers. When this is done, Rozidar is confident that the hot dog sales on board Air
Asia will bring in a substantial amount of revenue for the company. Rozidar feels that their
association with Air Asia is like a cap to a bottle, as both companies share similar values,
particularly building customer relationships, with 1901 Hot Dog’s tagline of ‘‘Food for
Friendship’’ and Air Asia intent on spreading the love among its customers. This partnership will
also allow 1901 Hot Dog to penetrate into a wider market through Air Asia passengers and will
certainly create a win-win situation for these two highly-acclaimed local companies. The ability
of 1901 to look into innovation seriously through research and development activities; give the
company a far greater possibility of fulfilling its vision in the fast food industry while providing a
health-conscious image.

Q.No.4:
What are the considerations that 1901 Hot Dog could have made before
embarking into international business in general and specifically into the
Middle-Eastern countries?
If your business has done well stateside, you may be primed to expand overseas to capture
additional customers and gain market exposure throughout the world.
But before you take that major step, there are some aspects to consider.

Considerations that should take in international business

 Standardization of products:
The first thing u need to consider is the quality of your products and services. If you are
planning to expand internationally, you will need to provide the high quality of goods and
services to your foreign customers.
Furthermore, every market has its own standards of quality and assurance that need to be met
in order to create a strong position of your brand. Along with the best quality of products, you
also need to be able to maintain a certain amount of consistency in your standards of quality.

In order to ensure quality, rigorous testing of your product quality should be conducted to
ensure that you can always perform up to your mark and live up to your name and customers
expectations.

 Flexibility:
Adaptability and flexibility are a vital part of business operations. When enter into a foreign
market you might face a lot of challenges that may demand drastic changes in order to allow
your business to grow. Rigidness of a business can lead the brand towards a sharp decline.
Hence, be open to new ideas as every market will have its own forms of marketing goods.

You will need to adapt the local culture and business trends and find a balance between the
aims you want to achieve and the means of accomplishing them.

 Language and cultural differences:

Within local markets, expansion can be quite easily accomplished as there are no language and
cultural barriers to overcome. However, for international markets, overcoming this obstacle can
become very challenging if a properly organized plan is not followed .

Having adequate information about the local market of the country where you wish to expand
your business is also necessary as cultural differences can often hinder business growth.

You can only find out about the details from studying your targeted international market and by
conversing with local representatives who have a better grasp of the business trends prevalent
in that area.

 Market Considerations:
In addition to monitoring your product quality, you also need to consider whether the product
you are trying to sell has a demand in your targeted foreign market. There are two things that
you need to discover:

Firstly, the sustainability of the product in the market and its demand. So, you need to be
careful when choosing your global expansion.

Secondly, availability of similar products locally at cheaper rates. If a country produces a good
quality product in its local factories and providing it to the people at cheaper rates, they will be
less likely to opt for imported items. This means that you should analyze the product available
in your target market.
  Dedication and Commitment:
Global expansions can be tough to accomplish if you are not completely dedicated to the task
at hand. You will need to take one step at a time and be clear about the aims you wish to
achieve by selling your products internationally.
You will also need to find local employees who are as dedicated to this cause as you are. If you
are not committed to your goal, you will have a hard time in achieving it.

 Rules and Regulations:

Every government has its own set of rules and regulations that company need to follow when
they are importing their goods into a foreign country. There are tax laws and legal
considerations that must be taken care of before the expansion can go underway.

Find good legal counsel in your country as well as your targeted international markets to help
you with these formalities to provide your business with a smooth road to success.

 Investment and capital:

Global expansion does not happen overnight, and most certainly is not a cheap process. Time
and money are needed to take your business to the next level across geographical borders.
Thus, for an international expansion, you need to have enough capital to be able to
successfully invest it in another country’s business market.

Ultimately, these considerations along with the right amount of time,, money dedication, and
local market awareness can give new heights to your brand as it grows on an international level
with the help of your global expansion plans.

Considerations that should take specifically into the Middle-Eastern countries

Middle East encompasses an enormous geographical area as well as a vast and diverse mix of
cultures, and boasts both rapidly modernizing markets and an educated workforce. The Middle
East can provide you with an extremely lucrative market and be an excellent vehicle for
exponential growth.
In order to be successful, it is imperative to first become as familiar as possible with Middle
Eastern business practices. Although specifics will vary across countries and cultures, there are
some key points to keep in mind when doing business in this region.

 Relationships Are Everything:

To be successful in the Middle East you first need to understand that, more than perhaps
anywhere else in the world, business and personal relationships are one and the same.
Businesspeople in the Middle East want to deal with people who they know and trust. No
matter how great a product or price your brand is offering, if you do not have a connection with
the right people you are dealing with, you will have difficulty finding success.
Q.No.5:
Briefly, evaluate whether the current business model of using franchising as the
best mean to expand its market internationally. What could be the other
possible alternatives 1901 Hot Dog should consider to make a presence in the
foreign market?

Ans: Both Rozidar and Zakir hope that one day the 1901 Hot Dog franchise program will
become the most successful hot dog franchisor in Malaysia as well as in the region. To fulfill
their dreams, they have developed a master plan for how this can be achieved. Rozidar firmly
believes that brand development is the initial critical step and with their further effort of re-
branding they are moving closer to realize their dreams. Through the development of flagship
outlets throughout the country, the concepts of 1901 Hot Dog can be demonstrated to
interested individuals who plan to have a business of their own and wish to take advantage of
1901 Hot Dog’s franchising opportunities. The final step in the plan is to bring their brand to the
international market by issuing licensing rights to interested parties abroad that would like run
the 1901 Hot Dog’s hot dog business. If things go well, this vibrant couple would love to see the
establishment of a ‘‘1901 Hot Dog Leadership Academy’’ which would become an avenue for
training young entrepreneurs, who can then in turn contribute to nation building.

The Re-Branding strategy

In a move to remain relevant in the food franchise business and to keep up with the influx of
new players, 1901 Hot Dog has put effort into rebranding its hot dog business. In 2008, the
company re-branded 1901 Hot Dog into a lifestyle and ‘‘people’s’’ brand as part of its business
expansion plan, and the company upgraded some of its pushcarts to bigger outlets such as
snack cafes. Rozidar and Zakir continue to believe that they are able to express themselves
through 1901 especially when it comes to brand development. Zakir was quoted as saying that
‘‘It’s merely an expression of our own beliefs and how we want to treat others.’’ It is logical
then that this couple has chosen to spread the values of love, peace and harmony through their
new brand positioning strategy.
The re-branding strategy is timely for 1901 Hot Dog. The rise of anti-fast-food protestors
throughout the globe and the perception of fast food as unhealthy have led 1901 Hot Dog to
look into how it can still be relevant in presence of the ‘‘going green and healthy eating’’ craze
among consumers throughout the world. As one tactic, 1901 Hot Dog has tried to disassociate
itself from the American fast food image (with its connotation of unhealthy food choices) by
engaging in various types of corporate social responsibility (CSR) activities such as community
work at the old folks home, charity programs and other community-based activities. 1901 Hot
Dog feels that the image of unhealthy fast food attached to it will be eradicated when the
company becomes more intensely involved with the CSR activities and therefore it justifies the
re-branding of its company.

The Global Trend of Going Green

Following the global trend of going green and being environmentally friendly, 1901 Hot Dog
sought assistance from one of the most reputable brand consultants, an Indonesian-based
company. As a result, it has decided to adopt the color green in its logo instead of its original
red, which is often associated with giant fast food chains from the US such as McDonald’s and
Burger King. The management of 1901 Hot Dog feels that the new color and design of their logo
and outlets convey a more exciting image, one which is brighter, fresh and fun. In a move to
improve its brand image among customers, the company uses the new tagline ‘‘Food for
Friendship’’ to represent the relationship between the company and its customers
(www.1901.com). ‘‘We’re a brand that works on bringing people together, respecting
differences and uniting for peace,’’ Rozidar was heard to say when interviewed by Borneo
Bulletin recently.

Customize outlets

Although standardization of quality was stressed in all of their outlets, Rozidar mentioned that
they do customize certain outlets to cater to different target markets. In the instance of its
Kuala Lumpur City Centre branch, 1901 Hot Dog Hot Dog displays a more contemporary outlook
with several variations in its menu, comprising some signature dishes such as pasta and coffee
and also some hot dogs in the gourmet range.

1901 Hot Dog plans Mid-East expansion

The company, franchisor of the 1901 Hot Dog, will enter Saudi Arabia by year-end, followed by
United Arab Emirates, Thailand, Indonesia and Egypt next year, said chief executive Rozidar.

Besides the 60 outlets in Malaysia, it has five in Singapore.

“PNS Francais will assist us to further upgrade our documentation process flow, automate our
business processes and provide financial support to go overseas. It will invest for us to operate
in a few countries that both parties agree to be viable choice,” Rozidar told StarBiz.

Rozidar said investment in a foreign country could cost between RM1mil and RM1.5mil.

“PNS Francais did not commit a sum but it will help us invest in other countries.

“Depending on the demographics in these countries, we hope to open a minimum of three

outlets in each country,” she added.

For the countries it was going into Rozidar said it could have a master franchisee to invest or
enter into a master franchise agreement.

“From our survey, these countries offer the easiest entry point and the market will easily accept
the product. So far, there is no major competition (for our product) unlike the burger industry,
so it will give us an opportunity to be pioneer there,” she added.
Nineteen O One, established in 1997, is engaged in the setting up of 1901 outlets and the retail
of food and drinks, primarily hot dog.

On why it was expanding now, Rozidar said: “We are now ready in terms of resources and
operations, and are better prepared for any damage control. We want to grow 1901 as a global
brand.”

The company also plans to expand its number of outlets in Malaysia to 100 by end-2007.

“We are looking at ways to improve on the sales of our franchisees. We want all the outlets to
be profitable,” she said.

The company’s revenue was RM9.5mil in the financial year ended Dec 31, 2005.

Rozidar said she expected revenue to increase by 200% next year.

Other possible alternatives 1901 Hot Dog should consider

 Pitching is Different
Regardless of however you’ve sold your business previously, when entering a new market in a
new location, the pitch needs to be adjusted to meet local standards. That could mean
tweaking either content or format and beyond. In some cases, a massive overhaul might even
be required to make your presentation successful.

In the US, for example, speaking from my own experience, new businesses must have a precise
pitch, getting the message across quickly and efficiently. While Europeans reserve 60 to 90
minutes for meetings, only 30 minutes are provided in the US to pitch a product or service.
Also, meetings start on time and, more importantly, end on time.

It’s important to look at the market you’re hoping to broaden to. Research potential changes
early to set expectations and avoid surprises.

 Embrace Your Existing Record

Don’t run away from your success in other markets. Just because your product wasn’t born in
the market you’re entering, don’t mean it won’t or can’t be successful. In fact, it’s quite the
opposite. Your prior success breeds new success. Oddly, though, some seem to think this is the
case and I’ve seen it firsthand.
When I first considered venturing into the US, several web entrepreneurs in Europe told me
that digital products outside the US are labeled as “not invented here.” Some said it gives off an
inferior value. But I quickly discovered that’s largely a myth.

If you can show a track record in a significant market, regardless of locality, results aren’t
guaranteed, but it makes your pitch a lot stronger. My company’s success overseas has only
helped me market our services more effectively and build trust among key audiences.

 “It’s Great” doesn’t Mean “YES”

You can prepare as much as possible but, in the end, there will be some cultural communication
issues in whatever market you extend into. Whether you’re a US company venturing into
Germany or vice versa, local markets have their own established way of saying and doing
things.

As an example, with my company’s existing international track record, it was easier to set-up
initial biz dev meetings with larger companies in the US. However, first impressions were a bit
misleading. I quickly learned that in the US, positive feedback was common and, in some cases,
was actually constructive criticism. Phrases like “it’s great” or “we like it” are often used in a
meeting but they didn’t necessarily mean that we were close to a deal.

This is a cultural communication issue. In Europe, it can take a fair amount of time before you
get a “this is great.” When it’s said, it generally means that your talks have really evolved.

Remember to keep in mind cultural and language differences when having conversations with
third parties. Don’t get tripped up by preconceived meanings and don't make any assumptions
on the status of a conversation. Be prepared to track down real decision makers.

 Picking a Headquarters

Where your expansion market headquarters resides is an important question. Many factors
contribute to selecting the ideal location for a corporation’s local HQ. Is your business product
or sales related? Where you find the talent you need is hugely important when entering a new
market.

When my business came to the states, I quickly discovered that Silicon Valley, New York and
most of the well-known cities for European technology companies entering the US just weren’t
the best options. Our business goals didn’t align with those areas. In the end, I chose Chicago
because of its history as a major retail hub. Its central location also made it easier for our team
to travel throughout the US.

Make up your mind and choose one primary headquarters location based on the needs of the
business to flourish. Don’t make a decision based off what you think you know given trends or
general biases.
  Don’t Underestimate Personal Effort

Many countries have ESTA agreements (electronic system for travel authorization) making

business travel a bit easier. Some don’t, however. The US does have ESTA agreements in place
with many countries. Try to determine the status of the ESTA agreements in the country you’re
looking to enter.

Check if you need a visa. This varies from country to country. Depending on how much time you
spend in your expansion market, you may need to file a tax statement or apply for personal
identification (Social Security number, etc.). Even opening a bank account can take many weeks
to complete.

Travel and the related efforts you put into the process can be exhausting but there’s no other
way to accomplish your goals and grow your business effectively. Be committed.

 Go Big or Go Home

Building a business in a new market is expensive. It requires a lot of funding. In my experiences,

user acquisition, legal fees, marketing and salaries are just a few services requiring larger dollar
amounts in the US than overseas. The closer you get to the actual product/service launch, the
more you need to spend.

My advice is to set a spending limit. Ensure there is enough money reserved to avoid having to
raise additional funds after the launch. You want to have some firepower left over from the
launch to achieve maximum results.

Although expanding is never easy, knowing what to expect will let your business thrive at any
location. Adjust expectations and business plans to cater to your region. Knowing how each
area operates prepares a company, no matter how big or small, for success on an international
level.