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Last week, Black Box Intelligence (formerly TDn2K) (Transforming Data into Knowledge) held the 21st annual Global Best Practices Conference in Dallas, Texas. From January 19th through the 21st, restaurant operators from all over the country gathered to share insights and honor those who have gone above and beyond in creating exceptional businesses. On Sunday, January 19th, Black Box Intelligence (formerly TDn2K) co-founder and chairman Wally Doolin moderated a pre-conference session, the International Symposium. The purpose of the session was to explore the ups, downs and in-betweens of taking a restaurant chain overseas, based on the different perspectives of executives from restaurants both big and small.
David and Goliath in Global Expansion
James Fripp, Senior Director of Global Diversity and Inclusion at Yum! Brands | Peggy Rubenzer, Senior Vice President of People Resources at Shake Shack
Fripp and Rubenzer dove into the basic challenges of global expansion, primarily knowing when the time is right for a company and how to go about selecting the best talent to operate overseas. Fripp explained the number of factors in play when selecting the best talent to operate restaurant locations overseas. One particular factor consider is the hiring and training process for overseas talent. “Who’s choosing the candidates to either fly back and forth across continents or work permanently overseas? How do you vet a candidate for a global mindset rather than a domestic mindset? Because the two aren’t the same.” When and how you use the talent acquisition team really matters. Rubenzer discussed how the Shake Shack team handles talent acquisition for their few locations overseas. “We don’t get terribly involved in the hiring process that happens internationally. We find people who are interested here and pass them over to global partners. For the most part, the people hired to operate international locations are sent to New York and spend five months living the Shake Shack culture, then sent back to hire people internationally based on the culture.”
What’s the BIG deal?
Joyce Mazero, Partner at Gardere Wynne Sewell, LLP | Jay Tobin, Senior Vice President and General Counsel at Dave and Buster’s
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The next section focused on one theme in particular – navigating the legal minefields of international markets. “I want to borrow a concept that was just talked about in the last section – mindset. Mindset in this case has to encompass a legal point of view,” said Mazero. “One of the things I think we all have problems with sometimes is that we come at things with a certain prejudice, biases and set of assumptions. When you want to develop the mindset for an international deal, you have to have the knowledge base for it first.” This is crucial from a legal perspective because there are a number of things to look out for when expanding into international markets. “There’s no way to negotiate business terms or even talk to the other side if you don’t understand whether the economics are going to turn out to be the same or whether the things that you value will be carried out, and more importantly, whether you can enforce anything.” Mazero’s client Tobin shared another challenge a large company like Dave and Buster’s has to consider. The most important message is that domestic success means nothing in regards to international success. “We had to figure out how to take a 45,000 square foot box and move it to parts of the world where you don’t find 45,000 square feet of retail.” Additionally, you must consider how sports viewing changes geographically and how that will affect sales and traffic in each particular area.
How in the world do you make the magic happen?
Lue Kraltchev, International Training Manager at TGI Fridays | Erin Spears, Director of Global PeopleWorks at Brinker International | Sanjiv Razdan, Senior Vice President of Operations at Applebee’s | James Deyo III, Executive Vice President of Franchise and Development at Romano’s Macaroni Grill
What do you have to do to actually see international success? Spears believes you must first decide if going global is right for your company. The problem? “Everyone and their dog is going global.” The competition is increasing, and the franchise model is now looking different. The needs are also different for recruiting new employees as well. Magic is a key ingredient to success in this, according to Kraltchev. You can create magic and use it to your advantage by making the hiring process an invigorating experience. To do this, you must focus on three things: wowing, supporting and grafting. The wow factor is the initial step, and entails communicating the rich history of your brand to your new hires. Then, you show them great support. Finally, you graft them in by showing them precisely how they now fit into the company culture. Deyo’s main piece of advice was to focus on relationships. “If you don’t have a strong relationship with your franchisees, it’s going to be a struggle.” What franchisees want to see is that support matters. It’s just like a marriage, and you have to invest in it. Razdan explained how this concept can be used on the customer side as well. “Customize for relevance. Create something that is truly relevant by way of experience.”
"Customize for relevance" to help engage and differentiate your American brand in international markets – Sanjiv Razdan #GlobalBPC
— Kathleen Buehler (@KathleenBuehler) January 17, 2016