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International Fast Food Franchises

Recent innovations in communications and technology have made it possible for companies located in one country to easily conduct business in another country. Traditionally, international expansion has been the focus of manufacturing companies who export or produce products overseas for sale in foreign countries. Services are more difficult to export because of the difference in culture and language. One industry which straddles the definition of service and manufacturer is the fastfood industry, which is an American invention and which has changed the way Americans eat and interact. Successful franchise operations such as McDonald's and Kentucky Fried Chicken (KFC) have made inroads in countries as diverse as China, India and Estonia (Lawrence, 1994, p. 46; Gordon, 1995, p. 0403CL040; Connolly, 1995, p. 510CL013). This research examines the reasons for international expansion, and considers the advantages and disadvantages for expanding fast food operations into foreign markets.

General Factors to Consider in International Expansion

The primary reason that fast food operators expand into the overseas market is the saturation of the American market and the large potential that the foreign market holds. The number of international units operated by American chains grew 39 percent during the late 1980s, and significant expansion continued through the early and mid-1990s. The top 100 restaurant chains increased their international unit count by 11 percent between 1991 and 1993, and sales growth internationally increased by 12 percent during the same period, compared with only a 6.8 percent increase in the domestic market (Lawrence, 1994, p. 46).

The international market is increasingly characterized by appealing demographics for fast food companies, also. There are increasing numbers of middle class families in the international market, and a shift in lifestyles which favors American-style fast food operations. Coupled ...

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International Fast Food Franchises. (1969, December 31). In LotsofEssays.com. Retrieved 08:56, March 29, 2024, from https://www.lotsofessays.com/viewpaper/1696249.html