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Global Gobbling

Restaurant franchises from all around the world could soon be just around the block from you.
June 1, 2001
URL: http://www.entrepreneur.com/article/40676

Imagine sinking your teeth into a juicy hamburger topped with crispy bacon and ripe pineapple slices. Wiping a glob of dressing from your lip, you eye dessert: peach mango pie.

The provider of these tropical treats, Philippines-based franchise Jollibee, has already opened five stores in California. Although Jollibee isn't franchising at the moment, its popularity has attracted interest from several investment firms. Will ethnic foods offered by non-U.S.-based companies like Jollibee become the next big franchise trend? Ron Paul, president of Chicago-based research and consulting firm Technomic Inc., cautions potential franchisees not to get caught up in all the buzz. "The same rules you would tell anybody about a franchise apply here," Paul says. "If you're the first to try something in a new market, it's always risky. The fact that it's proven somewhere else doesn't prove it works [in the United States]."

While it's true nothing is a sure thing (you should investigate any new franchise before buying), we've spotted some unique restaurants that have earned followings in other countries and demonstrate true crossover potential. One central link between these concepts: they hit a nostalgic chord with different cultures in the United States. For example, Marcel R. Portmann, International Franchise Association (IFA) vice president of emerging markets and global development, points out, "With a lot of Hispanics [living] in states such as Florida, Texas and California, we're starting to see Latin American concepts set up shop and cater to the Hispanic population."

WHAT'S NEW
One smart cookie idea and one game of franchise fun

In 1998, Zack Dalal and a shareholder in his Crest Foods Inc. began negotiations with Nestle for use of its Toll House, Nesquick and Nescafé brands in its Nestle Toll House Café by Chip. The first location opened in Frisco, Texas, in August 2000. Each cafe serves cookies and other bakery items-all baked fresh in front of customers-along with coffee and milk drinks.

How do you explain to your family what franchising is and how it works? If you're low on ideas, maybe Loren Fossie can help. The 34-year-old entrepreneur recently unveiled Franchi$it, a Monopoly-style board game that has players buying and trading franchises and paying royalties for 15 opportunities, including 7-Eleven and The Athlete's Foot. The game, produced by Fossie's company, LA Enterprises Inc., also includes an educational booklet with franchise information and $250 worth of consumer coupons for the 15 featured companies. -Devlin Smith

The Brazilian franchise Bob's may not have cracked the U.S. market, as it hasn't opened stores here yet, but it's a fast-food success in its homeland. Opened by Wimbledon tennis champ Robert Faulkenberg in Rio de Janeiro in 1952, Bob's had nearly 30 million customers in Brazil last year, and the company plans to expand to Portugal.

California has become a target area for Jollibee, which has more than 340 stores in Hong Kong, Indonesia, Malaysia, the Philippines, Saudi Arabia, the United States and Vietnam, among others. Jollibee serves up honey beef rice, a tropical-flavored buko pandan ice cream twist and the Palabok fiesta: thin Chinese noodles and meat sauce topped with smoked fish, deep-fried pork skin, bean curd, sliced boiled eggs and spring onions.

In the past, ethnic food was only to be found in shops set up by immigrants in their own neighborhoods, but now foreign entrepreneurs have begun bringing their food to mainstream America. Apigent Solutions chair Jim Peterson has represented food-service interests for more than 20 years as a board member of the IFA and the National Restaurant Association, but only recently has he seen these companies popping up in the United States. "I see a bit of a push on ethnic-food concepts either coming over on their own as franchisors or being consolidated with American companies and [becoming] available for franchising here," Peterson says.

Popular European concepts have also exported ethnic foods to the United States. O'Brien's Irish Sandwich Bar has expanded throughout Australia, Singapore and the United Kingdom and has two stores in the Chicago area. Founded by Brody Sweeney, O'Brien's serves gourmet coffees, soups and sandwiches. Besides the traditional fixings, customers can choose fillings like Irish Whiskey salami, beetroot, Ballymaloe relish or sweetcorn.

If you're looking for fresh franchise ideas, it might be wise to look globally. As director of the Institute for Franchise Management at the University of St. Thomas in St. Paul, Minnesota, Cheryl Babcock has noticed increasing franchise development in other countries. "It doesn't matter if it's from Asia, Europe or wherever," she says. "A few years down the road, some of these homegrown systems will start looking to the U.S. marketplace." That seems to be happening sooner than expected.


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