The head of global car-cleaning franchise Nanotek says franchisors looking to expand internationally must mould their franchise model to the market they’re entering.
Jim Cornish is the chief executive of Nanotek, which recently became the first Australian mobile franchise to launch in Russia, following its successful entry into the Middle Eastern market.
Nanotek hopes to establish more than 130 mobile units internationally by the end of the year, with Cornish saying exports already contribute to 60% of the company’s operations.
Cornish says Russia has huge potential for Nanotek because it is a “large, untapped market”.
The franchise was launched in Russia under its former name, Ecowash Mobile, due an extensive operation approval process, which began before the company’s recent transformation to Nanotek.
Cornish says the legal process to establish Nanotek in Russia took about two years, admitting it was a difficult market to get into.
“Russia, like any market, has a lot of peculiarities, so it’s important to have a good partner in those countries who can take the system as it is and give you feedback on how the system should be adapted to suit that market,” he says.
In addition to the language barrier Cornish says the level of regulation regarding Russia’s franchise industry was scant compared to what he was accustomed to in Australia.
The cultural barrier also became apparent but Cornish soon found how to overcome it.
“It doesn’t matter how much smaller the world gets nothing beats meeting with people face to face …you’ve got to make sure you have appropriate face-to-face contact,” he says.
“Russia is a developing market so it’s very entrepreneurial – it’s all about networking, relationships and who you know, whereas in the western world we tend to think that technology will solve everything.”
Cornish believes Nanotek will appeal to Russian consumers and prospective franchisees because it’s the sort of system that has a broad appeal.
“It’s a low cost of entry, it’s an everyday consumable service and it’s a very structured system. The other advantage is the development of the car culture, the phenomenon around shows like Top Gear,” he says.
Cornish says the challenge for franchisors is to brand globally but systemise locally, emphasising the importance of customising franchise models to suit a particular market.
“It can be tempting to become possessive of the way the system is… but you need to cater to the market by getting the right (locally based) partner and acting on their feedback,” he says.
Cornish offers some tips for franchisors looking to expand internationally:
- Now’s a great time given the strength of the Australian dollar.
- Focus on entrepreneurial markets. The US has always been viewed as the pot of gold, rather than the BRIC countries Brazil, Russia, India and China.
- Be flexible. You can’t enter a market without customising your franchise model first.