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Franchising Dilemma 1: Global versus Local Brand Image

For many franchisers, the solution has long been obvious: just fade into the landscape. KFC is as good an illustration as one can find. In Japan it sells tempura crispy strips, in Northern England it stresses gravy and potatoes, in Thailand it offers fresh rice with soy or sweet chilli sauce, in Holland it makes a potato and onion croquette, in France it sells pastries alongside the chicken, and in China the chicken gets spicier the further inland you travel.

McDonald's also continues to adapt. There is a meat-free McNistisima menu for the fasting Greek Orthodox in Cyprus, a McRye burger in Finland, a McNifirca burger in Argentina, a kosher McDonald's in Israel, and a McKroket in the Netherlands. Consider the latest fast-food sensation in Kuwait City: the McArabia, an "Islamized" product on Arabic flat bread and served in a restaurant described by the local marketing director, without a trace of irony, as "the mother of all stores."

 

When is your pizza hot?

"I like my pizza when it is hot," declared Dr Hashem H. Al-Refaei, one of our Arab PhD students at THT.

A western Pizza Hut manager thought that this could (only) mean that he liked it either when it was just out of the oven or when it was spicy. But a Pizza Hut manager from the UAE understood the subtlety of localized meaning. Hashem had meant "I like a pizza when the weather is hot."

 
 

This localized adjustment to a menu is a visible manifestation of a more profound strategy: "multi-localism" - what we might call "democratizing globalization," so that people everywhere feel some stake in how it impacts on their lives. Has McDonald's packaged itself to be a "multi-local" company by insisting on a high degree of local ownership, or is it just a dictat from HQ insisting on local menus? Poland has emerged as one of the largest regional suppliers of meat, potatoes, and bread for McDonald's in central Europe. The company is gradually moving from local sourcing of its raw materials to regional and now to global sourcing; every sesame seed on every McDonald's bun in the world comes from Mexico. Friedman asserts that "people will only take so much of 'globalization,' to the extent that companies with a US origin will only be successful through being multi-local, by integrating around the globe economically, without people feeling that they are being culturally assaulted" (Friedman, 2000).

The Friedman thesis ("No two countries that both have a McDonald's have ever fought a war against each other") is obviously no longer technically accurate, but the underlying construct still deserves attention. What Friedman fails to recognize is that globalization does not have to be an all-or-nothing proposition. Let's not forget the economic and social benefits that franchising can offer countries: much needed foreign investment, products that are in demand, entrepreneurial opportunities, the combination of local and regional sourcing, and the culture of customer service and reliable operations, which indigenous operations will surely emulate.



The point is that the franchise system has become far more than just a familiar brand name in these countries; its effects extend well beyond those enjoyed by franchisees and their customers. But being a local brand everywhere is not enough. Information needs to feed back into the main centralized system to generate a truly transnational approach.

Lets see how McDonald's has reconciled this first basic dilemma of franchising its core brand.


Date: 2015-01-12; view: 949


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