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Skip to 0 minutes and 9 secondsOne of the most important factors in making a decision to expand overseas is the culture of the target country.

Skip to 0 minutes and 22 secondsIn a business context, culture is about how things work in a specific community. When in a foreign country, a franchisor should try to adapt to or at least respect its cultural rules. It is important to maintain a level of cultural humility. There are many cultural aspects to consider, starting with the socio economic profile of the country. For example, what is the potential customer demographic for the franchisee and the size of that group. Also, what do consumers in the target market spend their money on? Research the population and age storage and whether the culture is changing slowly or dynamically. It's helpful to know whether this is an egalitarian society and whether opportunities are equally available to everybody.

Skip to 1 minute and 15 secondsThe rule of law is a critical factor. Find out if the courts are effective or if the rule of law only exists on paper. You will need to know the attitude to foreign investment and whether foreign investors can export profits from the country.

Skip to 1 minute and 35 secondsCommunication is going to be important including, how people communicate with each other and how public communication works. For example, is there a widely used social networking platform like WeChat in China? Are there internet restrictions? Find out if there is a free price and what languages it operates in. A less tangible area to research is the importance of human relationships in developing business activities. For example, whether you need to spend a good deal of time getting to know the prospective franchisee and their family. There may be political or religious restrictions that could impact on the way that business is done. For example, whether people can take out loans. Another factor is the prevailing relationships between employers and employees.

Skip to 2 minutes and 27 secondsFor example, whether the union movement a strong and if franchisees can join a union.

Skip to 2 minutes and 38 secondsThe language that your franchisee will think and operate in may cause ongoing problems if there is no common language. Behaviour codes will need to be followed. For example, dress code. How to meet or receive foreign representatives, how to treat older or younger people, how to greet people, et cetera. Is time a fluid concept, or must you be punctual? It is critical not to offend the other party through ignorance of their social norms. Just because two countries are neighbours, they will not necessarily be culturally similar. This would be important in considering the territory that would be awarded to an area developer or master franchisee. Look at the cultural checklist to see some of the cultural issues to consider.

Skip to 3 minutes and 30 secondsYou're welcome to join the discussion forum, Why does culture matter. Please add your own comments about what happens in your country or in countries that you are familiar with.

The concept of culture

Research and Cultural Considerations

One of the most important factors in making a decision to expand overseas is the culture of the target jurisdiction. In a business context, culture is about how things work in a specific community.

When in a foreign country, a franchisor should try to adapt to, or at least respect, its cultural rules. It is important to maintain a level of cultural humility.

In this video Dr Buchan discusses the many cultural aspects to consider before commencing expansion activity.

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This video is from the free online course:

International Franchise Law: the World is Yours

UNSW Sydney

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