E15: International Franchise Expansion! With Victor Turcanu

Hosts: Michael Hyam and Liane Caruso  
Guests: Victor Turcanu of Spadea Lignana

On episode 15 of the LFG Podcast, Victor Turcanu, an international franchise and M&A lawyer, shared his insights into the nuances of international franchise expansion. 

Victor’s perspective shed light on essential factors that can make or break a franchise’s journey into new markets. Here’s a breakdown of the key takeaways for franchisors aiming for international growth.

Podcast Summary: International Franchise Expansion Insights From Victor Turcanu

KEY TOPICS DISCUSSED

Timing is Everything: Are You Ready for International Expansion?

One of Victor’s primary messages was clear: timing is critical for successful franchise expansion. 

Many brands rush to expand internationally, attracted by the promise of new markets. However, they often do so without fully maximizing their domestic potential. 

For example, a franchisor with hundreds of locations might still have untapped opportunities within its home country that should be explored first.

Companies should consider the following before deciding to expand:

• Local Market Saturation: Have you maximized the growth potential within your existing market?
• Resource Allocation: Do you have the resources to support international operations without stretching your team too thin?

Expanding too early can lead to issues on both domestic and international fronts, which is why it’s crucial for brands to stabilize their home operations and market share first.

Success in New Markets Requires More Than Legal Compliance

A common misconception among franchisors is that expanding internationally is as simple as replicating their business model in a new country. 

Victor points out that, while legal documents can be adapted by working with local counsel, successful international franchising requires much more. Each market has its own unique set of cultural, economic, and operational requirements that demand attention.

For example, what works in the U.S. may not translate seamlessly in Canada, despite the cultural and geographic proximity. 

Victor suggests that franchisors must do more than “copy and paste” their business model; they must understand and align with the local consumer’s expectations and regulatory requirements.

Market Research is a Must For International Franchise Expansion

Victor emphasizes that market research is not optional—it’s essential for understanding local tastes, cultural expectations, and consumer behavior. Victor’s advice is clear: take the time to invest in comprehensive market research before committing to a new location. 

This means understanding how products and services need to be adapted to resonate with local customers, assessing competition, and considering local economic conditions. By doing so, franchisors can avoid costly missteps and better position themselves for long-term success.

Plan for Strategic Operational Adjustments

While expanding internationally, franchisors must consider how the operational aspects of their business will change. 

From tax structures to real estate requirements, there are many logistical factors to address when entering a new country. Victor highlights several operational areas that require strategic adjustments:

• Real Estate Strategy: Understand the local real estate landscape and how it impacts location choice and costs.
• Tax and Revenue Repatriation: Consider how to handle revenue in a way that is tax-efficient while complying with both local and domestic regulations.
• Product and Branding Adaptation: Adjust your offerings to meet local tastes without losing the brand’s essence.

Planning for these adjustments enables franchisors to support their new international franchisees effectively and maintain consistency in brand experience.

Listen to the full episode now to hear more from Victor and the LFG Podcast team!