Developing an International Growth Strategy at New York Fries

Developing An International Growth Strategy At New York Fries New York Fries is known for its high quality fries made with real and hand-cut potatoes and fried in a non-hydrogenated, trans fat-free, sunflower oil. Jay Gould, president of The Company and founder is holding a biannual meeting with its franchisees in the next three days. He is planning to discuss about the plan to have international expansion into another countries, such as China, India, and South Korea. However there are many risks and costs to consider, as there have been a number of failures in international expansion at South Korea and Australia. NYF operate mainly from franchise. Franchise owners bought the rights to operate NYF in different locations. NYF will then get upfront fee and monthly royalty, NYF also encourages franchisees to open more stores by giving refunds for the next five stores opened. Currently there are more than 190 NYF stores in six countries, Canada, Hong Kong, Macau, United Arab Emirates, and South Korea, with sales in excess of $64 million (Prashad, 2011). This paper will analyze about the reason why South Korea and Australia market failed; lack of funding, poor business skills, and unable to follow the standard, and furthermore I will touch briefly on the motivation for franchising and what NYF need to do before entering new market in India and China. There are three main reasons why Australia and South Korea failed to meet NYF expectation, which are, lack of funding, poor business skills, and unable to follow company’s standard. One of the biggest mistakes is when Gould underestimates the importance of fund. Often time people make mistake into thinking that having enough money to buy the right to franchise is enough, when in reality it is not. The reason being slow starting growth, competitors and unexpected event might easily drain the costs of franchising. Furthermore, the Australian franchisee did not have enough funds to open at a strategic location where

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