How to reinvent franchising with tech and transparency

We now receive requests for our franchise from all over the world—from Germany and Nigeria, Canada and Australia, Switzerland and the UAE….

These emails prove to us that people from different countries have started to see the same value in what we’re building (our cutting-edge IT system, up-to-date branding, and agile business culture based on radical transparency).

The question is: what should we do with these requests? The Dodo Pizza brand is already present in 10 countries, from the United States and China to Lithuania and Romania. And to an outsider, our choice of countries may look completely arbitrary.

Following our basic principle of utmost transparency, I’ve written this post to explain our current approach to processing new requests for our franchise for new regions.

Global strategy for a franchise: top-down or bottom-up

Many franchise chains go top-down in their global strategies. They gather data, analyze it, and pick countries that they think hold the most potential. Then they focus their efforts on these countries while ignoring opportunities in other places.

That’s not such a bad approach, but we at Dodo Pizza go bottom-up. We start with people and then figure out a way for our brand to be successful in the region where these people come from.

We do it this way because Dodo Pizza is many things, but most importantly, it’s a community of entrepreneurs. So we are of the opinion that true entrepreneurial spirit trumps everything—knowledge, skills, connections, even any level of competition.

Our partners made Dodo Pizza the leader of the Russian market in just five years. So we believe that in order to replicate this success in other countries, we must find people of the same caliber all over the world.

Key factors we have to take into account

At the same time, there are some other factors that we have to consider when making a decision about international markets.

1. The capacity of our IT team to prepare our IT system for a new market (it takes time to set everything up, even if we don’t need to translate the interface).
2. The availability of our marketing team that has to study the competition, adjust our business model, and adapt our menu, pricing, and marketing strategy.
3. Finally, we have to weigh how different the market is from the markets we already have experience with—and how much struggle we will have with cultural and language differences.

What makes the situation even messier is that the first two factors are constantly changing (despite having more than $160 mln in system-wide 12-month sales, we are still a startup that reinvents itself every other day).

3 key steps to a partnership: a form, a call, and a tour

Lately, we’ve been racking our brains about what would be the best approach for our global growth considering all the factors we see at play. Finally, we’ve come up with a simple workflow.

When we receive a request for a franchise in a country where we aren’t selling our franchise yet, first we say that we can’t make any commitments at this moment since we have to carefully pace our growth.

So, if you want to open a pizza shop right away, Dodo Pizza isn’t your best option. But if you entertain a long-term interest in our brand, let’s talk.

Then we ask any prospective franchisee to fill in a simple form. We want to know some basic info: who you are, what background you have, where you want to start a pizza business, and why you have come to us.

If we see a good fit for our brand, we reach out and arrange a call. Then, if this goes well, we invite our prospective partner to Moscow to visit our pizzerias and meet with the team—or (less preferably) at least meet with our top managers in Europe or the US.

After all these steps have been taken, we can come to a mutual agreement on the next steps to a new partnership.

When the decision about a certain country has been made, we’re going to reach out to all of the prospective partners who filled in the form and showed interest in this region.

What we look for in our prospective partners

If you’re thinking of opening a Dodo Pizza shop, you might ask: what is “a good fit” for Dodo? There are five factors we pay attention to.

1. Do you know the country and speak the language? We provide our IT system, branding, and expertise in the pizza business, but it’s you who has to bring deep understanding of the culture to the table.  
2. Have you any relevant experience in building a business? The best case would be to have some background in our market or in retail in general.
3. Are you ready to focus on this business personally? Some people want to invest and find “a guy” who will run things for them. These “guys” rarely succeed.
4. This is probably the most important question: how is your system of beliefs aligned with our values? If you have followed this blog for a while, you should know that among the most important of our values are transparency and openness, a win-win approach to partnerships, long-term thinking, a hard-working but agile and friendly corporate culture, and the philosophy of continuous improvement. And yes, we’re ambitious and hell-bent on providing the best product on the market. “Growth you can be proud of” is an unofficial motto at Dodo Pizza.
5. By the way, do you have the money?

If you recognized yourself while reading this paragraph, you might want to reach out to us. Drop Anton Deryagin a letter a.deryagin@dodopizza.com.