How One Burger Chain Profits From Turmoil Abroad

By Karen E. Klein, Businessweek.com

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Photograph by Rizwan Tabassum/AFP via Getty Images A Fatburger outlet in Karachi, Pakistan

Political protests, disease outbreaks, terrorist campaigns—U.S. business owners considering expanding internationally would be forgiven for deciding to stay at home. But name a tumultuous spot abroad—Hong Kong, Iraq, Egypt—and Andy Wiederhorn has probably opened a burger shop there in the past seven years.

Wiederhorn has taken his Los Angeles-based franchise, Fatburger, from a struggling also-ran to a $125 million company by opening in 32 countries since 2007. He has 200 international locations now and an additional 350 in development, including in places rocked by unrest, such as Tunisia and Libya. Despite the advances of Islamic State, a second store in Iraq is also in the works.

“Consumers all over the world love American brands, especially burgers, shakes, and fries,” he says. Facing increasing competition from other specialty burger brands at home, “I knew there was a huge opportunity for us overseas,” he says. Wiederhorn began Fatburger’s global expansion after serving a stint in prison a decade ago, having pleaded guilty to charges related to paying an illegal gratuity and filing a false tax return in a financial scandal at his previous company.

STORY: After Collapsing at Home, Quiznos Sees a Big Future Overseas

Fatburger is unusual in its adventures abroad: Less than 1 percent of America’s 30 million companies regularly export, according to the U.S. Commercial Service, a percentage that’s significantly lower than in all other developed countries. And of the American businesses that do export, most sell to just one other country. That’s a major missed opportunity, considering that more than 70 percent of the world’s purchasing power is located outside the U.S.

So how do small and midsize companies venture beyond their own backyards and into parts of the world that may be challenging?  

[ A great place to start is with a Fluent In Foreign Company Profiles, that feature Fi3F indices™ rating attractiveness of 180 markets for franchisors seeking to expand.  ] 

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