Global Analysis: International markets offer opportunities and challenges

By: William Edwards
Published: June 10th, 2025

The global franchise landscape continues to evolve rapidly, presenting opportunities and challenges for brands seeking to expand their franchises into new countries. We know from experience that it takes about the same amount of time, money, and resources to expand into small markets as it does to large ones that have the potential for more units, more sales per unit, and eventually, more royalties paid back to the franchisor. It also takes the same amount of time, money, and resources to expand into the wrong countries for a specific franchise.

Most readers will be aware of GlobalVue, a ranking of countries as places to do business that my company has published quarterly since 2001. It addresses factors that relate to doing business in 40 countries. This chart can be downloaded at https://edwardsglobal.com/globalvue/. This article compares key markets across North America, South America, Asia, Europe, the Middle East, and Africa, providing specific 2025-focused insights into market dynamics, growth potential, and local franchise development for franchise executives to consider in their country expansion planning now.

Foreign vs. local

First, let’s look at the balance between local and foreign franchise brands in a country. In our experience, when a country has 90% or more local franchises, it can be a real uphill battle for foreign brands to break through and succeed. This does not mean avoiding such markets, but it means entering may take longer to reach unit critical mass.

Here’s why: Local franchise brands often have deep roots in the community. They’ve spent years building strong customer relationships and earning solid reputations. People tend to stick with what they know, and local brands typically have a solid understanding of their customers. They’re in tune with the culture and usually offer pricing that makes sense for the local market.

For foreign brands, this presents significant challenges. Adapting products or services to fit the expectations of the local market isn’t always straightforward. Both customers and prospective franchisees may hesitate to embrace a foreign brand, questioning whether it truly fits their lifestyle or meets their needs.

On top of that, governments sometimes stack the deck in favor of local businesses. They might provide incentives or advantages to homegrown brands while making foreign companies jump through additional hoops with strict regulations. It’s like being the new kid in school: You’ve got to work extra hard to fit in and prove your value.

With this background, let’s look at the positives and negatives of key franchise countries in 2025.

North America

Canada

Positives. Moderate economy, culture similar to the U.S. but different, a franchise-friendly market, going through an election in 2025
Obstacles. Regional differences, competition from established players, multiple franchise disclosure requirements by province, low density of major population centers, issues with an ability to find country-wide licensees
Foreign vs. local. Approximately 70% of franchises foreign, heavily influenced by U.S. brands

Mexico

Positives. Improving economy, investors seeking new brands, growing appetite for international brands, franchising well accepted
Obstacles. Security concerns, regional economic disparities
Foreign vs. local. About 45% foreign, especially in urban areas, a good balance between local and foreign

U.S.

Positives. Largest franchise market globally, robust ecosystem, established consumer base
Obstacles. Intense competition, high marketing costs, diverse economic regions, no single country master franchisee
Foreign vs. local. 90% local

South America

Brazil

Positives. Large population, rising middle class
Obstacles. Complex bureaucracy, regional economic fluctuations, difficult entry, foreign payment regulations
Foreign vs. local. 95% local, foreign franchises growing

Chile

Positives. Economy going, more business-friendly environment than nearby countries
Obstacles. Small market size, few major cities, sector saturation
Foreign vs. local. About 25% foreign

Peru

Positives. Slowly reviving economy, demand for international brands
Obstacles. Economic inequalities, underdeveloped infrastructure, unstable government
Foreign vs. local. Around 30% foreign, appreciation for U.S. F&B brands

Europe & United Kingdom

Germany

Positives. Large economy, high consumer trust in local brands
Obstacles. High labor costs, strict employment laws, preference for local brands
Foreign vs. local. About 85% local

Poland

Positives. Growing middle class and E.U. membership, modernization of the economy and laws
Obstacles. Regional economic disparities, challenges finding investment capital for new franchises
Foreign vs. local. About 14% foreign and growing

Spain

Positives. High tourism-driven demand, consumer interest in global brands
Obstacles. Low unemployment, challenges finding good locations for franchise brands
Foreign vs. local. Approximately 22% foreign, very accepting of foreign brands

United Kingdom

Positives. Mature franchise market, strong legal framework without a franchise law or disclosure requirements
Obstacles. Market saturation, slow to make investment decisions
Foreign vs. local. About 90% local, foreign brands well accepted

Asia-Pacific

Australia

Positives. High disposable income, strong legal protections for franchisees
Obstacles. High operational costs, market saturation in some sectors
Foreign vs. local. About 30% foreign

China

Positives. Massive consumer base, growing urbanization
Obstacles. IP protection issues, complex regulations, a reluctance currently to take on new foreign brands due to the economy and government concerns
Foreign vs. local. Around 40% foreign, most growth from local brands

Indonesia

Positives. Large, youthful population, growing economy with substantial middle-class consumer base who like to shop at brands
Obstacles. Increasing regulatory hurdles, local supply sourcing requirements
Foreign vs. local. Approximately 35% foreign

Japan

Positives. High consumer spending, developed infrastructure
Obstacles. High costs especially for real estate, a rapidly aging population
Foreign vs. local. About 25% foreign, open to foreign brands, primarily U.S. brands

New Zealand

Positives. A secure environment for business investments, no franchise regulations or disclosure requirements
Obstacles. Relatively small market, limited scalability of franchises compared to larger countries
Foreign vs. local. About 70% local

Philippines

Positives. English-speaking population, strong consumer demand, prevalence of spending on foreign brands
Obstacles. Limited local partners (investment capital), infrastructure gaps
Foreign vs. local. Roughly 45% foreign, balanced in local vs. foreign franchise brand presence

South Korea

Positives. Tech-savvy population, affluent consumers, several large-population cities
Obstacles. High real estate costs, stiff competition, huge franchise regulatory burden, especially for foreign brands
Foreign vs. local. Approximately 30% foreign, an overabundance of small local franchises favored by consumers

Thailand

Positives. Strong tourism-driven demand, rising incomes
Obstacles. Political instability, complex regulations
Foreign vs. local. Around 40% foreign

Vietnam

Positives. Rapidly expanding economy, a youthful demographic who seem entrepreneurial
Obstacles. High competition, regulatory complexities
Foreign vs. local. About 20% foreign

Middle East & Near East

Egypt

Positives. Large, youthful population, urbanization
Obstacles. Economic instability, challenges finding investors for new franchises
Foreign vs. local. Around 40% foreign

India

Positives. Expanding middle class, vast market potential
Obstacles. Infrastructure challenges, immense cultural diversity, challenges finding franchisees who will follow the foreign brand systems, very price sensitive
Foreign vs. local. About 20% foreign

Saudi Arabia

Positives. High level of new franchise development, high consumer demand
Obstacles. Regulatory challenges, cultural adaptation needs
Foreign vs. local. About 50% foreign

Turkey

Positives. Strategic location, young population
Obstacles. Economic instability, government instability
Foreign vs. local. Foreign franchises growing, challenges succeeding

United Arab Emirates (UAE)

Positives. Hub for international brands, affluent consumer base
Obstacles. High operational costs, almost saturated landscape
Foreign vs. local. Approximately 70% foreign

Bottom Line

By focusing on the positives, obstacles, and the balance between local and foreign franchises, this snapshot helps provide a clearer picture of the diverse franchising landscapes worldwide in 2025. Understanding these dynamics is critical for businesses aiming to succeed in international markets by choosing the right countries to enter for their specific franchise.

William (Bill) Edwards, CFE, is the CEO of Edwards Global Services (EGS) and a global advisor to international businesses. With five decades of experience, Bill has helped more than 40 companies expand internationally. Contact Bill at +1 949 375 1896 or bedwards@edwardsglobal.com.