Going Global? Different Country, Different Rules!

There have been times in every multi-state operator’s life when they wondered what it would be like if all the states had the same rules and regulations. Whether they knew it or not, they might have been thinking about Australia.

“In Australia, it’s not as hard as the U.S.,” says Adrian Mahendrata, a partner and CEO with Oishii Group. “In Australia, everything is standardized. All states will have the same health regulations. They will have the same tax rates.”

His company, a Pepper Lunch master franchisee, runs 12 locations in Australia spread out from Perth on the west coast to Sydney on the east. Mahendrata and his partner thought Americans would appreciate a new type of Asian food experience, so they crossed the Pacific Ocean with their concept, which originated in Japan.

“We saw an opportunity in the U.S. There was no one else in the U.S. with Pepper Lunch,” he says. “We were given territory in California and Texas. That’s how it all started.”

When opening the first U.S. location in 2018, he was not prepared to find different rules in different states. He later learned that different cities in California also have specialized requirements.

“For Irvine, we had to have an automatic hood system to be on when heat is detected,” he says, “whereas in Alhambra, there is no such rule.”

Even with the additional red tape, the move made sense. Mahendrata has five Pepper Lunch locations in the U.S. and plans to expand further. He says there are two reasons for that. “The first is market size. The whole population of Australia itself is 27 million, whereas California itself is 46 million. Also, the cost of doing business in America is still lower compared with Australia where we have a minimum wage at $30 an hour.”

Mahendrata makes his life easier by outsourcing payroll and bookkeeping, which gives him more time to travel to his stores and train staff in the proper Pepper Lunch way. The difficulties of running a multi-state operation in the U.S. are nothing compared with the rewards.

“Obviously, we want to grow,” he says. “We’re also looking to bring more brands from overseas and introduce them to the American market. We see a lot of opportunity.”

For Mahendrata, international borders and state lines don’t get in the way of good business.