Fast-Food Chain

A leading fast-food chain wants to expand internationally and has engaged EY-Parthenon to assess the opportunity and recommend a market entry strategy. The case is deliberately broad — candidates must impose structure on an open-ended brief, select markets using a disciplined framework, evaluate entry mode options, and address the localisation requirements that make or break QSR international expansion. This case tests both strategic thinking and practical commercial judgment about how global brands succeed in new markets.

About the Client Leading fast-food / quick-service restaurant (QSR) chain — brand recognition is a core asset Established domestic market, with some international presence (ask interviewer for current footprint) Strategic rationale for expansion: domestic market saturation, international growth opportunity, investor pressure for topline growth The client has not specified which markets to enter — this is partly for EY-Parthenon to recommend QSR International Expansion Context The global QSR market is large and growing — driven by urbanisation, rising middle classes, and demand for affordable, convenient food Western QSR brands (McDonald's, KFC, Subway) have successfully globalised using franchise and master franchise models Key success factors: supply chain localisation, menu adaptation, brand positioning calibration, and quality-consistent franchise partnership Key failure modes: misreading local food culture, inadequate franchise oversight, supply chain failures, regulatory barriers Entry Mode Options Company-owned stores: Highest control and margin upside; highest capex, slowest scale. Direct franchise: Faster scale with lower capital; requires heavy quality and compliance oversight. Master franchise / JV: Local partner manages all stores in a territory; fastest scale with best local knowledge; royalty revenue model for the parent; quality control is the key risk.

The client must decide: which international markets to prioritise, how to enter them, and how to adapt the brand and operations for local success. Given that a failed international expansion carries reputational as well as financial costs, EY-Parthenon must provide a rigorous, market selection process — not just a list of 'promising' countries — alongside a credible entry mode and localisation strategy.

Step 1 — Clarify the brief before structuring Ask: Is market selection in scope, or is a specific market already chosen? What is the client's risk appetite (higher-risk emerging markets vs. lower-risk developed markets)? What timeline is the client working to? These determine whether to optimise for growth rate or stability. Step 2 — Apply market selection criteria systematically Do not name countries before scoring them. Build the framework first ('I'd evaluate markets on these 5 dimensions: market size, growth, competition, cultural fit, and ease of doing business'). Then apply the framework, score the shortlist, and select 1–2 priority markets with clear rationale. Step 3 — Recommend master franchise as the default entry mode For most QSR international expansions, master franchise is the optimal model: it scales faster than company-owned, provides better local knowledge than direct franchise, and limits the parent company's capital risk. Recommend it as the default, with company-owned reserved for the highest-strategic-priority markets where control is worth the cost. Step 4 — Structure the recommendation Priority markets: Name 1–2 with scoring rationale Entry mode: Master franchise with 3–5 year exclusivity in the territory Key success factors: Local supply chain setup, menu localisation plan, franchise partner selection criteria Top risks: Franchise partner quality control; cultural misread on menu positioning. Mitigants: rigorous partner selection process; pilot 3–5 outlets before full territorial commitment