Studies of international franchising are scant, but increasing, and can be divided into two streams of research: those focusing on environmental predictors of internationalization and those focusing on strategic, firm-level characteristics. Examingin the latter category, this study empirically explores a set of firm-level attributes as predictors of decision-making on whether or not firms seek international expansion. using longitudinal data from Bond's Franchise Guide 2001-2000, we draw on a sample of U.S.-based fast-food franchise systems to test our hypotheses. Specifically, out database is comprised of 1,058 observations of 158 chains and we estimate a semi-parametric logistic modlel for international franchising. The model contributes to the literature by being the first to examine the nonlinearity of international franchising determinants using agency theory. The results show that (1) bonding, (2) the percentage of franchised units, (3) the number of states within which the system operates, and (4) the provision of area development agreements and sub-franchising significantly contribute to the international expansion of U.S.-based fast-food franchisors.
This is an Author's Original Manuscript of an article published by Taylor & Francis Group in Journal of Marketing Channels on Oct 30th 2010, available online: http://www.tandfonline.com/10.1080/1046669X.2010.512861
Journal of Marketing Channels