Country dispersion in international franchising: system, proportion, and performance

Abstract

PurposeThe purpose of this paper is to examine whether operating countries influence restaurant franchising system performance and what would be an optimal international franchise proportion.Design/methodology/approachThe authors observed ten publicly traded franchise firms that operated between 1995 and 2015. Data analysis is conducted through a generalized linear model (GLM) of panel data.FindingsThe model confirms a curvilinear U-shaped relationship between international franchise expansion and firm performance, similar to domestic franchising. The authors found that international franchisors have a higher optimal franchise proportion than domestic franchisors. The authors did not find that operating countries influence firm performance.Originality/valueThis study contributes to franchising literature by expanding limited empirical studies on international franchising. It provides practitioners with a new optimal franchise proportion at the international level.