Factors affecting the decision and the degree of the internationalisation of franchises

Abstract

The franchise concept is present in many countries around the world. However, the franchising systems have different levels of development between countries. The purpose of this paper is to analyse the influence of a series of factors in the internationalisation of Italian franchises. The results show that the only two variables which affect internationalisation are size and sector. On the other hand, the results obtained via the Tobit analysis show that the franchise's degree of internationalisation is determined by the number of franchisees in the domestic market, by the investment which the franchisee has to make to open an establishment, by the time the franchisor has been operating with a franchise formula, and by the sector. This work contributes to having a greater knowledge about the factors which affect internationalisation in franchising, as well as those which influence it once the franchisor has already begun to work abroad. The data of the study are from Italy, where there exist few works on franchising.