The effect of franchisor characteristics and host country features on the foreign entry mode. Lessons from the Spanish franchise system lessons from the Spanish franchise system
by Verónica Baena
International Journal of Business and Globalisation (IJBG), Vol. 20, No. 4, 2018

Abstract: Franchisors have many options when seeking to expand their business into foreign countries. Specifically, they can enter new markets via one of four different ways: 1) direct franchising; 2) master franchisor; 3) equity joint venture; 4) direct investments. This paper aims to analyse the factors that determine this entry mode decision. To achieve this goal, transaction cost theory is used to explain the entry mode choice phenomenon, by using a franchisor and host country level perspective. Additionally, a quantitative approach was applied to a sample of 43 Spanish chains operating 2,532 outlets across 62 foreign nations. The results show that foreign entry mode choice is driven by franchisor characteristics such as international experience, brand awareness, and industry type (product versus service), in conjunction with host country features including geographical distance, uncertainty avoidance, masculinity, political stability, economic development, unemployment rate and efficiency of contract enforcement.

Online publication date: Mon, 30-Jul-2018

The full text of this article is only available to individual subscribers or to users at subscribing institutions.

Existing subscribers:
Go to Inderscience Online Journals to access the Full Text of this article.

Pay per view:
If you are not a subscriber and you just want to read the full contents of this article, buy online access here.

Complimentary Subscribers, Editors or Members of the Editorial Board of the International Journal of Business and Globalisation (IJBG):
Login with your Inderscience username and password:

    Username:        Password:         

Forgotten your password?

Want to subscribe?
A subscription gives you complete access to all articles in the current issue, as well as to all articles in the previous three years (where applicable). See our Orders page to subscribe.

If you still need assistance, please email