Drivers and Barriers to International Expansion by Australian Franchisors

Abstract

The widespread growth in business format franchising as an international business model is widely reported. This paper reviews the status of international franchising by Australian franchisors. A comprehensive study of the population of Australian franchisors was conducted to examine the motivational incentives and barriers to offshore expansion. In particular, data was gathered on preferred international locations, international franchising strategies and modes of entry, pre-internationalisation activities and factors impeding the overseas expansion. Consistent with previous research, results show that larger and more experienced franchisors seek to grow their organisations through expanding to host countries. Master franchising and joint ventures are preferred modes of entry, and many franchisors locally adapted systems and processes in transferring their business concepts to different cultural and regulatory environments. In opposition to recent research, Australian franchisors placed lesser emphasis on macroeconomic influences upon the decision to internationalise.