Internationalization Modeling: A comparative Analysis of American and Australian Franchise Firms

Abstract

Using an integrated model of international expansion, this study develops separate rankings of 143 potential target countries for United States-based and Australia-based franchise firms. Based on an assessment that takes into account market opportunity, market risks, and distance, the model ranks countries according to their opportunity=risk profiles. The results of the model suggest that Australian franchise firms assign an overwhelming importance to distance in their international expansion activities in actual practice, contradicting their claims that market opportunity is their paramount determinant of international expansion. These results confirm the lack of a strategic approach to international expansion by many franchise firms.