Key drivers of overseas expansion of service franchise chains

Abstract

Based on the agency and signaling theories, this paper attempts to identify the effects of management and franchising experience, brand awareness, international franchise ratio, and franchisor’s size on international expansion in the service franchise sector. Specifically, the Spanish franchise system was considered and therefore, a total of 125 chains with presence in 44 foreign countries with a combined 2,944 outlets were examined. The results show that management and franchising experience, together with brand awareness, international franchise ratio, and company size all have a significant impact on the internationalization process in the service franchise companies.