Intangible Resources and Plural Form as Drivers of Franchise Internationalization: Examination within a Two‐Country Perspective

Abstract

This study focuses on drivers of franchise network internationalization, namely, intangible resources and plural form. Intangible resources refer to those that the franchisor acquires over time and are deemed instrumental to firm success, namely, brand name, monitoring, and know‐how transfer abilities. Plural form refers to the coexistence of franchised outlets and company‐owned outlets within the same network. The empirical study involves 853 U.S. and rench networks. Findings indicate that the percentage of company‐owned outlets in international networks is lower than that in purely domestic networks, and this holds for both the combined data sample (nited tates and rance) and the U.S. sample on its own. Moreover, U.S. franchisors are shown to be much more internationalized, with a smaller percentage of company‐owned outlets than their rench counterparts. The intangible resource that most strongly affects franchise internationalization is brand‐name recognition, whereas there is partial support for the impact of two other intangible resources, namely, monitoring and know‐how transfer ability. The results of the logistic regression models underscore the importance of intangible resources in franchise network internationalization as well as the significant and negative impact of percentage of company‐owned outlets. Finally, the drivers of internationalization are not found to be statistically different between both countries.

This research was sponsored by France's National Research Agency (references: ANR‐12‐BSH1‐0011‐01 and ANR‐08‐BLAN‐0020‐01). It has also received support from the European Union's 6th Framework Programme for Research and Technological Development through grant CIT3‐513420 and the Spanish R&D program through grant MICINN‐10‐ECO2010‐19421.

This research was sponsored by France's National Research Agency (references: ANR‐12‐BSH1‐0011‐01 and ANR‐08‐BLAN‐0020‐01). It has also received support from the European Union's 6th Framework Programme for Research and Technological Development through grant CIT3‐513420 and the Spanish R&D program through grant MICINN‐10‐ECO2010‐19421.

Notes

This research was sponsored by France's National Research Agency (references: ANR‐12‐BSH1‐0011‐01 and ANR‐08‐BLAN‐0020‐01). It has also received support from the European Union's 6th Framework Programme for Research and Technological Development through grant CIT3‐513420 and the Spanish R&D program through grant MICINN‐10‐ECO2010‐19421.

1. Even firms that are not usually franchisors adopt international franchising (Elango 2007).

2. The rationale for choosing these two countries is further explained in the research design section.

3. This input includes the trade name and the efforts to preserve it. This comprises advertising and monitoring of all the network.

4. The authors note that the relationship observed depends on risk measurement.

5. The dummy industry has not been included in this analysis because it violates the MANOVA routine metric data assumption.

Additional information

Notes on contributors

Rozenn Perrigot

Rozenn Perrigot is Associate Professor at Graduate School of Management (IGR‐IAE), CREM CNRS, University of Rennes 1 and Affiliate Professor at ESC Rennes School of Business.

Begoña López‐fernández

Begoña López‐Fernández is Associate Professor at Facultad de Economía y Empresa, University of Oviedo.

Sevgin Eroglu

Sevgin Eroglu is Associate Professor of Marketing at the Robinson College of Business at Georgia State University.