The Internationalization of Spanish Franchising and its Foreign Entry Mode Choices

Foreign entry mode choice is one of the most important decisions global companies should take, given that such a decision constrain the degree of control and risk of the new venture. Regarding the specific characteristics of the franchising system, it is worth mentioning that franchisor companies can enter new markets through four different ways: i) direct franchising, ii) master franchisors iii) joint venture; and finally, direct investment. This paper aims analyzing the factors that constrain the entry mode decision. Empirical evidences show the important role of some franchisor characteristics (franchising experience, international experience, brand awareness and type of activity - product versus service-), as well as different features of the host country (political stability, degree of corruption, cultural distance, and geographical distance).