Are Franchisors with International Operations Different from Those Who Are Domestic Market Oriented?*

Abstract

This study compares franchisors with international operations with franchisors who are domestic market oriented. Using the existing literature, the author develops various hypotheses and tests them on a sample of 420 franchisors. Findings indicate that franchisors seek international markets after they have saturated domestic markets. Monitoring experience of a franchisor is positively related to the likelihood that a franchisor operates internationally. No differences in franchisee fee were found between franchisors who operate in domestic markets exclusively and those with international operations. Franchisors with international operations have lower royalty rates compared with those that do not.