How Franchising Companies Benefit While Trading in Foreign Countries

The purpose of this study has been to try to discover the benefits that accrue to franchising firms because of their international franchising operations in foreign markets. Franchising has been thought of in terms of being a method for business expansion, especially in retailing, in which the risks arising out of expansion into new territories can be better shared and the capital needed can be reduced as a result of contributions that are made by franchisees. International franchising has the potential for reducing the capital required and the risks associated with expansion into foreign markets, despite added problems associated with intellectual property and long supply chains. It was found that international market expansion through franchising can provide several benefits to franchisors, but only the best are likely to be accepted and the increasing costs of energy for transport is likely to introduce some new paradigms into the international franchising equation.