The internationalization of franchise systems into emerging and transitional economies

Dianne H.B. Welsh and Ilan Alon This chapter answers the urgent call from both the franchise industry and the academic community for research on world franchising markets. It summarizes the main research that has been conducted on international franchising in emerging markets. First, the chapter answers the relevant question of what is an emerging market from a franchisor perspective. The level of economic development that is needed for a franchiser to consider entering a particular country for expansion is explored. Next, economic growth is discussed, along with market governance. The chapter then examines specific, practical franchising research that has been conducted in various parts of the globe. Much of the research that has been conducted thus far in the franchising field is descriptive. In other words, the state of franchising in a particular country is described. This is usual when the field being studied is so new. Initially, the chapter explores the practice and theory development of international franchising that currently exists: comprehensive theory development is sorely needed. The chapter goes on to divide the research into areas of the emerging world market: Central and Eastern Europe, Mexico and South America, China, India other Asian countries and other areas of promise that include Kuwait and South Africa. Specific cases of franchises that have entered these markets and their experiences are given. The chapter concludes by discussing the next step: to develop a research base and understanding of emerging markets in addition to the opportunities and challenges for franchising.