Push and pull factors in international franchising

Purpose: Using munificence, real options and ambidexterity theories, the purpose of this paper is to demonstrate how the differential between home and host market environmental conditions affects US international franchising expansion. Design/methodology/approach: The authors used firm-level panel data for 151 US-based franchising firms, from Bond’s Guide for Franchise Opportunities, for the years 1994-2008 plus macroeconomic data on the environment, to explain the probability of franchising. Findings: The paper finds that the differential in economic growth and economic uncertainty impacts franchisors’ desire to expand abroad on a continual basis. Research limitations/implications: Researchers in international franchising should not only focus on host market environmental variables (pull factors), but also on conditions in the home market (push factors). Originality/value: The paper adds to environmental explanations of international franchising by focusing on the differential in munificence and uncertainty between home and host countries.