INTERNATIONAL EXPANSION THROUGH FRANCHISING: AN ECONOMIC PERSPECTIVE

Authors

  • Umida Sharipova,Odil Jumanov Candidate of Economic Sciences, Associate Professor Institution : University of World Economy and Diplomacy

DOI:

https://doi.org/10.55640/

Keywords:

International franchising; economic drivers; resource scarcity theory; agency theory; transaction cost economics; institutional theory; global expansion; capital efficiency; risk sharing; brand recognition; local adaptation; franchisee incentives; cultural challenges; legal frameworks; market entry strategies; McDonald’s case; KFC case; emerging markets; globalization of business.

Abstract

International franchising has become a prominent strategy for firms seeking global growth, offering a rapid path to scale with limited capital investment. This article analyzes the key economic drivers that make franchising an attractive mode of international expansion and examines the benefits franchisors reap, such as accelerated growth, risk sharing, and efficiency gains. It also discusses the economic challenges and risks franchises face abroad, including cultural and regulatory hurdles, reduced control, and financial vulnerabilities. Drawing on relevant economic theories – notably resource scarcity and agency theory – and using real-world case studies, the analysis highlights how franchising enables firms to leverage local entrepreneurship while expanding globally. The article is structured in a scholarly format with a review of literature and theory, a discussion of drivers and challenges, case examples, and a conclusion. The findings underscore that while international franchising can deliver significant economic advantages in scaling and market entry, success depends on careful management of risks and alignment of incentives across borders.

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References

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15.Franchise Association of South Africa (FASA) (2020). Franchising in Africa – Statistics. [Report]. (Alluded to in text for African franchising benefitsmichbar.org).

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Published

2025-08-30

Issue

Vol. 4 No. 7 (2025): Journal of Multidisciplinary Sciences and Innovations

Section

Articles

License

Creative Commons License

This work is licensed under a Creative Commons Attribution 4.0 International License.

Authors retain the copyright of their manuscripts, and all Open Access articles are disseminated under the terms of the Creative Commons Attribution License 4.0 (CC-BY), which licenses unrestricted use, distribution, and reproduction in any medium, provided that the original work is appropriately cited. The use of general descriptive names, trade names, trademarks, and so forth in this publication, even if not specifically identified, does not imply that these names are not protected by the relevant laws and regulations.

How to Cite

INTERNATIONAL EXPANSION THROUGH FRANCHISING: AN ECONOMIC PERSPECTIVE. (2025). Journal of Multidisciplinary Sciences and Innovations, 4(7), 584-592. https://doi.org/10.55640/

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