FRANCHISING AS A METHOD OF BUSINESS INTERNATIONALIZATION

Abstract

In the conditions of globalization and internationalization of world economies, the development of franchise businesses in the world is one of the most progressive. International franchising as one of the forms of business is developing quite dynamically today, as a franchise is a more straightforward way for enterprises to enter global markets and does not require significant investment resources to start a business. For a country on the territory of which franchise business is developing, this means the attraction of direct foreign investments, which satisfy the needs of enterprises with limited resources and allow them to improve the quality characteristics of their products and generally increase the country's competitiveness. Most research on franchising in international trade focuses on companies that first tested their concept in the domestic market. These studies have shown that franchisors are reluctant to modify their franchise package, already developed in their own country, to operate abroad. It was also noted that a significant contributor to franchise internationalization is prior foreign presence through other forms of internationalization. In the article, the authors outline franchising as a strategy for business expansion in the international space and organizational factors of internationalization through franchising. An analysis of the scope and trends of franchising in introducing international business was carried out. Internationalization strategies through franchising are defined. Internationalization errors of individual networks were analyzed. Most research on franchising in international trade focuses on companies that first tested their concept in the domestic market. These studies have shown that franchisors are reluctant to modify their franchise package, already developed in their own country, to operate abroad. It was also noted that a significant contributor to franchise internationalization is prior foreign presence through other forms of internationalization. Thus, the most challenging form of internationalization is entering foreign markets without experience operating a franchise network.