Identification of environmental factors that influence the choice of franchising methods of U.S. restaurant companies in Pan Pacific region

Franchising has become a proven and acceptable method of distributing products and services for both domestic and foreign markets. The pressures on franchisors to search for foreign markets have led to heightened interest in international franchising. According to Franchising in the Economy (1990), restaurants of all types rank number one, followed by business aids and services. Therefore, the restaurant industry leads the domain of business in international franchising.

The primary objective of this study was to develop a model based on experts' opinion for the selection of different franchising methods to be used as a guideline for restaurant companies that plan to franchise internationally. Environmental factors that affect international franchising in the Pan Pacific region are identified. The major methods used in franchising are: 1. direct franchising, 2. master franchise agreements, and 3. joint venture agreements. The recommendation of the most popular franchising methods for Singapore, Korea, Thailand, and Malaysia are studied.