What is franchising in market entry strategy?

Franchising involves an organization (called a franchisor) granting the right to use its brand name, products, and processes to other organizations (known as franchisees) in exchange for an upfront payment (a franchise fee) and a percentage of franchisees’ revenues (a royalty fee).

Which company use franchising mode of entry to foreign markets?

Subway is a company that has spread worldwide through its expansion strategy. This strategy is based on franchising, the market entry mode, Subway used in order to enter foreign markets. In 1974 the company started franchising in the USA and later it was uses in order to expand globally.

What is the best mode of entry into international franchising?

Exporting is a typically the easiest way to enter an international market, and therefore most firms begin their international expansion using this model of entry. Exporting is the sale of products and services in foreign countries that are sourced from the home country.

What are the four market entry strategies?

Here are some main routes in.

• Structured exporting. The default form of market entry.
• Licensing and franchising. Licensing is giving legal rights to in-market parties to use your company’s name and other intellectual property.
• Direct investment.
• Buying a business.

What are good market entry strategies?

The most common market entry strategies are outlined below.

• Exporting. Exporting means sending goods produced in one country to sell them in another country.
• Licensing/Franchising. Holiday Inn, London.
• Joint Ventures.
• Direct Investment.
• U.S. Commercial Centers.
• Trade Intermediaries.

What is the best market entry strategy?

Franchising: One of the most prevalent market entry strategies that is gaining popularity across the world is franchising. Franchising works well for organizations that have a trustworthy business model like McDonald’s fast food chain or Starbucks instant coffee.

Which is an example of franchising in foreign markets?

Companies like Subway, 7-Eleven, Pizza Hut, and McDonalds have over the years been very successful using franchising as their foreign market entry mode. Subway, for instance, was established in 1965 in the United States; using franchising as a foreign market entry strategy it has expanded to have over 42,000 stores in 107 countries.

How does franchising as a mode of entry influence expansion?

To conclude the term paper, the theory and the practical example is summarized in order to outline whether Subway enters new markets efficiently and how franchising as a market entry mode influences the expansion of the company against the backdrop of the example.

When to choose an international market entry strategy?

If your business is considering entering a new international market, then your choice of market entry strategy is of crucial strategic importance as this will affect your entire marketing and business planning process. There are a number of ways to enter a foreign market. Broadly speaking, they consist of:

How to enter into a new foreign market?

to Enter a New Foreign Market #1 – Franchising your brand #2 – Direct Exporting #3 – Partnering up #4 – Joint Ventures #5 – Just buying a company #6 – Turnkey solutions or products #7 – Piggyback #8 – Licensing