UNH Ranks Top International Expansion Markets for U.S. Franchises
DURHAM, N.H.—The 10 most attractive foreign expansion markets in 2019 for U.S.-based franchise firms with a balanced growth strategy are Germany, United Kingdom, Canada, Poland, France, Australia, Spain, Ireland, Sweden and South Korea, according to a new ranking by the University of New Hampshire’s Rosenberg International Franchise Center (RIFC) that reviewed 131 countries.
The RIFC International Franchise Attractiveness Index utilizes a quantitative model based on extensive, peer-reviewed research and a survey of more than 100 franchise executives representing franchise companies with more than 165,000 units globally. The model produces two different index rankings—balanced growth and aggressive growth—based on a company's risk tolerance level.
The index is a preliminary selection tool for franchise firms to use when considering international expansion. It can help them, in a systematic and objective way, identify the priority countries to target for franchise expansion out of a very large number of potential markets. Very few firms have the resources to expand to over 130 countries making this index a valuable tool in any international expansion drive.
“Our index offers franchise companies a first step in their internationalization drive with the understanding that additional in-depth, micro-level analysis be undertaken for the identified top priority countries to evaluate key microeconomic variables,” said E. Hachemi Aliouche, director of the RIFC. “These are factors such as the country’s labor force availability and quality, education levels, urbanization, occupancy costs, wage rates, cost of inputs, quality of infrastructure, etc. Potential revenues and profits from each priority country can then be estimated.”
For U.S. firms that are aggressively pursuing international market expansion and willing to take more risks, high market potential would be the more compelling factor. For aggressive firms, the 10 most attractive countries for franchise expansion in 2019 are, in order: China, Germany, Turkey, UK, India, South Korea, Poland, Spain, Malaysia, and Canada.
The RIFC model may also be used as a risk management tool to assess the potential impact of various scenarios (such as a recession, political upheaval, etc.) on a firm’s international expansion decisions and to periodically review a company’s portfolio of international operating units to determine whether their geographic locations are still optimal.
The RIFC is a center of excellence for franchise research, education, and outreach at the Peter T. Paul College of Business and Economics at UNH. To learn more about the center or to view the full list of 131 country rankings for both balanced and aggressive growth, visit unh.edu/rosenbergcenter.
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