Exploring the process of Malaysian franchisors’ expansion into international market.

Over the last few decades, franchising has become a well-known platform for business expansion, and a strategy employed by many franchisors to expand their business into international market. Existing literatures only focus on Western and developed countries’ perspectives, and utilise theories like Agency Theory, Resources Scarcity Theory and Transaction Cost Theory. Hence, the expansion process of Malaysian franchisors into international market, especially those in developing countries are still unclearly understood. Additionally, Malaysian studies on Malaysian franchisors are still inadequate, particularly on the specific model of franchisors’ expansion into international market. Therefore, an understanding of the expansion process of Malaysian franchisors into international market is important. Thus, this study aims to identify the process of Malaysian franchisors’ expansion into international market, the fostering factors, as well as the barriers encountered by them during the expansion process. To achieve these objectives, grounded theory is used for the data collection and analysis, since it is more structured, inductive, and able to address the emerging theories from new perspectives. Participants of the study were Malaysian franchisor key personnel who are successful in the international market. The data were collected from 13 semi-structured interviews and were analysed using open, axial, and selective coding. The findings show that the value proposition, and government assistance are new fostering factors that emerged from the grounded data. Additionally, this study also found new barriers when the Malaysian franchisors expand into international market - the supply chain and the confronted global competition. Importantly, this study proposes a new model of international expansion by integrating other theories that can explain the context of this study, namely the Agency Theory, Resource Scarcity Theory, Resource Based View Theory, Transaction Cost Theory, Theory of the Firm, Network Theory, Value Creation Theory, Institutional Theory, Partnership Theory and Resource Dependency Theory. The process of international expansion model is comprised of three levels of process, namely pre-expansion, expansion, and post-expansion. The findings are also expected to assist the government, the agencies involved with franchising, and the Malaysian franchisors in Malaysia in improving international expansion policies, strategies, and programmes. In brief, this study contributes to the formation of a comprehensive process model by integrating several theories in the field of franchising and international business. In practice, this study contributes to the understanding of the expansion process to franchisors who wish or intend to expand into the international market, and also to the government to provide more initiatives. The implications and limitations of the study are reviewed, and some suggestions for future research are also presented.