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Ilan Alon and David L. McKee

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Maria Jell-Ojobor and Ilan Alon

International franchise firms can be governed by equity and non-equity governance modes. This chapter provides an analysis of the major determinants of master international franchising (as non-equity mode) from international strategy, resource-based and organizational capabilities, and transaction cost and agency perspectives respectively. The conceptual model summarizes the impact of strategic, asset-specific, environmental as well as behavioural factors on the franchisor’s choice of master international franchising. Albeit focusing on master international franchising, the chapter’s propositions may also be applied to franchise expansion with other low control modes. The chapter shows that the right franchise mode choice is a critical task based on multiple determinants which influence the success of the international franchise chains. It may assist franchisors, franchise network partners and policy makers in analysing the conditions of master international franchising in the target country and applying efficient governance modes for successful expansion of the franchise brand into host countries.