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E. Hachemi Aliouche

Using a strategic model of international expansion, this chapter develops a ranking of 125 countries based on their attractiveness as expansion markets for international franchise companies for 2015. Based on the premise that business companies view international expansion ventures as investments, a country’s attractiveness is based on its risk/return profile. Following financial investment theory and practice, the most attractive markets are the ones that offer the best trade-offs between market potential and market risks. Market potential is measured by a weighted average of population size, gross domestic product (GDP), and per capita GDP. Market risks include economic, political, legal, regulatory risks as well as cultural and geographic distances. For US-based franchise firms, the Top 10 most attractive countries for franchise expansion in 2015 are Taiwan, Germany, Canada, Sweden, the United Kingdom, Hong Kong, Singapore, Korea, Australia, and Japan. The Bottom 10 least attractive countries in 2015 are all in Africa except for Syria. This chapter highlights the fact that the relative attractiveness of a given country as an international franchise expansion market may evolve over time, sometimes dramatically, as in the cases of Taiwan and Sweden. However, the relative attractiveness of various countries over time is remarkably stable for the most part as nine out of the Top 10 countries were the same in 2011 and again in 2015.