The factors that determine franchising intensity: An analysis in an emerging economy.

This study evaluates the franchising intensity of Mexican franchise chains. Supported by the theory of agency and the theory of signals, the influence of the brand recognition and the pricing strategy on the franchising intensity of the chain was evaluated. The brand recognition was evaluated using four indicators: experience, size, MFA (Mexican Franchise Association) affiliation, and origin. The pricing strategy was evaluated with three indicators: initial investment, entry fee, and royalties. On a sample of the 397 franchise systems operating in Mexico in 2016, the multiple linear regression technique was used to evaluate the influence of the brand recognition and the pricing strategy of the chain on the franchising intensity of the chain. This research confirms that the factors associated with brand recognition and initial investment influence the franchising intensity of the Mexican chains. [ABSTRACT FROM AUTHOR]