Geographical distance, cultural differences and digitalization

This study examines the impact of geographical distance,cultural differences, and digitalization on the internationalization ofCroatian franchise businesses, incorporating a thorough analysis basedon the 2022 Global Market Potential Index. Covering 97 countries, theresearch specifically focuses on 22 European Union nations, which areevaluated for their potential to expand franchising operations. Theanalysis delves into various dimensions, including market potentials,geographical proximity, and the degree of digitalization, withparticular emphasis on access to digital public services.Notable findings highlight those countries like Ireland, Germany,Switzerland, and the Netherlands, with their robust market sizes,significant trade volumes, and high economic growth, rank amongthe top ten on the global index. This underscores the substantialimpact of the European market on the franchising internationalizationprocesses, with ten EU countries featuring prominently among the toptwenty positions.The study also discusses the positioning of Germany, Ireland, andBelgium at the top of the list, contrasting with countries such asBulgaria, Greece, and Latvia, which exhibit lower potential forfranchising expansion. The proximity of markets like Serbia, Bosniaand Herzegovina, and North Macedonia is recognized; however,these countries are not extensively analyzed due to their geographicalcloseness and presumed familiarity to Croatian entrepreneurs, whichposes fewer challenges in market expansion decisions.To facilitate informed decision-making in the internationalizationprocess, this paper extends the analysis to include cultural factors,geographical distances, and the level of digitalization in target markets.