International Review of Business Research Papers Vol. 7. No. 1. January 2011. Pp. 1 – 15 The Determinant Factors of Successful Franchise Business in Malaysia Mohd Amy Azhar Mohd Harif*, Chee Hee Hoe**, Zolkafli Hussin***, Filzah Mohd Isa**** Siti Norezam Othman***** and Mohd Salleh Din****** 1 This paper presents the findings of a study in identifying the critical success factors of Bumiputra and non-Bumiputra franchisors in conducting their franchise business in Malaysia. The cross case study approach was used to analyse the data. Thirteen franchisors (six Bumiputra and seven non-Bumiputra) were selected as the sample cases. There were two important variables which had been identified as very critical to the success of local franchise business namely, marketing orientation factors and entrepreneurial based factors. The Bumiputra franchisors highlighted competition as their main business market orientation factor, while non-Bumiputra franchisors scored high for customer orientation in the product dominant sector. Franchisors from both ethnic groups demonstrated high entrepreneurial based factors. For the service dominant sector, the non Bumiputra franchisors emphasized on customer and competition orientation, whereas, the Bumiputra franchisors stressed more on customer and interfunctional coordination. However, the Bumiputra franchisors scored moderate achievement motivation and low risk taking as well as innovation. The non Bumiputra franchisors scored high in the entrepreneurial based factors. Field of Research: Franchising and Entrepreneurship, Developing economies 1. Introduction 1.1 Performance of the Franchisors in Malaysia The Malaysian government is strongly committed and actively promoting franchising as one of the strategies in developing local entrepreneurs, especially among the Malay community. In Malaysia, there are three main ethnic groups, the Chinese, Indian and Malay. The Malay and Indigenous people in Sabah and Sarawak are *Mohd Amy Azhar Mohd Harif , College of Business, Universiti Utara Malaysia (UUM) E-mail:amyazhar@uum.edu.my **Chee Hee Hoe, College of Business, Universiti Utara Malaysia (UUM) E-mail: chhoe@uum.edu.my ***Zolkafli Hussin, College of Business, Universiti Utara Malaysia (UUM) E-mail: zolkafli@uum.edu.my ,College of Business, Universiti Utara Malaysia (UUM) ****Filzah Mohd Isa, E-mail: filzah@uum.edu.my ***** Siti Norezam Othman, College of Business, Universiti Utara Malaysia (UUM) E-mail: norezam@uum.edu.my ******Mohd Salleh Din, College of Business, Universiti Utara Malaysia (UUM) E-mail: salleh@uum.edu.my