An Empirical study on-Franchising: A Smart Business Solution in India

Abstract

The paper presents a comprehensive exploration of franchising, examining its historical evolution, theoretical foundations, and contemporary trends across the globe, with a specific focus on the Indian market. The study employs a descriptive research design and utilizes primary data collected through a questionnaire distributed among respondents in Bengaluru. The paper begins by defining franchising as a contractual relationship between a franchisor and a franchisee, emphasizing its role in business expansion through brand licensing and method sharing. It categorizes various types of franchises and highlights the advantages enjoyed by both franchisors and franchisees. The global landscape of franchising is analyzed, featuring insights from Australia, Brazil, Russia, and New Zealand, providing a comparative perspective on the prevalence and regulations of franchising in these countries. In the context of India, the paper outlines the significant growth and popularity of franchising across diverse sectors, acknowledging the regulatory evolution in the absence of specific franchise laws. The literature review section delves into the historical and theoretical aspects of franchising, covering resource acquisition theory, agency theory, transaction cost analysis, signaling theory, and property rights theory. The primary data analysis, based on a sample of 100 respondents, offers valuable insights into the demographic characteristics, attitudes, and preferences of individuals in Bengaluru concerning franchising. Findings suggest a mixed attitude, with a considerable interest in franchising, especially among those prepared to make smaller investments. The study concludes with recommendations, including targeted franchise education, enhanced marketing efforts, support for small investments, and diversification of franchise offerings, offering practical insights for potential franchisors and franchisees.