Franchising entry and control strategies in difficult and remote business environments: the case of Bulgaria

Abstract

Uses experiences in Bulgaria to exemplify market entry and control strategies employed by franchisors in a business environment that is geographically and culturally remote from the West. Carries out interviews in 1996 with Bulgarian franchisors and franchisees to test a number of hypotheses relating to issues including the type of franchisor, system densities, market entry strategies and monitoring tactics. Identifies 17 environmental factors ‐ cultural, organisational, political and legal ‐ which represent possible areas of conflict between the franchisor and franchisee. Establishes that franchisors adapt to a remote business environment in a variety of ways in respect of both market entry and monitoring strategies ; establishes some significant correlations between different types of franchisors and their strategies. Finds that western franchisors and Bulgarian owned firms often place different emphasis on the relative importance of environmental factors. Observes a broad variation in market entry tactics. Recommends that franchisors need to establish criteria to establish risks in remote business environments and devise appropriate strategies prior to entry.