Franchise Model Research Articles

Children’s supplementary education: Transforming the franchise business model

Franchises of all industries of the Russian franchise market have been affected by the COVID-19 pandemic, but they suffered from the crisis in different ways depending on the type of activity. In the last few years, children's supplementary education has been one of the fastest-growing and promising spheres in the Russian franchise market. The author addresses the problems of transformation of the children's education franchise model caused by the coronavirus pandemic and the subsequent economic crisis.The methodological framework embraces the concepts of business model and commercial concession (franchising).The research methods used in the study are generalization, analysis and synthesis. Based on the Business Model Canvas by Osterwalder and Pigneur, we develop own template for the franchise business model. We conducted a survey and in-depth interviews with franchisors of children's supplementary education asking the questions covering all the structural blocks of the business model. As shown in the paper, the new economic reality resulted in significant changes in the key elements of the model. The author proposes a visualization scheme of franchise relationships within the business model template. The results are of interest to franchising researchers, as well as market players when formulating a franchise strategy and making decisions to invest in a franchise.

Commentary for Unjani clinics: meeting the need for scale through social franchising

This commentary reflects on the social franchising model of Unjani. It discusses the intricate interwoven elements of the model which allows it to flourish. Here, I take a stewardship and social capital view to elaborate on these mechanisms. In the second part of the commentary, I highlight the limitations of the model specifically as it pertains to its potential growth.

Scaling social franchises: lessons learned from Farm Shop

BackgroundThe challenge of enhancing food security and livelihoods for smallholder farmers has been a significant concern in the agricultural development field. To increase farm productivity and enable smallholder farmers to rise out of poverty, several organizations have initiated social franchising business models to create sustainable social enterprises. Social franchising has recently gathered increased interest in lower-income countries for its potential to address social and ecological issues, support local entrepreneurs, and reach financial sustainability to allow for scaling through market forces. Social franchising combines the principles of business franchising (standardized systems and other supports that reduce risk for the entrepreneur) with a social mission. To gain deeper insights into the opportunities and challenges for scaling social franchises, we gathered quantitative and qualitative longitudinal data on Farm Shop, a social franchise with a network of 74 agricultural input shops seeking to reduce food security through improving productivity, incomes and food security of smallholder Kenyan farmers.ResultsWe derived five critical lessons from our findings. First, social franchising can create jobs and profitability for farmers and strengthens the rural entrepreneurial ecosystem. Second, economics of scale is critical for profitability and sustainability of the social franchisor. Third, building trust with farmers is crucial for a successful social franchising model. Fourth, social franchisors should be aware of the variety of options to ensure the sustainability of the social franchising program. Fifth, to develop a scalable business model, cost-effectively gathering the right data to validate key assumptions is essential.ConclusionsFarm Shop is one of a cohort of pioneering social franchises that have applied the principles of franchising to address particular social needs. In this case, the needs were food security, livelihoods, and prosperity for smallholder farmers. Farm Shop uncovered important lessons relevant for all social franchises at similar stages in the business model development process. With these lessons in mind, Farm Shop and other social franchises can be better equipped to live up to social franchising’s promise of achieving social objectives in a more resource-efficient and sustainable way.

Scaling considerations for the social franchising model

Scaling considerations for the social franchising model

The choice of master international franchising – A modified transaction cost model

This study develops and tests a novel transaction cost model of master international franchising. Based on data from international franchise firms headquartered in six countries, we show that master international franchising is the franchisor’s preferred governance mode under the following conditions: large bilateral franchisor’s and franchisees’ transaction-specific investments, high institutional uncertainty and high behavioral uncertainty. Our model extends the literature by presenting a modified transaction cost model of master international franchising that investigates the bonding effect of bilateral transaction-specific investments and environmental uncertainty as determinants of the franchisor’s choice of international governance mode. In addition, by using primary data from international franchise companies, our study contributes to the transaction cost literature in international business and international franchising that is mainly based on secondary data.

A SPECIAL REPORT ON: Franchising

With franchising growing in popularity in the early years, Nicole Weinstein discovers what the appeal is of both the traditional franchise model and newer versions of it

How might the \u2018Icelandic model\u2019 for preventing substance use among young people be developed and adapted for use in Scotland? Utilising the consolidated framework for implementation research in a qualitative exploratory study

BackgroundSubstance use among young people is a significant public health concern, particularly in Scotland. Primary prevention activities are essential in delaying young people’s substance use and reducing the harms associated with use. However, such prevention activities are generally lacking. The Icelandic Model (IM) has received increasing attention and has been associated with improvements in substance use in Iceland since the 1990s. There is interest in implementing the IM in Scotland but concerns regarding transferability. This research study aimed to address a gap in the evidence base by providing insight into stakeholders’ views of the IM in Dundee and more widely in Scotland.MethodsQualitative data were collected via semi-structured telephone interviews with 16 stakeholders. Data were analysed using Framework Analysis in NVivo, informed by the Consolidated Framework for Implementation Research.ResultsParticipants were keen for more prevention activities to be delivered in Scotland and were generally supportive of the IM, given the high rates of substance use and related harm. A range of positive factors were identified, including the evidence base, the multi-component nature of the IM, and availability of current services that could be embedded into delivery. Several barriers were noted, relating to funding, the franchise model, support and buy-in and cultural differences.ConclusionsOur findings provide insight into the views of a range of stakeholders regarding the potential implementation of the IM in Scotland, and perceived barriers and facilitators. There is a desire for primary prevention activities in Scotland, driven by concerns about high rates of substance use and related harms, and a general lack of effective and evidence based prevention activities across the country. Several key barriers would need to be addressed in order for implementation to be successful, and participants were clear that initial piloting is required. Future research and evaluation is required to examine its potential and the outcomes of the approach in Scotland.

Unveiling benefits through franchising in Indian power distribution: addressing the resources scarcity

PurposeThe Indian power distribution companies are increasingly recognizing franchising for reviving their high loss-making rural pockets. The motivation for franchising has been a reduction of the franchisor's resource scarcity by bringing in operational efficiency and improved service quality to end consumers. However, there is a dearth of evidence on the influence of the franchisee's operations in addressing the resource scarcity of franchisors in predominantly rural areas. This study contributes towards filling the research gap.Design/methodology/approachA qualitative embedded multiple case study was conducted. The cases comprised two rural franchisees operating towards attaining the common goal. The study was built on archival analysis, personal observations and semi-structured interviews with the franchisors and franchisee officials across the organization's hierarchical levels. A conceptual model based on the review of prior literature formed the initial set of coding for the study. The data were presented based on within-case and across-case analysis.FindingsThe analysis revealed that the contract design impacts the requisite operational efficiency achievement. This variation could be elaborated by factors, such as system adaptation across organizational hierarchy, autonomy and independence, review and feedback systems, monitoring, a professional's attitude, bureaucracy, adaption with the local areas, risk sharing, incentives and compensation structure.Research limitations/implicationsThe study findings could be generalized to the extent of similar socio-economic conditions, prevailing governance mechanisms and law and orders. Additionally, since the law does not mandate the regulatory commissions to scrutinize the performance of the franchisees, the study was built on data shared by the franchisees and the discom. Further, this study considered the performance of only two performing franchisees. Matching these actualities with the discoveries of this study remains a continuing project as participation of private players is increasingly being recognized. Therefore, the insights drawn from this study could be used to improve the franchise model and can be scaled up across the nation, regions and sectors.Originality/valueThere is a dearth of literature on franchising in electricity distribution. This study is one of the first studies on studying the franchise system in the electricity distribution sector through the application of a well-accepted management theory.

Internet companies’ cultural entrepreneurialism and policy interactions in China: Tencent’s case of “Neo-Culture Creativity” strategy

This article studies interactions between Internet companies and the Chinese government within the cultural policy niche through a case study of Tencent’s “Neo-Culture Creativity” strategy. By empirically investigating the correlations between Tencent’s business actions and Chinese cultural policy changes during 2011–2019, and further disclosing their causality via a within-case process tracing, our findings are threefold. Firstly, around an “IP” idea and a content franchise model, Tencent has joined the policymaking process by providing problem solutions and exerting public pressure to influence the agenda setting of intellectual property rights protection. Secondly, Tencent has effectively adhered to the country’s calls of rejuvenating traditional Chinese culture and improving its international competitiveness to some extent. Thirdly, responding to China’s post-socialist sovereignty, Tencent has collaborated and compromised with the government on issues surrounding digital cultural governance by both precautions and remedies. Hence there are implications for Chinese cultural companies to interact with government policies.

BRAZILIAN FRANCHISE STARTUPS AND THE COVID-19 CRISIS: ORGANIZATIONAL STRUCTURE AND ADAPTION CAPABILITIES

Purpose – The purpose of this study is to understand how franchise startups have been facing the crisis caused by COVID-19, with greater emphasis on the effects of the franchising decision on the survival of this type of business during the crisis period.
 Design/methodology/approach – This is a qualitative research, conducted through multiple-case studies on four Brazilian startups that operate through franchised units. Data were collected through online interviews with founders and managers of the franchisee, complemented with information obtained from the companies' websites/social media and articles published in business magazines. The technique of content analysis was used.
 Findings – We found that franchise startups can operate through conventional franchises or micro-franchises. In both cases, we found no reduction in the agility or flexibility of these businesses. Thus, within a crisis context, resilience allows the franchisor to gain greater advantages from its franchisees, if it opts for the conventional franchise model.
 Originality – This research addresses the intersection between two business models: startups and franchises. It contributes to the understanding of both areas, as well as the effects of a business model in a crisis context.
 Limitations/implications – This is a study conducted with a small number of cases within a similar context. The main implications of this research are the formulation of a set of propositions about the startup franchising process and the effects of a crisis for companies that adopt this operating model, and a descriptive diagram of this process.

A methodology to develop a regional franchising strategy

Subject. This article discusses the strategy-related patterns concerning the development of the franchising system as an effective tool for business development. Objectives. The article aims to organize approaches to the evaluation of regional brands and trademarks promising for development under the franchise model, and develop a regional franchising strategy. Methods. For the study, I used analysis and synthesis, logical and systems approaches, and the theoretical generalization method. Results. The article offers an original rating of the subjects of the Russian Federation promising for the development and implementation of franchise offers, and a pattern of the company's development strategy based on the model of franchising. Conclusions. For the franchise network to be successful, it is necessary to carefully develop a strategy for regional franchising development.

Influence of Project Appraisal Approaches on Project Performance A Case of Franchise Model Project at Jibu Rwanda

Influence of Project Appraisal Approaches on Project Performance A Case of Franchise Model Project at Jibu Rwanda

PROGRAM FOR THE DEVELOPMENT OF A FRANCHISE BUSINESS NETWORK ON THE MARKET

The franchise model is currently the most profitable, fast-growing business format that ensures the economic growth of the regional and Russian economy. The subject of the study was the program for the development of a franchise business network in the market. The purpose of this study is to develop effective management measures to expand the use of franchise relations in business networks. The use of the author's approach allowed to build a step-by-step program for scaling a ready-made partner business and increase the level of transparency of franchise relations. The practical significance lies in the development of a set of practical steps within the framework of the implementation of the action program to enhance the use of franchising in the Russian economy, which will increase the number of new participants in franchise systems.

CRM 프로세스 관점에서 네일 뷰티 비즈니스의 고객 관계강화 연구

This study attempted to investigate i) value factors in a business model, ii) service justice, and iii) relationship commitment-voluntary behavior relations from the perspectives of acquisition, maintenance, and expansion & reinforcement of customer relationships, respectively, using a structural model. For this, a total of 628 consumers who had received nail services in the past were chosen and classified by business type (sole proprietorship, franchise). After path analysis, the results found the following: First, in a sole proprietorship business, value proposal, core activity, customer relationship, information channel, and core resources had a significant influence on distributive justice, while core activity, customer relationship, information channel, and core resources revealed a statistically significant effect on procedural justice. In addition, value proposal, key partner, core activity, customer relationship, information channel, and core resources showed a statistically significant influence on interactional justice. In the franchise business model, value proposal and core resources significantly influenced distributive justice, while value proposal, core activity, and core resources revealed a significant effect on procedural justice. Value proposal, key partner, information channel, and core resources showed a statistically significant effect on interactional justice. Second, distributive, procedural, and interactional justices had a significant influence on relationship commitment in both sole proprietorship and franchise models. Third, relationship commitment also showed a statistically significant effect on voluntary behavior in both business models.

Are franchises really more viable? Evidence from loan defaults

This study examines whether franchisees are less likely to default on loans compared to counterpart independent SMEs. Findings from analyses of SME loan defaults between 2001 and 2015 suggest that franchisees, young and old, were just as likely to default than non-franchisee counterparts. The likelihood of loan default is higher for franchisees than for non-franchisees for those with high debt burdens. While default rates vary by sector, these findings are robust to sector-specific estimations and alternative time horizons of default. Findings suggest that the benefits of the franchising model, such as new firms acquiring the franchisors’ brand name, do not necessarily lead to lower default rates for franchisees. Overall, this study finds evidence questioning the proposition that franchising is a relatively less risky form of business organization for prospective entrepreneurs.

FRANCHISING AS AN EFFECTIVE MODEL OF DOING INTERNATIONAL BUSINESS AND PROSPECTS OF ITS DEVELOPMENT IN UKRAINE

relations. The essence of franchising and its modern development is considered. The concept of franchising and franchising network, its importance inmodern forms of international business are given and the classification of franchising to the main features is carried out. The existing opportunities forthe development of franchising in Ukraine in comparison with the leading countries and the most effective realization of its potential for socio-economicdevelopment are analyzed. The importance of international franchising as an effective model of doing business is determined, the requirements for theconditions of its development are established, the analysis of the possibilities of its development in Ukraine from the point of view of variousinternational ratings is carried out. The necessity is revealed and the main priority directions of creation the conditions for realization of the internationalfranchising are given. The stages of franchising are systematized, the existing obstacles to ensuring its implementation and recommendations forimprovement from the point of view of ensuring the competitiveness of domestic subjects of international business in the implementation of the franchisestrategy to enter foreign markets are identified. The effectiveness of management of modern international business is determined by the possibility ofrealizing to access the foreign markets, the availability of different sources of income and the ability to implement different areas of internationalbusiness, which is reflected in the growth of business. It is proved that an important feature in the implementation of franchising as an effective modelof modern international business is the available potential and compliance of the conditions of development of business structures, which are precedesof the choice and belief of its implementation. This study will make possible the assessing of trends and general needs of enterprises in the implementation of the franchise model in order to ensure, above all, their effectiveness, implementation of effective strategies of managing of the entryinto foreign markets. Recommendations for international franchising development are determined on the basis comparative study of the developmentof franchising in the leading countries, an analysis of well-known world`s ratings and they are aimed of creating the prerequisites of developingfranchising in Ukraine.

General Hardware, Inc.

The owners of a chain of hardware stores are preparing the most recent quarter financial statements. A number of business details are provided, including information to assess accrual accounting net income: sales, cost of sales, operating expenses, interest, depreciation, and taxes. The most recent balance sheet is provided, enabling an assessment of basic accruals (e.g., tax payable). This case may be used as a stand-alone exercise to illustrate the preparation of balance sheets and income statements using transactions and accruals. Excerpt UVA-C-2446 Dec. 16, 2020 General Hardware, Inc. Ginny and Joe Miller opened a small hardware store in 2004, using their own cash savings and borrowing a small sum from Ginny's parents. Nothing gave them more pride than owning and operating a locally owned business, even if it was complicated by the constant pressures placed on them by big-box retailers. But by 2019, business was booming. General Hardware had five locations, and the Millers were considering an even greater expansion in the coming year, perhaps offering their own version of a national franchise model. The drop-off in activity during the first quarter of 2020, however, dampened those plans. The quarter turned out to be a time for retrenchment and planning for a sustained period of contraction. The following is a summary of first quarter activity for the year 2020, along with the final December 31, 2019, balance sheet (see Exhibit1). · Product sales totaled $ 3 million (all customers paid with cash), and the company had paid $ 2.2million for that inventory sold. . . .

Strategizing of Fast Food Industries using A Balanced Scorecard Approach: A Case Study of McDonald’s Corporation

McDonald’s Corporation is one of the largest fast-food industries in the world. McDonald’s has always been successful through its franchising model and continuous innovation in its business strategies. This researched case study paper aims to highlight various strategies used by McDonald’s to drive success including the application of Michael Porters Dynamic Theory of Strategy and Five forces model and develop a sustainable balanced scorecard for McDonald’s Corporation. The methodology used is an archival analysis and use of published secondary resources. The findings indicate that if McDonald’s wants to continue through the path of success, they need to be changing their core values, strategies to keep up with the pace in changing global demands and complex business environments.

Enhancing Foster Care Home NGO Sustainability via Social Franchising

Research Question: This paper investigates how the social franchising approach may enhance the sustainability and capability of Foster Home NGOs in the Global South. Motivation: While many programmes exist to address issues such as poverty and lack of education for children in nations of the Global South, many operate in isolation, and are grassroots and/or stand-alone operations. Little research has been undertaken to understand how various approaches to organizational sustainability may be enacted for non-governmental organizations (NGOs) seeking to provide care for children in foster care homes. Our goal was to apply franchising and social franchising concepts as a framework for NGOs and non-profit organizations to use as a way of enhancing both the capability of achieving their mission as well as a method of organizational sustainability. Idea: Much of the literature on social franchising has been in the area of providing health care and services – however, this model may be useful to enhance the sustainability for NGOs and non-profit organizations that provide other critical services as well, such as foster care homes in the Global South. Findings: The social franchising model offers a concrete and actionable business model to foster home organizations with multiple homes to standardize care delivery as well as develop a strong core organization. Contribution: This paper explores how applying the social franchising model could enhance sustainability of NGOs with foster care home programmes, as well as some of the opportunities and challenges in applying this model to such NGOs and non-profit organizations.

Intellectual property, technorents and the labour share of production

How does the capture of explicit monopoly rent via intellectual property rights interact with the capture of additional profit via monopsonistic labour markets, and with what consequences? Most analyses of changes in the labour market focus on the distributional struggle between capital and labour over the wage share. This paper examines how the distributional struggle among firms over shares of aggregate profit has affected the labour market, generating rising income inequality. Over the past 40 years, struggles over shares of the value generated in a given commodity chain have driven de jure but not de facto vertical disintegration of those value chains. Firms vertically disintegrated by outsourcing non-core production and support activities, by in-sourcing contingent labour, and, where possible, by adopting a franchise model of corporate organization. The franchise model enables core firms to exert near total control over firms that are technically separate legal entities, while avoiding legal and social responsibility for the workers (and owners) of those subordinate firms. Vertical disintegration has produced three ideal typical kinds of firms whose differing ability to capture value and thus profit stems from their different forms of control over other firms in the value chain. Vertical disintegration generated labour shedding and employment contingency. Differential value capture has concentrated profit into firms with relatively small headcounts, reducing the degree to which profits are (partially) redistributed among workers.