International Franchising

Paper Summary:

The paper explains the benefits the practice of franchising offers the franchisor and the franchisee that involve resource scarcity, international cooperation and collaboration, corporate unity, employee performances, division of responsibilities and overcoming the impediments posed by economies of scale. The paper therefore shows how franchising operations in the international context are increasing mostly due to the benefits they offer to both partners. The paper also points out that even with all advantages, franchising remains a market entry policy which must always be developed in accordance with the characteristics of the market and company.

From the Paper:

"International franchising is a more and more common phenomenon which has been made possible with the liberalization of markets and the globalization of international economies (Preble and Hoffman, 1995). Franchising operations are most common among the fast food and restaurants industry, with current trends developing in hotel operations as well (Fried and Elango, 1997). Franchising basically implies that the large company, the franchisor, will allow a secondary party, the franchisee, to operate in his behalf, to sell his products under the corporate brand name and to partially benefit from the registered revenues."

Sample of Sources Used:

• Castrogiovanni, G.J., Combs, J.G., Justis, T.R., Shifting Imperatives: An Integrative View of Resource Scarcity and Agency Reasons for Franchising, Entrepreneurship, Theory and Practice, Volume 30
• Fried, V.H., Elango, B., 1997, Franchising Research: A Literature Review and Synthesis, Journal of Small Business Management, Volume 35
• Lafontaine, F., Shaw, K.L., 1999, The Dynamics of Franchise Contracting: Evidence from Panel Data, The Journal of Political Economy, Volume 107, Number 5, pages 1041-1080
• Martin, R.E., 1988, Franchising and Risk Management, The American Economic Review, Volume 78, Number 5, pp.954-968
• Norton, S.W., 1988, AN Empirical Look at Franchising as an Organizational Form, The Journal of Business, Volume 61, Number 2, pp.197-218

More papers on International Franchising:

• Essay # 24832 : "International Franchising"
• Research Paper # 91782 : "McDonald's Franchising Strategy"
• Research Paper # 98955 : "Marketing Channels for Franchising"

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