Franchise encroachment, or the addition of an outlet in the vicinity of existing franchisees, is largely viewed as resulting in revenue cannibalization of incumbent locations. Against this backdrop, ...the authors consider the possibility that the addition of same brand outlets can, in fact, also create positive effects via customer utility and ultimately benefit franchisees, due to a range of mechanisms such as quality signaling, learning, or brand awareness, resulting in a positive pathway on franchisee performance. The authors unpack this possibility using an experiment and detailed proprietary and publicly available data sets from the hotel industry over a five-year period. Their results show evidence of positive effects on customer utility for same-brand outlets and stronger effects for newer brands, cross brands, and online travel agency channel bookings. Counterfactual simulations indicate that although encroachment hurts franchisees on average, it can modestly benefit same-brand franchisees in low-brand-density markets. Together, the findings illustrate the potential “sunny side” of encroachment, underscoring the need to update our view of encroachment as context-dependent. The novel emphasis on customers versus the dominant firm view suggests customer and incumbent responses to encroachment should be accounted for in the development of franchise strategy and public policy decisions.
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IZUM, KILJ, NUK, OILJ, PILJ, SAZU, UKNU, UL, UM, UPUK
The article is aimed at studying the development of franchising in Ukraine in the prewar period, as well as its realities, features and prospects for development under martial law. It is noted that ...after the declaration of martial law on the territory of Ukraine and the beginning of the active phase of military actions, most of the business was actually paralyzed due to various factors and the impossibility of carrying out economic activities by enterprises located in the territory of hostilities. Instead, franchising is an up-to-date economic model for organizing and carrying out entrepreneurial activities that will allow businesses to survive and develop in this difficult time for the country. The accomplished analysis of the dynamics of franchising in Ukraine for 2017–2020 showed that franchising has been slowly but steadily developing in recent years, which justifies the annual increase in the number of franchisers and franchised facilities, an increase in the number of domestic and foreign brands in the franchise market. Precisely the increase in the share of Ukrainian franchises has been determined, since the franchise business model itself better takes into account local realities. The franchising created in Ukraine is more adapted to local market requirements; Ukrainian franchises are competitive, have a comprehensive business development program and strong support after the launch of a franchise project; the domestic franchising is directed towards further cooperation on a long-term basis. Based on a study by the financial portal Fibi, a rating of the best franchises in Ukraine in 2022 in trade, services and catering is compiled. It is also noted that during the wartime in Ukraine, some countries significantly simplified the rules for starting a business by Ukrainians, which facilitates the creation of a market for Ukrainian franchises abroad and the spread of national brands. It is defined that in order to support the Ukrainian economy during martial law, the government has introduced comprehensive changes to legislation and State-supported programs, which will help the development of entrepreneurship and the spread of franchising.
Grounded in agency theory, this study examines how franchisors' ex ante contracts and extracontractual incentives influence their ex post monitoring and enforcement efforts and how combinations of ...the ex post governance mechanisms drive franchisee behavior. Integrating three archival data sources and a survey of 206 franchisees across eight automotive brands, the authors find that franchisor reliance on contractual completeness appears to result in reduced ex post behavior monitoring and enforcement efforts, while contractual one-sidedness is associated with higher levels of behavior monitoring but reduced enforcement. Extracontractual incentives, when offered to the franchisee, are associated with increases in monitoring and enforcement. In isolation, franchisor monitoring and enforcement efforts are ineffective in eliciting desired franchisee behaviors. However, different combinations of franchisor monitoring and enforcement efforts affect franchisee compliance and opportunism, sometimes with counterproductive results. The study provides an initial baseline of understanding on how ex ante governance characteristics and combinations of ex post governance mechanisms function to facilitate or deter franchisee compliance and opportunism.
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BFBNIB, INZLJ, IZUM, KILJ, NMLJ, NUK, OILJ, PILJ, PNG, SAZU, UKNU, UL, UM, UPUK, ZRSKP
Albeit scholars have conducted international franchising research for over two decades, our understanding of the antecedents and outcomes of this particular type of internationalization is still ...limited. In this article, we systematically review the literature related to international franchising and create a road map of extant knowledge. Through this review, we seek to provide a greater understanding of the use of theories, methodologies, and the emergent phenomenon of international franchise partnerships in multiple industries. Additionally, we detected inconsistencies in paradigms that allowed us to offer suggestions for future research. Among the opportunities for future research in the area of international franchising, constructs such as cultural sensitivity, institutional distance, management motivation, network complexity and financial performance need further attention.
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GEOZS, IJS, IMTLJ, KILJ, KISLJ, NLZOH, NUK, OILJ, PNG, SAZU, SBCE, SBJE, UL, UM, UPCLJ, UPUK, ZRSKP
The creation of franchise companies has a lasting and positive impact on the economies of the countries and local communities in which they operate. Countless jobs are created and supported by ...franchises, and those jobs help lower the unemployment rate. Franchises support the national GDP through billions of dollars in products and services, and job creation. The 2008-2010 recession, as well as the pandemic, had a negative impact on the US and global economy, although franchises fared better than most other retail chains and small businesses. The subject of research in the paper is the analysis of the basic characteristics and features of franchising, with the aim of drawing attention to the use of franchise in business on domestic and international markets, to point out the specifics of business and its ways of functioning, to point out the advantages, disadvantages, and wider significance of franchise business, on the existence of the attractiveness index of a country for franchise investments. Research results indicate that franchises are economically more stable, mainly due to their branding, consumer familiarity, and strong network base. It is estimated that franchises will operate better, more intensively and more diversely in the coming period.
The recognition that better use of existing knowledge can enhance performance has spawned substantial interest in the replication of productive knowledge within organizations. An enduring belief is ...that when expanding by replication, organizations can and should strive to adapt to fit the salient characteristics of new environments. Yet some have argued that the exploitation of an established template for doing business by replication can be more successful when the template is copied precisely. Using unique longitudinal data, we report a large-sample empirical investigation of the survival consequences of accurate replication versus local adaptation by examining the effect that deviation from the template has on the survival chances of franchise units within a large franchise organization.
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BFBNIB, CEKLJ, IZUM, KILJ, NUK, PILJ, PNG, SAZU, UL, UM, UPUK
Based on Law Number 13 of 2003 concerning Employment, it provides equal rights and opportunities for workers to choose, get or change jobs and earn decent income both at home and abroad. However, in ...the franchise contract, there are several clauses, one of which is a non-competition clause, which means that to protect the franchisor's trade secrets, the franchisee is prohibited directly or indirectly from opening another business that is the same or similar to the franchise business. During and even up to several years after the termination of the agreement. Through a franchise agreement, the franchisor grants the franchisee the right as a business partner to run a business in the same field by using a trademark or trade name and other intellectual property rights by maintaining the quality standards and reputation of the franchisor in relation to the use of the brand of the goods and/or services agreed upon. Furthermore, this raises a question about whether or not this clause can be used as a basis for companies to claim achievements. However, in reality there were some workers who did not fulfill this clause on the grounds that they needed work to fulfill their needs. So the "clause" (cause) of the agreement is what the parties want to achieve with the agreement, namely the purpose of the agreement. It must be seen about the purpose of the company that includes a non-competition clause in the work agreement. As long as the purpose is reasonable and it can be proven that the interest must be protected, and does not limit rights excessively, the conditions for this permissible cause are fulfilled.
This paper analyzes how franchise cont ract conditions are influenced by business structures as well as how contract conditions affect producer surplus by utilizing Korean franchise Information ...Disclosure Documents for the years 2014-2016. We find that franchise fees tend to increase in line with increases in the numbers of direct stores or the business period. Accordingly, it would be reasonable to check whether the franchise fee is excessive compared to the amount of reputation capital rather than to criticize the absolute level of the franchise fee. Regarding royalty contracts, the larger the discount in the raw materials purchase is, the higher the initial royalty is. Although this appears to be a royalty discount, it can be a means of inducing a raw materials purchase contract by initially setting a high royalty rate and then lowering it after the purchase contract is signed. Concerning the effect on producer surplus, the resultsshow that an increase in franchise fees and royalties negatively affects the franchisee's operating profits but positively affects those of the franchisor's, leading to conflicts over the distribution of ec onomic value added. Based on the findings here, we propose various policy recommen dations, specifically reinforcing the contents in the Information Disclosure Document, further activating fixed-rate royalties, and strengthening the qualifications of franchisors when recruiting franchisees.
Business practices with the Franchise sistem in Indonesia are growing and developing, so we often encounter them around us. This kind of business sistem was basically started and popularized by ...westerners who incidentally is a capitalist sistem, so that for the Indonesian people, who are predominantly Muslim, this franchise is certainly a business sistem that must be studied in depth according to sharia, because specifically the use of brands must be charged other than fees other. This research is a normative juridical research with library research method. Sources of legal materials in this study include primary legal materials, namely regulations on Franchise, secondary legal materials, namely references in the form of literature related to the Franchise business, then tertiary legal materials such as Indonesian language dictionaries. From the research, it is known that the Franchise sistem applied in Indonesia is a business format franchise sistem, where a Franchisee obtains the right to market and sell products or services in a specific area or location using the operational and marketing standards of the Franchisor. The law of fee royalty for the use of brands in the franchise business sistem follows the law of syirkah which is allowed as long as the business, product or service is not prohibited by Islamic law.
•Develop a model on International Franchising partnerships integrating factors determining the franchise formation, expansion and performance.•Discuss how these partnerships develop and how they ...differ.•Derive theoretical propositions for future research in academia and for practice in the industry.
International franchising has been widely studied from the franchisor perspective, as it relates to why and how firms decide to expand by viewing it as a uni-directional perspective. With the increased volume of international franchising businesses, theory development that considers multidimensional elements such as distance, trust and its effects on franchise relationship and the system’s performance is needed. The purpose of this paper is to develop a conceptual model on international franchising partnerships that integrates factors determining franchise formation, expansion and performance grounded in Relational Contracting Theory. The uniqueness of the proposed model is on its originality as a dynamic behavioral theoretical model to address the possibilities for value creation, performance improvement and minimizing failure probability in franchise systems which is important for managers as well as researchers.
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GEOZS, IJS, IMTLJ, KILJ, KISLJ, NLZOH, NUK, OILJ, PNG, SAZU, SBCE, SBJE, UL, UM, UPCLJ, UPUK, ZRSKP
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