International Franchising
Abstract
This paper is concerned with evaluating the structure, history, cultural aspects, leading businesses, and the future of international franchising. Franchising has become an increasingly popular market-entry mode, and the use of franchise systems for expansion into international markets is expected to continue and perhaps intensify. (Arthur Anderson, 1996) These business franchises appear as hotel chains, fast food restaurants, and many others. The first section examines the definition of franchising by giving an overview of franchising from an international perspective. The historical section traces this form of business ownership from its beginnings in the Middle Ages to the current trend in international expansion. The cultural section evaluates the cultural elements vital to creating strong business ties. The top international franchises section gives a brief description of some of the fastest growing international franchising firms. This section uses leading competitor statistics to portray the averages in the franchising industry. Finally, the future section provides an outlook for international franchising for years to come.
Structure
Franchising is a system for expanding a business and distributing goods and services and an opportunity to operate a business under a recognized brand name. To illustrate, think of the fast food industry. McDonald 's does not franchise fries and shakes, they franchise the method of delivery, brand image, and use of trademarks. Franchises begin when a business licenses its brand name and operating system to a person who agrees to run their business according to the conditions of the contract, referred to as the franchising agreement. The franchiser holds the power to exercise some control over the way the franchise conducts business using the brand name. In return for limited control, the franchiser offers the franchisee support, and in some cases brand image marketing. In return for the use of
This paper is concerned with evaluating the structure, history, cultural aspects, leading businesses, and the future of international franchising. Franchising has become an increasingly popular market-entry mode, and the use of franchise systems for expansion into international markets is expected to continue and perhaps intensify. (Arthur Anderson, 1996) These business franchises appear as hotel chains, fast food restaurants, and many others. The first section examines the definition of franchising by giving an overview of franchising from an international perspective. The historical section traces this form of business ownership from its beginnings in the Middle Ages to the current trend in international expansion. The cultural section evaluates the cultural elements vital to creating strong business ties. The top international franchises section gives a brief description of some of the fastest growing international franchising firms. This section uses leading competitor statistics to portray the averages in the franchising industry. Finally, the future section provides an outlook for international franchising for years to come.
Structure
Franchising is a system for expanding a business and distributing goods and services and an opportunity to operate a business under a recognized brand name. To illustrate, think of the fast food industry. McDonald 's does not franchise fries and shakes, they franchise the method of delivery, brand image, and use of trademarks. Franchises begin when a business licenses its brand name and operating system to a person who agrees to run their business according to the conditions of the contract, referred to as the franchising agreement. The franchiser holds the power to exercise some control over the way the franchise conducts business using the brand name. In return for limited control, the franchiser offers the franchisee support, and in some cases brand image marketing. In return for the use of
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