By Ilan Alon
Provider Franchising succinctly extracts from observations approximately foreign franchising from either the scholarly and alternate literature. The paintings provides insights gleaned via broad study and the reports of the writer. therefore, the booklet advances the physique of data on overseas franchising for the tutorial group. as well as being a leap forward textual content for researchers in enterprise and economics the publication additionally includes tips for franchisors and franchisees of their efforts to be successful within the international market. Ilan Alon has made significant contributions to the knowledge of franchising, either via his personal study and his compiling and research of the paintings of different major researchers. Alon pioneered learn into the internationalization of franchising along with his released reviews from Asia, Europe, Latin the United States and different components of the area.
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Additional info for Service Franchising: A Global Perspective
The transfer of technology as it relates to franchising refers to the transfer of the IlanÄlon 39 'learning organization' and labor skills in addition to the hardware and machinery that franchisors provide and can be viewed on three levels: (1) operating capabilities, (2) investment capabilities, (3) innovative capabilities (Stanworth, Price and Purdy, 2001). Operating capabilities to operate and maintain a business, investment capabilities to increase productivity and create new units, and innovative capabilities to modify and improve methods and products are a part of the dynamic resources, capabilities, routines and skills franchising offers to developing countries (Stanworth, Price and Purdy, 2001).
A greater scope of operation reduces the monitoring capabilities of the firm, leading the firm to use more franchising to align the incentives of the franchisee (the agent) with the franchisor (the principal). The significant negative coefficient of investment is peculiar. It suggests that the lower the level of investment, the greater the proportion of franchising. This result can be interpreted quite logically from the standpoint of the franchisee. That is, potential franchisees will tend to seek franchise systems that have a lower cost of operation and, in particular, lower up-front fees.
Alon and Banai (2000) showed that franchising in Russia taught entrepreneurs to appreciate the concept and to emulate it in their own businesses. 3 8 What are the Social and Economic Benefits and Costs of Global Franchising? Franchising Life Cycle SME development through international franchising in emerging markets often occurs in steps. First, foreign franchisors enter the market though master franchising, joint ventures, or sole ventures. These entities, in turn, are used to launch local franchising through direct or area franchises.