Comparative Study of the Franchising Model and e-commerce Business Report 2022

Running head: Comparative study of the franchising model and e-commerce business
COMPARATIVE STUDY OF FRANCHISING MODEL AND E-
COMMERCE BUSINESS

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Comparative study of the franchising model and e-commerce business
Executive Summary
The report aims at comparing two business-models e-commerce and franchise model for
identifying the more effective one. E-commerce is comparatively a modern approach to the
franchise due to rapid technological advancement. The report is divided into six sections.
In the introduction part, the researcher has provided a background of the research along with
a justification for selecting the topic. Definitions of e-commerce and franchise are also given.
Further, the aim and two research questions to be answered by the research are also
developed in this section.
Next comes the literature review section, where the concepts, theories and models related to
franchise and e-commerce are critically analysed. From the perspective of different scholars,
the relationship between the two business models is also shown. This section provided an in-
depth knowledge of the research area.
The third section is the methodology section, including research techniques and methods.
Here a detailed analysis of the research methods with justification for selection is provided.
The researcher selected positivism philosophy, deductive approach, descriptive design,
secondary data, qualitative research and thematic analysis method.
The findings evaluated that E-commerce business model is different from that of franchisee
business model in terms of the operation structure and the revenue unit. The e-commerce
model is about the online presence that increases the transparency, sales and thereby the
profit of the organisation. However, the franchise model helps in business expansion by
selling the brand name to the individual owners who in turn pay royalties. However, the
growth of e-commerce is higher with changing purchasing behaviour, growth of
infrastructure and the franchisee growth has reduced due to limited economic growth.

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Comparative study of the franchising model and e-commerce business
Table of Contents
1.0 Introduction..........................................................................................................................5
1.1 Background..........................................................................................................................5
1.2 Definition of the franchise model and e-commerce.............................................................5
1.3 Justification of the selected topic.........................................................................................6
1.4 Research aim........................................................................................................................6
1.5 Research questions...............................................................................................................6
2.0 Literature review..................................................................................................................7
2.1 Concept of franchising.........................................................................................................7
2.2 Concept of e-commerce.......................................................................................................7
2.3 Theory on e-commerce and franchising...............................................................................7
2.4 Comparison between franchising and e-commerce.............................................................8
3.0 Research Methods..............................................................................................................10
3.1 Research technique.............................................................................................................10
3.2 Data analysis technique......................................................................................................11
4. Findings and analysis...........................................................................................................12
5. Discussion............................................................................................................................18
5.1 Findings of Research Question 1.......................................................................................18
5.2 Findings of Research Question 2.......................................................................................18
6. Conclusion............................................................................................................................20
6.1 Conclusion from the above findings:.................................................................................20
6.2 Limitations:........................................................................................................................20
6.3 Recommendations for further research:.............................................................................21
References................................................................................................................................22

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Comparative study of the franchising model and e-commerce business
1.0 Introduction
The aim of the project report is carrying out a detailed comparison between the franchise
model and e-commerce model and eventually finding out the better one. Therefore, the
project is categorised into different sections for making the analysis systematically.
Background of the chosen topic is provided, followed by definitions of the problem. Next, the
study involves justifying the research topic selection, along with a research aim and two
research questions. In the next section, a critical review of relevant literature is carried out.
Next comes, the methodology section that gives a detailed account of the research methods
that are used for completing the study. Then, research finding followed by a brief discussion
and conclusion is provided.
1.1 Background
In Australia, franchising started during the early 1970s in petroleum, automotive and fast
food industries initially. By the year 1992, 450 franchises were there in the country that
increased to 700 in 2002. The first regulation pertains to franchising developed in 1970-1980
at the state level for collecting taxes in specific industries like tobacco retailing. In 1982, the
Franchise Council of Australia was created (Schaper& Buchan, 2014).
The way e-commerce applications and technologies support business functions are
significantly different and contain sales, marketing, manufacturing, accounting and finance.
However, in several companies, the implementation of the e-commerce model needs staff and
management to deal with modern applications and technologies, and it has to show the
advantages obtained by its use. During 1970, the e-commerce model was first used in
Australia for sharing data between customers and suppliers.
1.2 Definition of the franchise model and e-commerce

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Comparative study of the franchising model and e-commerce business
Franchise refers to a mixed type of business model, which includes the features of sole
proprietorship besides that of a corporation. It enables the owner of a business expanding the
commerce by selling the authorities of using the brand and the business model rather than
developing a new entity separately (Thomas, 2015).
E-commerce or digital commerce refers to the web 2.0 version of e-commerce including the
full bandwidth of involvement with customers though different digital networks are
comprising mobile and social media for building enduring customer relationships and
creating repeat business (Riemer et al. 2013).
1.3 Justification of the selected topic
The franchise is comparatively a traditional business model comparing to e-commerce in
terms of use. The topic is chosen for identifying the relevance of applying the two business
models in specific contexts. A comparison of e-commerce and franchising will give an
insight into their effectiveness, and the better ones can be identified accordingly, applying
which, today's business can make a better profit and competitive advantage.
1.4 Research aim
The aim is to compare e-commerce with a franchise model and identify the better one.
1.5 Research questions
 How the franchisee business model differs from the e-commerce business model?
 Which business model is more effective between the e-commerce business model and
franchise model?

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Comparative study of the franchising model and e-commerce business
2.0 Literature review
2.1 Concept of franchising
Franchising can be an effective way of a new entrepreneur to start a business, as he/she can
follow a positive and successful business plan. In a franchising activity, the owner of the
actual business is called franchisor, who sells the power of using the brand name to a
businessperson, who is called a franchisee (Kacker et al. 2016). According to Dada, Jack&
George (2016), the franchisor gives continuous support to the franchisee in marketing,
business activities and gaining financing instead of which, the franchisee follows the business
model of the franchisor and pay royalties according to the unit sales percentage to the
franchisor.
2.2 Concept of e-commerce
When it comes to e-commerce, maximum organisations use information system for saving
cost, which enables the firm decreasing inventory and rationalising business operations and
processes, combining payments and billing systems into the management of supply chain and
enhancing customer service (Kobylińska, 2018). As stated by Wigand (1997)It is
comparatively a modern concept, which sneaked into busies in 1970. By 2000, the internet
became an essential part of e-commerce. E-commerce or electronic commerce is the selling
and buying products or transferring data using an electronic medium, mainly the internet.
2.3 Theory on e-commerce and franchising
System theory of e-commerce- System theory was developed in 1945 that helps in analysing
business entities and their behaviour. The primary benefit of the applying system approach is
that it includes several aspects of the system theory like inputs, boundaries, outputs, control,
feedback, and so forth. An information system is usually an instance of a system, which