Franchising: Understanding Decision-Making and Business Development

This essay explores the concept of franchising as a business strategy for organizational growth, focusing on its characteristics, decision-making processes, and impact on economic development. It discusses key characteristics such as alignment, commitment, and mutual interest, emphasizing the importance of clear communication and accountability in franchise relationships. The essay also examines the franchisee's decision-making process, including need recognition, information search, and alternative evaluations, drawing on various models such as the rationality, political, process, and garbage can models. It concludes by highlighting the significance of franchising in creating business opportunities, reducing risks, and contributing to economic success, particularly in service industries, while underscoring the importance of understanding stakeholder needs and selecting appropriate franchise partners for optimal system operation. Desklib offers more resources for students.

ESSAY

Contents
Introduction......................................................................................................................................1
Discussion........................................................................................................................................1
Conclusion.......................................................................................................................................4
References........................................................................................................................................4

Introduction
The research is based on franchising which is considered to be adopted by an
organisation as a major strategy to understand the use of business model, brand and rights to sell
the branded products. The important strategy for the firms to expand their business, mainly in
retail and service chains, is through franchising. The job opportunities with economic and local
development helps in handling the continued increase of franchise (Nijmeijer, Fabbricotti and
Huijsman, 2014). This can be seen in different countries like US, France, Germany. Franchising
is for different countries where the major sales portion is for restaurants, preparation of tax and
other food retailing sectors. The multinational corporations have been working to enter the
emerging markets with governance by contractual agreement to provide a better competitive
advantage.
Discussion
Some of the major characteristics of franchising includes alignment which is about the
values and ethics of a business that are important for setting up with internal behavior and
externally for the business partners. The system includes value consistency, ethical and behavior
approach which is critical and help in defining the system. The alignment affects the behaviors of
franchise decision making process where they need to extend beyond the franchise system for
setting up business relationships (Yeung, Brookes & Altinay, 2016).
The commitment is also important to building a long-term business that will provide a
solid structure basis for trust different parties. The focus is on the long-term goals and the
intention is to build a better delivery service. The success comes with flourishing an investment
in effort. It is important to build trust by properly delivering and then communicating in an open
and honest manner.
The third characteristic is the mutual interest where the franchise and the franchisor need
to seek and understand the different business expectations and points of view for identifying
mutual interest that could easily be pursued through profitable outcomes (Lee, Kim, Seo &
Hight, 2015). The adoption of collaborative approach helps in solving the different problems
which helps in achieving common interests.

The communication needs to be clear with ensuring and understanding the positions,
obligations or any other issues which should be met. The poor communication is considered to
be a major reason for handling the breakdown of relationship and so a proper clarity for the
business partners is important for a better approach. A regular face-to-face communication needs
to be taken as per the requirements, where the different means of communication can certainly
lead to certain unintended interpretations as well as consequences (Nyadzayo, Matanda &
Ewing, 2016).
The fifth characteristic is about the accountability and responsibility where the business
have to work on different obligatory factors. There are clear and written agreements which are
for handling the avoidance of uncertainty or mis-matched expectations. This characteristic helps
in building a clear and written agreement where-in when the problems arise, one has to be
prepared about informing the parties for attempting a collaborative approach for addressing the
different problems at work.
The professional conduct helps in building the business relationship which includes that
there are ways to personally interact and work on the different behaviors set with professional
conduct (Evanschitzky, Caemmerer, and Backhaus, 2016). Some of the pre-agreed dispute
resolution are depending upon the critical addressing of disputes where there is a need to enable
a relationship for working on litigation of commercial disputes. This is costly, as well as time
consuming, destroying the relationship of business along with it. Franchising Code of Conduct
requires the franchise disputes to proceed with the mediation if the different matters cannot be
solved in the parties. Here, the approach is adopted for commercialized disputes as well.
The franchises are important to make decisions where there are independents to make
small business owners with decision making process that appears not be governed by easy formal
organizational structure (Kashyap & Murtha, 2017). There is a need to understand about the
purchase processes which will help to target the potential partners from taking hold of obstacles
to hinder subsequent stage. The purchase decision making process includes recognition,
information search and other alternative evaluations which might be distinguished depending
upon the comprehensiveness and the sophistication. The empirical model suggests that there is a
need to go through a process which begins from need recognition, searching for information and

other evaluation. The focus is on the consequences of franchisee satisfaction which is based on
post purchase consequences (Brookes, 2014).
The research makes use of the coarse-grained inventories for the potential factors where
the extant is about genuine experiences that are made significant with valuable contributions for
the international franchise. The focus is on the emerging markets, where the study will be able to
address the problems related to the extant of literature. The empirical franchise purchase model
differs mainly on the consumer behavior theory. It is imperative for the prospective franchise
owners to make the informed decisions about selection and the contract that needs to be signed.
Here, the process of selection includes the discussion on opportunities which are holding a wide
array of industries for potential benefits and drawbacks. According to decision making process,
there is a need to evaluate the external and internal environmental goals that needs to be achieved
and evaluated for a potential alternative (Nijmeijer et al., 2015). The rationality model helps in
focusing on the decisions that are not mainly considered as a linear or logical approach.
The political model of the decision-making approach involves the different human
dynamics where the power and the conflict-based factors tend to feature the power of bargaining
and compromising different ways to solve problems. The decisions involves a cycle of
bargaining to view and influence powerful individuals with knowledge, experience and resource
access to adopt the viewpoints. The decision makers might be behaving in a way which can
manipulate or ignore information for better support.
The process model helps in advocating the decisions which are not linear or holds the
logical approach. Instead, the decisions are important to be made in a incremental way which
includes different recycling periods, with iteration, and reformulation techniques. The decisions
need to proceed with the series of steps rather than identifying or implementing the solutions in a
major large step. Hence, the decision makers have to assess alternatives through using a series of
patterns and then assessing them. The alternatives are searched, with options that might be
rejected, and some new options can be added. The processes include the decision makers who
need to conform to the pre-established standards beliefs, with unwritten rules of organization that
are for minimizing the risks for a better outcome.
The garbage model is about focusing on the decisions that are made under different
conditions. The approach requires to focus on rational and bounded rationality model that

advocates the different series of steps that begins with the problems and end with a particular
solution. There are decision results that comes from a complex interactions with different
independent elements like the problems, solutions and participants (Argyres & Bercovitz, 2015).
The components of decisions generally pour to organizational garbage with better outcomes of
collusion.
As per the studies done previously, the franchise decision making process involves the
different human factors where the stakeholder groups works on diversified needs and
expectations. The study is determined through selecting the franchise partners and then
emphasizing the appropriate decisions, in regard to selection partner for a better operation of
franchise system.
Conclusion
With the recent times, the franchising has been able to grow and consider the strategies for
developing business by owners. It involves the franchise system for creating better opportunities
for running a business with lower risks and recognized brand. The importance of franchise for
countries include success of economy and growth which is applied to different industries, mainly
to service industries. The investigation of franchising includes the perspectives which has
received less attention. Hence, for the small business, survival, performance are of major interest.
The study includes the succeeding or showing success in outlets with major importance of
consequence for the franchisees. The variations are determined through considering firms as
autonomous entities with focusing internal resources and capabilities. It involves the interfirm
relationship to go beyond the firms’ internal resources along with taking rationalized view.
References
Argyres, N. and Bercovitz, J., 2015. Franchisee associations as sources of bargaining power?
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Brookes, M., 2014. The dynamics and evolution of knowledge transfer in international master
franchise agreements. International Journal of Hospitality Management, 36, pp.52-62.

Evanschitzky, H., Caemmerer, B. and Backhaus, C., 2016. The franchise dilemma:
Entrepreneurial characteristics, relational contracting, and opportunism in hybrid
governance. Journal of Small Business Management, 54(1), pp.279-298.
Kashyap, V. and Murtha, B.R., 2017. The joint effects of ex ante contractual completeness and
ex post governance on compliance in franchised marketing channels. Journal of
Marketing, 81(3), pp.130-153.
Lee, Y.K., Kim, S.H., Seo, M.K. and Hight, S.K., 2015. Market orientation and business
performance: Evidence from franchising industry. International Journal of Hospitality
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Nijmeijer, K.J., Fabbricotti, I.N. and Huijsman, R., 2014. Making franchising work: A
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franchisor and units. PloS one, 10(2), p.e0115829.
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Yeung, R.M., Brookes, M. and Altinay, L., 2016. The hospitality franchise purchase decision
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