Challenges of Franchising: Burger King's Bulgaria Entry Strategy

This research proposal examines the challenges Burger King faces when using franchising as a market entry strategy in Bulgaria. The report includes an executive summary, introduction, background, and importance of the study. It presents a literature review on franchising concepts and challenges, followed by a discussion of research methodology, including the inductive research approach. The study incorporates a questionnaire for primary data collection and analyzes the findings. It also addresses research limitations, reflection, and recommendations for Burger King. The report highlights franchising as a potentially efficient, low-risk strategy for market entry, emphasizing its benefits in terms of low start-up costs and access to new talent. The report also explores the challenges faced by companies during international expansion, such as cultural and language barriers. Finally, the report recommends ways to overcome the challenges faced by Burger King while using franchising and concludes with a summary of key issues.

RESEARCH PROPOSAL
Title : The challenges of using Franchising as market entry strategy to enter Bulgaria, a
study of Burger King in Bulgaria.

EXECUTIVE SUMMARY
This report has shown the Literature review of the Aim and objective of the research.
Further this report has shown the different tool used by the researcher in conducting the research
with the help of the Research methodology. Further it has been found out that the study has
shown the Questionnaire and the analysis of the Questionnaire to collect the primary data for the
research. In the end the report has shown the Research limitation, reflection and the
recommendation for the Burger King. This report has recommended the franchising can prove
as a efficient way as it consist of low risk and it accounts for low start-up cost. Also it will help
company to access new talent and enter the new market by investing low cost.

Table of Contents
EXECUTIVE SUMMARY.............................................................................................................2
INTRODUCTION...........................................................................................................................4
BACKGROUND OF STUDY.........................................................................................................4
IMPORTANCE OF THE STUDY..................................................................................................4
LITERATURE REVIEW................................................................................................................5
SUMMARY OF LITERATURE REVIEW.....................................................................................8
RESEARCH METHODOLOGY.....................................................................................................8
PROPOSED TIME SCALE...........................................................................................................10
DATA ANALYSIS........................................................................................................................12
Findings -.......................................................................................................................................22
RESEARCH LIMITATION AND EVALUATION.....................................................................22
REFLECTION ..............................................................................................................................23
RECOMMENDATION.................................................................................................................24
CONCLUSION..............................................................................................................................26
REFERENCES..............................................................................................................................27

INTRODUCTION
Research proposal is a document proposing a research project, generally in the sciences
or academia, and generally constitutes a request for sponsorship of that research. This report
examines the Literature review of the research and also shows the summary of the literature
review. Further this report examine the Research methodology which shows the different tools
are used in conducting the research. Further this report examine the Questionnaire for the
primary data collection and the result of the Survey. In the end the report examine the Research
limitation, reflection and the recommendation for the Burger King.
BACKGROUND OF STUDY
Fast Food industry of Bulgaria has seen a good amount of the growth in the last few
years. The reason behind the same is the stronger economic growth of the nation. Another thing
which has boosted the food and beverage industry is the rapidly growing contribution from the
agriculture sector of the Bulgarian. Another positive impact for the Bulgarian food industry is
increasing spending of the consumer in the market. As the report explain that Bulgarian used to
invest their 40% income on food, beverage and tobacco.
Burger King is an American multinational chain of hamburger fast food restaurants. The
company was founded in 1953. Bulgaria is a Balkan nation which used to have Black sea
coastline, cover with variety of mountain including Danube.
IMPORTANCE OF THE STUDY
Aims : To identify the challenges and opportunities faced by using franchising as market
entry strategy by Burger King in entering in Bulgaria.
Objectives :
 To identify the challenges which is faced by Burger king by using franchising as its
market entry strategy to enter Bulgaria.
 To recommend ways in order to overcome challenges faced by Burger King while using
franchising.
Research Questions-

 What are the challenges faced by Burger king by using franchising as its market entry
strategy to enter Bulgaria.
 What are the ways to overcome challenges faced by Burger King while using franchising.
This study will help the company in understanding the issue which is faced by the burger king in
the franchising system. This study will also help the business in understanding the what is the
real concept of the Franchise. This study will also help the business in knowing the way by
which Burger king can overcome the issue.
LITERATURE REVIEW
Theme 1 : The concept of franchising as a market entry strategy.
According to Bai, McColl and Moore (2017) the term globalization means the procedure
through which companies develop international influence or initiate to start operating the
business at international level. There are various motives that influences business to go global. It
includes increasing market share, providing employment opportunities, enter into new markets
etc.
One of the theory of globalization is world system theory according to this the world is
divided into three regions and hierarchy into organized tiers. It is the immanence and centrality
of the inter state system.
There are various types of market entry strategies. Direct exporting means to sell the products
directly to another country. Other is licensing, under this company transfer rights to use goods or
service to another firm.
Another type of strategy is franchising is an agreement between franchisor and
franchisee. Under this, franchisor provides grants rights to franchisee to sell its products or
services by using the brand name and trademark of franchisor. Therefore, franchisee plays the
role of a dealer. Franchisee pays commission or fees as a compensation to franchisor.
Franchising is also a useful market entry strategy that firms uses for expansion of the business.
International mode of entering in foreign market is a major issue in the field of international
marketing.
There are various companies that adopts this strategy to expand their business like KFC,
Burger King etc. Franchising strategy is having both advantages and disadvantages. One of the

major advantage is that, company does not require investing huge amount of funds. Therefore, it
will be easy for firm to enter new market which may be otherwise restricted by government due
to regulations and policies Baresa, Ivanovic, Z. and Bogdan, (2017) critics that, there are some
disadvantage of franchising such as the revenue of company may be lower as compared to other
methods. Further, there is lack of control of franchisee over production and marketing of
products.
As per the view of Hoffman, Munemo and Watson (2016) Finding a representative in another
country for conducting the business is very helpful for entering into a new market. Another
factor that companies should consider in franchising is the protection of intellectual property
rights that are essential for franchising business. As per the Article on Bulgaria Franchising,
due to increase in purchasing power of consumers, improvement in standard of living of the
people living in country, there are various franchise firms that have entered the market such as
Burger King. Numerous fast food franchises started operating their business in major cities of
Bulgaria. There are various companies that are operating its operations in almost every country
of Europe.
According to the author Welsh and Alon (2015) company should consider certain factors
while moving at international level. These factors affect the decision of companies. One of the
major factor is culture. The difference in culture determines that whether the business would be
successful or not. Another factor is legal and regulatory barriers. Conducting business in foreign
country is achievable if firm is flexible enough to work with local regulations. Furthermore,
business should consider regulations of foreign government. The stability of local authority is
very important when company is reviewing the operations of overseas business.
Theme 2 : The challenges faced by organizations while using franchising as a market entry
strategy.
Sonwalkar, J. and Soni (2015) has pointed out in their paper, there are various challenges
an organization have to face while using franchising as a strategy to enter into a new market.
Companies also faces various challenges while starting restaurants in another countries during
international expansion. These challenges can be considered as cultural barrier, lifestyle of
people, language barrier etc. Making arrangement with franchisee for selling the products of the
firm is a complex task. Franchisee must have full knowledge of laws and regulations that are
applicable on the companies.

Welsh, D.H. and Alon, (2015) has pointed out that, one of the major challenge that
companies experiences while setting up franchising in another country is the language that
people living in country speaks. Language barrier may negatively affect the profitability and
expansion strategy of the firm. Further, another major challenge firms faces during franchising
business in the country is Culture of the country.
Generally, people of other countries prefers vegetables and dairy products in lunch and
dinner. People buy burgers and other fast food items only when the price of the product is
affordable by them. Therefore, companies faces major challenge in developing pricing strategies
to attract people to buy the products of the company. Mainly, old age people living in the country
like to visit restaurants. Therefore, it is another challenge for company to develop effective
marketing strategies for attracting young population as well. The impact of Brexit on franchisors
also depends upon the relationship of countries with European Union. Firms also require
complying various regulations of the country (Alpeza, Erceg, A. and Oberman Peterka, 2015).
As per the view of Welsh and Alon (2015) there are various firms that have used
franchising as a market entry strategy. For example – Tesco has choosen franchising strategy
fior opening 18 franchise convenience stores in countries other than UK. The move has been
viewed as major shift in strategy of the group. Another example is Sainsbury has also consider
franchising strategy to open 25 new convenience stores. It has been tough for company to
determine suitable sites.
Theme 3 : Recommendations for overcoming the challenges faced by companies while
entering into franchising.
According to Alpeza, Erceg, A. and Oberman Peterka (2015) there are different ways in
which companies can overcome the challenges they faces while using franchising as a strategy
for entering in new market. To overcome language, cultural challenges that companies faces
while entering the market in another region. Company should firstly conduct proper research of
the market. This will help the firm to determine the type of culture people living in country are
following. Management of Franchisor company should arrange training programmes for
employees that are working in franchisee business. This will help to develop the knowledge
regarding different types of languages. So that, workers that are working in restaurants will
effectively communicate with customers. Moreover, company should make efforts to build

strong relationship with franchisee. So that, they will make more efforts to increase the sales and
revenue of the company.
Alpeza, Erceg, A. and Oberman Peterka (2015) has suggested that, firms should also focus on
understanding all the rules and regulations that are applicable on franchising business. So that,
non-compliance of the policies of Government of other countries will not negatively impact the
operations of the firm. Further, it has been suggested that, company should develop effective
pricing strategy to offer products like hamburgers to customers. Management of Franchisee
should develop effective marketing campaigns to attract all age group population that is young
and old age people for purchasing the products of the firms. It should also advertise the products
on social media platforms like Facebook etc.
SUMMARY OF LITERATURE REVIEW
There are various types of key issues that are examine in the above Literature Review
such as it has explained the key challenges that company faced during franchising for entering
into a new market. It has covered challenges like developing pricing strategies, marketing
campaign etc. Literature review of other authors has provided only a limited view on
recommendations for overcoming these challenges.
RESEARCH METHODOLOGY
Research Approach: Research approach is the step based procedure or the plan of the
research which looks at the broad amount of the assumption to detailed method of data
collection, analysis and interpretation. Research methodology includes outlining the problem at
the starting stage and implying the assumption. Their are two type of the Research methodology
which are generally used by the researcher i.e. Deductive approach and the Inductive approach,
Deductive approach is the approach which looks at creating the hypothesis on the basis of the
theory and after that the strategy will be design to test the already made hypothesis. Deductive
approaches process starts with the Theory than follow up with the Hypothesis, test and end up at
the result confirm or reject (Creswell. and Poth, 2017). Inductive approach of the research does
not start with the hypothesis it generally looks at the Aim and objective of the research project
which needs to be achieved and the theory are applied at the last stage of the approach. This
approach starts with the observation, pattern and then ends at the Theory. The current research

will used the Inductive research approach as the research approach tool as it will hep the
researcher in relating the topic of the research comfortably.
Research Philosophy: Research philosophy is a belief about the way in which the data
can be gathered analysed and used. Generally researcher used to used the two type of the
Philosophy in the research i.e. Positivism philosophy and the interpretivism philosophy.
Positivism philosophy is the philosophy in which the researcher used to study the society in
which the researcher used to see the scientific evidence. Interpretivism philosophy used to see
the case study related to the interest of the Human nature. The current report will take the help of
the Interpretivism philosophy to achieve the Aim and objective of the research as the research
also looks at the interest of the 20 respondents toward the answer of the questionnaire which will
be their interest.
Data collection: Data collection is the process or the method which focuses on gathering
and measuring the data, which helps the researcher in testing the hypothesis. There are two main
sources of the data collection. The first one is the primary source in which the data is collected
from the source of the origin itself and the data which is collected is of a fresh nature. For e.g.
The data collected from the survey or the questionnaire is known as a primary source. To collect
the data survey monkey tool was used in which the question was filled and send to the
respondent directly on their male. The secondary source is the source in which the data is
collected from the other resource who have already collected the data. For e.g. Data collected
from the books, magazines (Saunders and et.al., 2015). For studding the role of the franchises'
researcher will use the both the source as the primary data was collected with the help of the
survey and the questionnaire and the secondary data was supported by the literature review.
Data Analysis: Data Analysis is the process in which the collected data is evaluated to
find out the required information. Data Analysis generally follows the process of collection,
transformation, cleaning and in the end the modelling the data. Their are two different way
through which the data can be analysed. The first way in the qualitative analysis in which only
non numeric data are analysed by the researcher with the help of applying the different theory
and the model. The second method is the Quantitative analysis in which the researcher used to
analysed and observed the numeric data (Thuries and Gillet, 2016). This report will take the help
of or will use the Qualitative approach to analysis the data for understanding the challenges and
the concept of the franchises.

Sampling: Sampling generally known as a selected group of the people which are taken
by the research to collect the primary data. Researcher generally uses the two type of the
sampling i.e. probability research sampling in which the researcher used to select the larger
number of the population as a sampling for the research. Non probability is the second type in
which the researcher used to select the fixed number of the responded for gathering the data
(Mihas, 2019). This research report of the Burger king will be using the Simple random sampling
in which the research will be taking the 20 manager as a respondents to gather the primary data
of the research.
Ethical: Research ethics are the principle or the moral which the individual has to follow
for conducting the research. This report also follows the different ethics of the research as the
Questionnaire which has been framed is framed on the basis of the non busyness. Responded
also were not influenced or force to change the opinion of them, they were independent to
answer the survey by their own. The research which is conducted by looking at all the principle
of the research.
PROPOSED TIME SCALE

QUESTIONNAIRE
Name:
1. What do you consider to be key benefits for using franchising to enter Bulgaria ?
 Requirement of fewer employee's
 Growth and development
 Limited risk.
2. Is franchising is the best market entry strategy to enter the Bulgaria market?
 Strongly Agree
 Agree
 Strongly Disagree
 Disagree
3. What is the other best way through which the organization can enter into the new market?
 Merger
 Acquisition
 Joint Venture
 Licensing
4. What are the main issue which are faced in the franchising System?
 Capital
 Infrastructure
 Finding right Human Resources
5. According to you what are major disadvantage of adopting franchising strategy ?
 Cost may be higher
 Franchisor may go out of the business.
 Difficulty in selling the franchise
 All the above
6. Is the culture of the host country affects the decision of selecting the Franchising?
 Yes
 No

 May be
7. What are the factor which influence the organization to used the franchise system to expand?
 Competitive advantage
 Goodwill of the franchising company
 Need in the local market
8. What are the internal issue which are face by the organization at the time of adopting
franchising system?
 Employee Support
 Stakeholder Support
 Technology
9. What are the best way to overcome the problem of the Franchising System?
 Understanding the New Technology
 Developing Human resource
 Restructure of the organization
10. Recommended the ways through which the burger king can overcome the problem?
DATA ANALYSIS
Theme 1: Knowledge about the process of Franchise
1. What do you consider to be key benefits for using franchising to enter Bulgaria ? Frequency
Requirement of fewer employee's 17
Growth and development 2
Limited risk 1