Discuss about purpose of the current study is to analyse the differences between single-unit franchisees (SUFees) and the Multi-unit franchisees (MUFees)?
Multi-unit franchisees are the franchisees (MUFees), specialized for utilizing more than one franchise within a franchise system. Such system signifies a dominating and a pervasive franchisee ownership structures in different industries. Most of the literature or studies have been developed by concentrating more on single-unit franchisees (SUFees). This is because most SUFees is one of the most popular franchisee structures. The key goals of the article include comparing MUFees and SUFees introspectively concerning to various factors and conditions. Such conditions include (1) Significant factors considered by the franchisees, while purchasing a franchise at the initial moment, (2) justifying how such considerations are changed, while SUFees transformed to Multi-unit franchisees, (3) justifying the ways of characterizing the relationship between SUFees and Multi-unit franchisees with their franchisors concerning to relational constructs. The research data revealed that there are significant distinctions between Multi-unit franchisees and single-unit franchisees concerning purchase motivations and relational sentiments. Most significantly, most of the franchisor prefer utilizing multi-unit franchising. In spite of the fact, single-unit franchisees differentiate their dyadic relationships with relevant franchisors, as additionally relationally related to Multi-unit franchisees counterparts.
This is a business model for related owners in sharing common brand name. Parent company mainly allows entrepreneurs for using the strategies of the company as well as trademarks for the same. Franchisee needs to pay fee for support mainly including adverting as well training for the franchising agreement (Dhingra & Parker, 2015). Potential revenue is limited for the parent company and earnings in the new store in an overall manner. Franchises help in offering pre-opening support like site selection, financing, and training as well as related grand-opening program. Addition to that, franchises mostly offers ongoing support for training national as well as regional adverting operating procedures (Barringer, 2012). It includes operational assistance, management support as well as increased spending power in the most appropriate way. There is cordial relationship between the suppliers prevailing in the business enterprise. There is less risk and business failure in the franchising model in an overall manner. It is important to understand the fact products and services ensures prior establishment in the market share. There is no need for immediate market testing in the near future (Dada, Watson & Kirby, 2015).
Single-unit franchising ensures new brand entrepreneur for responding with the business unit. It mainly includes the daily operations of the business enterprise (Beckmann & Zeyen, 2014). This franchisee typically ensures territory division for covering units of operations in the most appropriate way.
Multi-Unit Franchises helps in creating opportunities for opening one more unit. Multiple units mainly sell reduced rates for various operations units in franchisee partake for understanding the day-to-day activities of the business enterprise (Mariotti & Glackin, 2014).
Organization Structure displays the hierarchy of people and related functions. This mainly indicates the character of an organization and believing values in an overall manner (Vallejo, 2015). Organization Structure helps in task allocation, coordination as well as supervision of achieving the organizational aims as well as objectives in the most appropriate way.
Relationship Marketing helps in maintaining long-term relationship with the customers. It mainly tries for encouraging relationship marketing and fostering on customer loyalty programs in an overall manner. It mainly provides exemplary products as well as services in an overall manner (Dant et al. 2014). It includes advertising practices for focusing on the single transaction. This particular marketing
It is necessary for striving for new goals and motivating for current economic attributes. It is advisable for selecting franchisee opportunity for pursuing own business activities. It helps in tracking the success rate and ensuring strong brand name in an overall manner (Mignonac et al. 2015). It includes training programs and enhancing ongoing operational support in the most appropriate way. It requires essential marketing assistance as well as real estate assistance for carrying future business activities in an overall manner.
Entrepreneurship ensures development of the business and coming with new ideas as well as opinion for the same. Entrepreneurs should possess risk-taking ability in handling the future consequences in the most appropriate way (Méndez, Galindo & Sastre, 2014). It mainly turns the ideas into profitability terms for execution of business activities in an overall manner. It includes capacity and willingness for developing, organizing as well as learning new business venture for undertaking risks in the near future.
Dependence Theory mainly includes colonialism as well as neo-colonialism. It helps in continuation for economic dependence on various explorations of related colonial countries in an overall manner. It causes global poverty for development for the wealthy countries like foreign debt as well as foreign trade for the same (Paswan & Rajamma, 2016). This particular theory involves issues like more emphasis on the theoretical framework in the most efficient way. Most of the dependency theorist involves international capitalism for forcing motive behind the actual dependency relationships in an overall manner. Historical research mainly ensures contemporary underdevelopment for the related historical product for maintaining economic relations in the metropolitan countries (Gillis, Combs & Ketchen, 2014). Relationship Marketing helps in involvement for improving in the internal operations in the near future. Most of the customers stop using products and remain frustrated particularly with the customer service. Business streamlines uses the internal operations for satisfying the needs as well as expectations of the customers and rendering reliable information in an effective way.
Franchising is considered a big business in the retailing field such that US holds 3,000 franchises operating over 300 business lines such that the count represents estimation of 901,093 franchise and company owned outlets generating $868 billion in payroll. The data provides an employment of 18 million people with 20 people employed in each franchise and generating a maximum total output of over $2.1 trillion, which equals to extra 10% of the private sector economy of US (Glackin, 2013). However, franchising is one part of the American invention that has been cited as one of the fast growing export based economy in the world. In addition, to the huge growing portion of modern retailing with remarkable public policy represents a mixed and asymmetrical complex behavioral phenomenon with reference to some research context.
Single Unit Franchising in US seeks to compare on the factor considering initial purchase of the franchise system and the initial consideration when single unit changes into multi unit franchise and the relationships between the two (Mishra, 2015). However, if analysed according to statistical analysis, single unit franchise brings inline the importance of franchisor strategy, financial benefits, the higher levels of multi unit franchise in the counterparts accompanied with statistical power and large effect sizes when compared to multi unit franchises. However, when seen on ANOVA, the main effect of classification disappears under the outcome of measures.
The determinants of second franchise purchase is based on the prior consideration that large effect sizes are categorized sing Cohen’s benchmarks of high statistical power. Although, multi unit franchise deem for more freedom and independence by capturing the pervasive effect of the expanding dependence reactions and expecting more respect from the franchisor. However, according to the analysis it can be based on the multi unit franchises rate of dependence lower than that of single unit franchises (Nijmeijer, Fabbricotti & Huijsman, 2014). Nevertheless, findings are based on the de facto experience with a more realistic sense of latitude that the franchisors are supposed to accord the franchises.
The relational strength of the two franchises depicts that out of the two franchises single unit franchise delivers more trust, commitment and relationship satisfaction between the two parties (Bruton, Ketchen & Ireland, 2013). In addition, it brings in notice that single unit franchises are more involved in daily operations and multi unit franchise are more restricted in seeking managerial complexities and with the effect of operating in more than one unit.
Motivations of franchise business are based on the implementation of the investment into starting a business that is primarily difficult to generate in employee. The motivational incentive from the perspective of multi unit franchise is generally based on empowerment, economies of scale, capital availability and risk indifference and entrepreneurial orientation (Iyer et al. 2015). However, after analysis it was brought in consideration that multi unit franchise are more entrepreneurial motivation driven than single unit franchise because it involves more managerial complexities than single unit franchise. One more consideration has been brought through analysis that there is positive association between multi unit franchise and purchase of multiple units for the desirability of intra-firm competition.
There are core arguments that provide the link between single unit and multiunit franchise and the franchisor experience that closely remain parallel for deriving financial benefits that are analysed to be higher in multi unit franchise and emphasizes the importance of operational experience with longevity and market performance of the firm. However, te amount of suitable entrepreneurs are limited in experience and capital capability that can gain reasonable amount of success via franchising. Moreover, the analysis shows that single unit franchises are presumably more dependent on the franchisors and require more counselling (Croonen, Brand & Huizingh, 2014). Single unit franchises are not attractive and experienced that could provide suitable training when compared with multi unit franchises. However, the discussion can be bring light to multi unit franchises that have prior experience in business and assumes to provide a greater role in mentoring for inexperienced and dependent single unit franchises by providing with continuous support in management as well as daily operations.
A normal consequence of labour division constructs dependence within distributive arrangements and it absorbs a fundamental responsibility within the channel theory (Neumayer & Plümper, 2012). In addition, the Dependence involves various core channel assembles such as conflict, power and satisfaction (Denktas-Sakar & Karatas-Cetin, 2012). The most recognizable theoretical reasoning of French and Raven (1959) and Emerson (1962), which hypothesize dependence theory as the power inverse, can trace the linkages behind the core arguments (Voss & Brettel, 2014). In terms of dependence theory perspective, single-unit franchisees with a noteworthy amount of investments in the franchise business, personal savings, limited past business experience would be more dependent on the franchisors than the Multi-unit franchisee counterparts (Denktas-Sakar & Karatas-Cetin, 2012). Dependence will have an overarching impact on deciding how SUFees and Multi-unit franchisees perceive strategies of the franchisors, financial profit and franchisor experience of the franchisors. Multi-unit franchisees are ubiquitous and dominant in many segments of franchising. However, systematic investigations concerning to the differences between MUFees and SUFees are rare (Peterson & Philpot, 2013). Even after testing a series of hypotheses on MUFees and SUFees through the implementation of the overarching theoretical framework of dependence theory, the intervening aim of the research was to offer grounded descriptive literature on franchisee. The viability of understanding the dissimilarities between the Multi-unit franchisees and single-unit franchisees are supported by the research data through the lenses of dependence theory (Qian, Ma & D’Mello, 2012).
From the above analysis, it is easy to gather reliable information on the selected articles. The article includes examination for single unit franchises versus multi unit franchises. It explains the concepts and terminologies for giving broad explanation on the related topic for franchising as well as entrepreneurship. Analysis and findings helps in gathering the facts on the concepts for franchising issues and advantages for the same. The article represents systematic investigation between MUFees and SUFees for bringing the level of confidence. It mainly relates with enhancement of longitudinal data as well as dyadic data. It involves the demographic variables for the past self-employment history in the annual sales turnover in an overall manner. Organizational form mainly focuses on the statistical comparison for the current investigation process in an effective way. Generalisation of findings notes the growing maturity as well as sophistication for the franchising operations in Australia. Findings include developed economies and relate cross-national investigation for analysis in the most appropriate way.
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Voss, U., & Brettel, M. (2014). The Effectiveness of Management Control in Small Firms: Perspectives from Resource Dependence Theory. Journal of Small Business Management, 52(3), 569-587.
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