Franchising as a tool for small medium sized enterprises (SME) development in transitional economies ‐ the case of central European countries

Abstract

Assesses the benefits and limitations of franchising as a tool for the development of small‐to medium‐sized enterprises (SMEs); focuses on the use of franchising in transitional economies, with particular reference to central European countries. Reveals that franchising ‐ with its numerous advantages over conventional market entry ‐ has played a significant role in the development of SMEs in the industrialized West and transitional economies in general, but that in central and Eastern Europe the uptake of franchising has been negligible. Identifies that there are reasons, particular to these countries, including ‐ inter alia ‐ political, organisational, cultural, economic and legal, which make the use of franchising unattractive to both foreign and domestic franchisors; outlines the evolution of indigenous franchising in other transitional economies, citing successes in Asia. Summarizes the challenges facing Central European countries in realizing the potential of franchising in the development of SMEs, and suggests further areas for research.

Citation

Sanghavi, N. (1998), "Franchising as a tool for small medium sized enterprises (SME) development in transitional economies ‐ the case of central European countries", Management Research News, Vol. 21 No. 11, pp. 35-44. https://doi.org/10.1108/01409179810781446