INTRODUCTION
With the decision to carry out a business internationally, there are several issues arising which managers have to take into account and which they have to find an optimal solution to. One of the questions companies are facing while planning to spread their business is the question on the operation mode. What kind of possibilities of becoming international do we have, what are the advantages and disadvantages come along with the different kind of possibilities and which one, finally, fits best to our company? To goal of our term paper is to investigate one of the different operation modes companies can choose, also on their domestic market, but especially when carrying out operations on international markets. To introduce the method of franchising, we will present the most important knowledge on this topic in the next chapters.
Beginning with the theoretical part, we are giving an overview on the history and development of franchising, “how did it start and where is it going?” Followed by that, the method of franchising as it is applied nowadays is explained very carefully. We are giving answers on what franchising is, what role it is playing in the process of the internationalization of a firm and the different modes of franchising. Additionally, the situation on the franchising market in three different regions, Europe, Germany and the United States are presented. Based on the theory, we are taking the subject a step forward by investigating a real franchising case from the practical life. The company we chose is the worldleading sandwich restaurant chain which is operating not less than 26,000 restaurants worldwide through franchising. The company will be introduced briefly before we start to show how franchising works at Subway, what comes along with becoming a franchisee of Subway, like requirements which have to be fulfilled and, probably the most interesting part, the financial flow between the franchisee and Subway as franchisor. So the reader gets especially a view on how Subway is earning money even though they are not running their restaurants directly by themselves. This will be followed by the explanation of the franchising mode used by Subway and the key success factors which are critical for Subway to become such a great example on the applicability of franchising to internationalize a company.
Inhaltsverzeichnis (Table of Contents)
- 1. INTRODUCTION
- 2. THE THEORY OF FRANCHISING
- 2.1 The development of franchising
- 2.1.1 Origin of the Franchising Term
- 2.1.2 Development of the First Franchise Systems
- 2.1.3 Development of the Modern Franchising
- 2.1.4 World-Wide Break-Through of Franchising
- 2.1.5 Future Prospects for Franchising
- 2.2 The Franchising System
- 2.2.1 Overview
- 2.2.2 Direct Unit Franchising
- 2.2.3 Master Franchising
- 2.2.4 Direct Subsidiary Franchising
- 2.3 Advantages and Disadvantages of Franchising
- 2.4 Franchising Situation in Three Chosen Markets
- 2.4.1 Europe
- 2.4.2 Germany
- 2.4.3 USA
- 2.1 The development of franchising
- 3. FRANCHISING IN PRACTICE: “The Subway Case”
- 3.1 Introduction
- 3.1.1 Company Background
- 3.1.2 Products
- 3.1.3 Distribution System
- 3.2 Franchising at Subway
- 3.2.1 Franchising Operation Mode
- 3.2.2 Constraints and Support
- 3.2.3 Key Success Factors
- 3.3 Internationalization
- 3.1 Introduction
- 4. CONCLUSION
Zielsetzung und Themenschwerpunkte (Objectives and Key Themes)
This term paper investigates franchising as a method of internationalization for firms. It aims to provide a comprehensive overview of franchising, including its historical development, current practices, and advantages and disadvantages. The paper will also analyze a real-world case study of Subway to illustrate the practical application of franchising in international expansion.
- The historical development and evolution of franchising.
- Different models and operational modes within franchising systems.
- Advantages and disadvantages of franchising as an internationalization strategy.
- A case study analysis of Subway's franchising model and its success factors.
- The role of franchising in international market penetration.
Zusammenfassung der Kapitel (Chapter Summaries)
1. INTRODUCTION: This introductory chapter sets the stage for the paper by outlining the challenges companies face when internationalizing and highlighting the importance of choosing the right operational mode. It introduces franchising as the focus of the study and previews the structure of the paper, promising a theoretical overview followed by a practical case study of Subway.
2. THE THEORY OF FRANCHISING: This chapter provides a detailed theoretical background on franchising. It traces the historical evolution of franchising from its medieval origins in France to the modern business format franchising prevalent today, emphasizing the shift from simple product distribution to comprehensive system replication. The chapter explores various franchising models (direct unit, master, and direct subsidiary franchising), analyzes their advantages and disadvantages, and provides a comparative overview of the franchising landscape in Europe, Germany, and the USA. The discussion lays a solid foundation for understanding the complexities of franchising and its application in international business.
3. FRANCHISING IN PRACTICE: “The Subway Case”: This chapter delves into a practical case study of Subway, a globally successful fast-food chain that leverages franchising extensively. It provides background information on the company, its products, and its distribution system, before examining Subway's specific franchising operation mode, including the support and constraints faced by franchisees. The chapter analyzes the key success factors contributing to Subway's international expansion through franchising, offering valuable insights into the practical application of this internationalization strategy. This section focuses on how Subway generates revenue while not directly operating its restaurants, offering a valuable financial model for analysis.
Schlüsselwörter (Keywords)
Franchising, Internationalization, Business Model, Operational Mode, Market Entry Strategy, Case Study, Subway, International Expansion, Direct Unit Franchising, Master Franchising, Direct Subsidiary Franchising, Advantages, Disadvantages, Global Business.
Frequently Asked Questions: A Comprehensive Language Preview on Franchising
What is the main topic of this document?
This document is a comprehensive language preview of a term paper investigating franchising as a method of internationalization for firms. It provides a theoretical overview of franchising and a practical case study of Subway's franchising model.
What are the key themes explored in the document?
The key themes include the historical development of franchising, different franchising models (direct unit, master, and direct subsidiary franchising), advantages and disadvantages of franchising as an internationalization strategy, a case study analysis of Subway's franchising model and its success factors, and the role of franchising in international market penetration.
What does the table of contents include?
The table of contents covers an introduction, a theoretical section on franchising (including its development, various systems, advantages and disadvantages, and a comparison across Europe, Germany, and the USA), a case study on Subway’s franchising practices, and a conclusion. Each section is further broken down into sub-sections.
What is the purpose of the chapter summaries?
The chapter summaries provide concise overviews of each chapter's content. They highlight the key points discussed in each section, from the introductory context to the detailed theoretical explanations and the in-depth analysis of the Subway case study.
What is the Subway case study about?
The Subway case study examines Subway's successful use of franchising for international expansion. It analyzes the company's background, products, distribution system, franchising operation mode, constraints and support for franchisees, and key success factors. The case study focuses on how Subway generates revenue through its franchising model.
What are the advantages and disadvantages of franchising discussed?
The document discusses both the advantages and disadvantages of franchising as a business model and an internationalization strategy. While the specific advantages and disadvantages are not explicitly listed in the preview, the inclusion of this topic suggests a thorough exploration within the complete term paper.
What are the different franchising models explained?
The document explains different franchising models, including direct unit franchising, master franchising, and direct subsidiary franchising. The differences and suitability of each model are likely elaborated within the full term paper.
What is the historical development of franchising covered in the document?
The historical development of franchising is traced from its medieval origins to its modern form, highlighting the evolution from simple product distribution to comprehensive system replication. The timeline likely includes key milestones and significant changes in the franchising landscape.
What are the key words associated with this document?
Key words include Franchising, Internationalization, Business Model, Operational Mode, Market Entry Strategy, Case Study, Subway, International Expansion, Direct Unit Franchising, Master Franchising, Direct Subsidiary Franchising, Advantages, Disadvantages, and Global Business.
What is the overall objective of this term paper?
The overall objective is to provide a comprehensive overview of franchising as an internationalization strategy for firms, combining theoretical understanding with a practical case study to illustrate its application and implications.
- Quote paper
- Peter Strehle (Author), Göksen Iyiköy (Author), Henning Isbrecht (Author), 2005, FRANCHISING as a method of internationalization - SUBWAY case, Munich, GRIN Verlag, https://www.grin.com/document/37396
