Fanchisors Do Not Like To Take On Entrepreneurs As Franchisees Case Study
Discuss this statement, giving sound reasoning why this statement might be true and countering with arguments against the statement?
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An “Innovation vs. Replication” report compared the financial performance of 500 firms varying in size and found that small businesses with business models centred on low levels of replication and high innovation, showed more growth than models with high levels of replication. Additionally, they also found that large businesses with only high levels of innovation and low levels of replication had a lower average financial position (Aspara 2009). This reflects how statistically it would work against the favour of a large franchise to adopt innovative entrepreneurs, whilst also presenting a counter-point portraying enterprising individuals as promoters for growth and financial stability for smaller franchises. This isn’t always the case though, presented in the franchise Krispy Kreme with its “boom” stage in the early 2000’s. Being a rapidly growing donut franchise it had entrepreneurs from around the world wanting to become part of this international business. However, due to the lack of care when choosing franchisees and with growth as their only concern, issues with proximity caused cannibalising sales as a result of capitalising their own popularity (Morebusiness.com …show more content…
Innovation vs. Replication. Business model innovation vs. replication: Financial performance implications of strategic emphases. 1, 6,7
Diebold, J. D, 1990. The Innovators: The Discoveries, Inventions, and Breakthroughs of Our Time. 1st ed. New York: Plume.
Entrepreneur.com 2013. Innovators | Entrepreneur.com. 2013. [ONLINE] Available at: http://www.entrepreneur.com/innovators/index.html. [Accessed 24 January 2013].
Francis K.A. Demand Media. 2010. Innovation Vs. Replication in Franchises. [ONLINE] Available at: http://smallbusiness.chron.com/innovation-vs-replication-franchises-198.html. [Accessed 23 January 13].
Libava 2012, The Top Traits of Successful Franchise Owners | Entrepreneur.com. 2013. [ONLINE] Available at: http://www.entrepreneur.com/article/224016. [Accessed 23 January 2013]. Also see Definition Of A Franchise. 2013 [ONLINE] Available at: http://www.thefranchiseking.com/definition-of-a-franchise. [Accessed 24 January 2013]
McArthur, R M, 2012. President of WSI Internet Marketing Franchise. Can Franchising and Innovation Go Hand in Hand? (See Wilson 2012)
MoreBusiness.com. 2013 . Learning from the Franchising Mistakes of Failed Krispy Kreme | MoreBusiness.com. [ONLINE] Available at: http://www.morebusiness.com/franchise-risks. [Accessed 23 January