E-Strategy and Soft Landings for Franchising in Emerging Markets

Abstract

International franchising as a global growth strategy, especially in emerging markets, is gaining popularity. For example, the U.S. Commercial Service estimated that: (1) China, having over 2,600 brands with 200,000 franchised retail stores in over 80 sectors in 2007, is now the largest franchise market in the world; (2) India, having over 70 international franchise operations successfully operating with an investment of $1.1 billion and sales turnover of $2.7 billion in 2009, has made franchising the second fastest-growing industry in the country. The popularity of franchising continues to increase as the world witnesses an emergence of a new e-business model, Netchising, which is the combination power of the Internet for global demand-and-supply processes and the international franchising arrangement for local responsiveness. The essence of franchising lies in managing the good relationship between the franchisor and the franchisee. In this chapter, the authors show that e-business strategy plays an important role in growing and nurturing such a good relationship. In addition, the chapter discusses how an effective e-strategy can help a growing franchise go abroad to emerging markets through soft landings to reduce risks and costs.