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RES310 Research Project

Published : 31-Aug,2021  |  Views : 10

Question:

The main aim of this research is to identify the future scope of franchise business model in Australia. In order to fulfill the main research aim following objectives have been designed:

  • To understand the concept of franchise business model
  • To explore the types franchise business in Australia
  • To identify the benefits of franchise business in Australia
  • To evaluate the superiority of franchise business model then other kind of business model
  • To explore the present growth of the franchise business in Australia.

Answer:

The purpose of the first two assignments was to analytically study the history of the franchise business and to assess the future possibilities of it in the country. The Franchise business is budding business model in Australia (McDermott, Boyd, & Weaver, 2015). Since its genesis in the 1970’s it has been adopted as business model in diverse industries around the country (McDermott, Boyd, & Weaver, 2015). Various sectors and industries have developed this model according to their business goals and target to achieve success in the market.  

The previous two assignments were research proposals on the future of franchising in Australia. The significance of the franchise business can be assumed by its enormous success in Australian economy. Franchise business is a term used for a particular form of private entrepreneurship (McDermott, Boyd, & Weaver, 2015). The franchise business is about selling the rights of a branch to a buyer through an agreement to expand the business in various locations. In this form of business system, the Company owner signs a contract with the buyer of the particular branches (McDermott, Boyd, & Weaver, 2015).  These branches own the rights to use the company name and sell the products of the company in their store or outlets.

This form of business system has been applicable in various industries like service industry, automotive industry, real estate, restaurants and food joints, retail industries, hotel and lodging industry, cab industry and many others (McDermott, Boyd, & Weaver, 2015). In the fifties and sixties the franchise business model was restricted to the petroleum and automobiles (Dant & Grünhagen, 2014). However, the entire scenario started changing from the 1960’s and 1970’s. The market observed a flourishing investment in the sector (Dant & Grünhagen, 2014). The last two papers emphasised the franchise business in the country (Dant & Grünhagen, 2014).

Argument

Franchise business model has become a huge phenomenon in Australia. It has established itself in the sectors of export, joint venture, subsidiary, licensing, strategic alliance and many other innovative business models (Alabi, Awudu, & Duncan, 2015). The success of franchise business should be assessed properly in order to understand overall business sector in Australia. Franchise business is diversely utilised by various business organisations of different sectors (Dant & Grünhagen, 2014). This diversity should be analysed properly to measure and evaluate the reason behind the triumph of franchise business in Australia (Alabi, Awudu, & Duncan, 2015). This evaluation also analyses the positives of franchise business for which it edges out all other business models in Australia (Alabi, Awudu, & Duncan, 2015). The advantages of the franchise business model would be instrumental in estimating its overall impact on a business project in terms of products, services and marketing (Martins, Rindova,  & Greenbaum, 2015).

The estimation of the future of this presently successful model is also discussed in the first two research studies (Curtis, 2016). The research proposal also includes the impact of franchise business model on the small and medium enterprises and other entrepreneurs (Curtis, 2016). The proposal emphasises on the small and medium enterprises as it is one of the important sectors which helps in balancing the economy in a country like Australia (Martins, Rindova,  & Greenbaum, 2015). It produces a large number of employments in an economy and boosts the service sector of a country (Cavusgil et al., 2014). Hence, this argument is used in the research proposal.

Purpose statement

The research proposal mentions all important purpose of the project on the future franchising in a specific and detailed form. The purpose of the research is to analyse the concept of franchise business, to collect the information about the various types franchise business models which exists in the down under, to evaluate the positives of this business model, to establish the advantages of the model which surpasses all other counterparts of franchise business and to display the present economic boom in the franchise business.

Limitations

The research proposal includes the probable limitations of the research in the report. The main limitation is described as the limited time frame which is allotted for the research. As the research is diverse it requires a lot of expertise in the matters like sampling and in framing the conclusion of the research properly (Martins, Rindova,  & Greenbaum, 2015). Framing a profound conclusion is very difficult task as the research requires an elongated process of collecting and assessing the facts (Wynstra, Spring & Schoenherr, 2015). Evaluating the future scope of the franchise business in Australia is based on certain assumptions, facts and data. These forms of prophecies are often proved wrong along with time.  These prophecies are primarily based the present situation of the business, the facts and findings and its assessment by the researcher (Cavusgil et al., 2014). Hence, the profoundness of the research remains one of the limitations of the research.

Gaps in Literature

A review of literature is termed as perfect or profound when it covers all the areas or aspects of the arguments and purposes of a research study Merriam, S. B., & Tisdell, E. J. (2015). However, the topic of franchise business model and its future in a large economy like Australia is difficult to evaluate in literature review. For the specific requirement of time and word limit, it was not possible to include all the information about various forms of research materials on different kinds of franchise business in the down under (Merriam & Tisdell, 2015). It was not possible to include all the emerging brands, small businesses and many other industries which has adopted into this form of business model.

Methodologies

The philosophy of the research mentioned in the proposal is positivism and interpretivism to explore both quantitative and qualitative data (Taylor, Bogdan, & DeVault, 2015). The research utilises both inductive and reductive approaches to reach a holistic result in the study (Taylor, Bogdan, & DeVault, 2015). The research includes both qualitative and quantitative information in order to reach better results. The methodology includes that the sample size is 50. The samples are collected from fifty different franchise business organisations (Taylor, Bogdan, & DeVault, 2015). The research includes both primary and secondary data of franchise business.

The primary research method includes face to face interviews and survey questionnaires through emails and other mediums. (Yilmaz, 2013).  The face to face information and survey questionnaires will have their own utility in the research (Yilmaz, 2013). The research proposal also mentions that the data analysis will be done on the basis of mathematical tools, authentic business reports, economical and financial research studies. The use of SPSS regression, Z test, analysis of correlation and meaningful information will be utilised in analysing the data. These uses of these assessing tools will be instrumental in providing an insight to the subject of the research proposal (Silverman, 2016).

Franchise business

The franchise business is a business design in which a private investor buys the rights of manufacturing, distributing, marketing and selling the products and services in the name of the original brand. The genesis of franchise business happened in the United States (Wynstra, Spring & Schoenherr, 2015). The franchise agreement generally consists of the type of operations to be conducted and the type of products and services to be offered by the company. Issac Singer was the first entrepreneur who implemented this business idea for the distribution of sewing machines in different localities. The primary advantage of this business model is that it helps in the expansion of the business in terms of geographical boundaries and customer base.

The literature review extensively discusses about the conceptual strategy of the franchise business. The stability of a franchise business is dependable on the owner of the brand. The franchise owners and the share holders depend on the decisions of the owner of a brand.  A franchise business works well, only if the brand owner collaborates with the franchise owner communicates and collaborates with the Franchise owners (Wynstra, Spring & Schoenherr, 2015). The decision making body should be democratic in the process as every stake holder or franchise owner’s investment is indirectly dependent on the decisions taken by the brand owner.

The factors like the brand quality, pricing and the supply of the products are directly dependent on the strategy of the brand owner (Wynstra, Spring & Schoenherr, 2015). The literature review also discusses that there are more than seventy thousand franchise businesses in Australia. According to Bebchuk, the sales have touched the mark of 131 billion Australian dollars in the recent years (Gillis, Combs & Ketchen, 2014). The growth of franchise business through the decades of eighties and nineties has been the predominant factor in the history of Franchise business. After the Commonwealth Petroleum retail franchise in 1980’s, the country has observed enormous transformation in terms of adapting new business models in almost every sector of Australian business (Gillis, Combs & Ketchen, 2014).

The primary advantage of franchise business has been mentioned in the literature review has been in resolving few key aspects of business (Pepper & Gore, 2015). The problems like scarcity of resources, customer servicing by answering to their queries and maintenance of the agency theory (Pepper & Gore, 2015). Agency theory defines the relationship between two common agencies, in this case agencies of a business. In case of franchise business the two agents, principle (brand owner) and the franchise owners (agents) gets entangled in a relationship in order to maintain the stability of the business. The customer servicing depends on the franchises of the brand and hence, the responsibility of maintain a good relationship also depends on them (Frazer, & Terry, 2015). The amount of resources is met properly due to the reach of the franchise in to the interiors of the market. Most of the franchises are capable of manufacturing their products. These franchises manufacture products according to their requirement. Hence, the problem of scarcity of the products gets resolved in a franchise business model.

The argument of the research proposal and literature 

The argument of the research proposal is to analyse the phenomena of franchise business in Australia. The first assignment is a research proposal to analyse the future of flourishing franchise business in Australia, the forms of franchise business which exists in the country, benefits of this business system and the present success achieved through this model (Trappey & Trappey, 2015). It is significant to study the consequential growth of 3.4 percent in the sector of Franchise business in order to unravel the facts of Australian economy (Trappey & Trappey, 2015). The assignment also includes the issues which are to be discussed in the research. It includes the assessment of the current growth of the research, advantages of this business model, the future scope and the utilisation of this business model by the Small and Medium enterprises (Trappey & Trappey, 2015).

  The literature review tends to assess the information about the growth and success of franchise business in Australia. The second assignment is a literature review on the same subject. The literature review includes the history of the franchise business in Australia. The second assignment discusses about the beginning of franchise business from the 1970’s and 80’s. The entry of KFC and McDonalds in Australia has been displayed as a mark of major transformation in Australia (Trappey & Trappey, 2015). The second assignment extensively discusses about the future of the franchise business by referring different experts like Bebchuk, Coichet, Garg and Cavusgil (Trappey & Trappey, 2015).

Adoption of franchise business model in Australia

According to Forbes Australia, franchise business model has been utilised in sectors like Automobile industry, Professional and Advisory services, Coffee and Restaurant business, Fitness industry, Tourism industry, Retail industry, financial services, Education and Coaching centres, Computer and Internet industry and many more (Trappey & Trappey, 2015). A franchise is bought by a business man from the original company. The franchise is set up primarily according to geographical area. It includes the aspects of manufacturing, marketing and sales. All these responsibilities are utilised by the franchise owner under the brand name. The agreement between the franchise owner and the Brand owner allows the franchise to keep the rights of production, marketing, distribution and sales to itself (Trappey & Trappey, 2015).

In the last three decades the feasibility of franchise business in Australia has been established by through the growth of the franchise businesses in the business sector of Australia. Along with the exciting growth rate the franchise business sector has also ensured the sustainability and credibility of the brands and its products. These brands have ably reached the interiors of the country and proved their viability and demand among the people of the country through this business model. The churning success stories of the first time investors and entrepreneurs have been the highlight of business stories in Australia (Trappey & Trappey, 2015). A leading website of Australia includes such stories of success. One such example is the success of David Fenech in the industry of battery (Trappey & Trappey, 2015). The expansion in the business of battery retailing has been proved as one of the major boost to the battery business. The expansion through the increasing number of stores is one of the success stories about the achievements of franchise business in Australia.

Conclusion

The initiated research on the franchise business model in Australia is a study of a business model used by a huge number of organisations around the country. The model of business franchise is used in the sectors like automobile, financial services, restaurant and food joints business and others. This model is humongous successful because of resolving the issues of scarcity of materials, customer services and the stability of the principle and agent relationship. The report includes an insight to the research proposal and the literature review on the subject. The data collection of this process depends on both the primary and secondary sources. The primary sources are collected by interviews and questionnaires.

The primary recommendation in the research proposal is to give more importance to the direct interviews. As it is assumed that the direct interviews provide authentic responses unlike the collecting information from the questionnaires. Another recommendation is to properly match the secondary data with the primary data in order to evaluate the process of the research.

References

Alabi, G., Awudu, H. I., & Duncan, A. E. (2015). Relationship between expansion strategy and growth of charismatic churches in Ghana. Journal of Business Research, 9(1), 74-84.

Buchan, J. (2016). Government Policy to Support Franchisees. Government, SMEs and Entrepreneurship Development: Policy, Practice and Challenges, 227.

Cavusgil, S.T., Knight, G., Riesenberger, J.R., Rammal, H.G. and Rose, E.L.,( 2014). International business. Pearson Australia.

Curtis, V. (2016). Small Business For Dummies-Australia & New Zealand. John Wiley & Sons.

Dant, R. P., & Grünhagen, M. (2014). International franchising research: Some thoughts on the what, where, when, and how. Journal of Marketing Channels, 21(3), 124-132.

Gillis, W. E., Combs, J. G., & Ketchen, D. J. (2014). Using resource?based theory to help explain plural form franchising. Entrepreneurship Theory and Practice, 38(3), 449-472.

Leong, S. (2015). Franchise nations: a framework for analysing the roles new media play in Chinese provisional business migration to australia. Crossings: Journal of Migration & Culture, 6(1), 103-119.

Martins, L. L., Rindova, V. P., & Greenbaum, B. E. (2015). Unlocking the hidden value of concepts: a cognitive approach to business model innovation. Strategic Entrepreneurship Journal, 9(1), 99-117.

McDermott, M. J., Boyd, T. C., & Weaver, A. (2015). Franchise Business Ownership: A Comparative Study on the Implications of Military Experience on Franchisee Success and Satisfaction. The Entrepreneurial Executive, 20, 9.

Merriam, S. B., & Tisdell, E. J. (2015). Qualitative research: A guide to design and implementation. USA: John Wiley & Sons.

Pepper, A., & Gore, J. (2015). Behavioral agency theory: New foundations for theorizing about executive compensation. Journal of management, 41(4), 1045-1068.

Silverman, D. (Ed.). (2016). Qualitative research. Sage.

Taylor, S. J., Bogdan, R., & DeVault, M. (2015). Introduction to qualitative research methods: A guidebook and resource. John Wiley & Sons.

Trappey, C. V., & Trappey, A. J. (2015). Collective intelligence applied to legal e-discovery: A ten-year case study of Australia franchise and trademark litigation. Advanced Engineering Informatics, 29(4), 787-798.

Wynstra, F., Spring, M., & Schoenherr, T. (2015). Service triads: A research agenda for buyer–supplier–customer triads in business services. Journal of Operations Management, 35, 1-20.

Yilmaz, K. (2013). Comparison of quantitative and qualitative research traditions: Epistemological, theoretical, and methodological differences. European Journal of Education, 48(2), 311-325.

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