PROBLEMS AND PROSPECTS OF FORMING REGIONAL FRANCHISE NETWORKS

Keywords: regional business environment, franchise networks, franchise, rights holders, gross regional product, survey

Abstract

The goal of this work is to determine the prerequisites for developing a franchise at the regional level, to analyze the areas for small and medium-sized businesses in which franchising is successfully applied, to define the reasons of distrust among Lviv region entrepreneurs to apply and grow franchise networks and to outline the prospects for franchise regional development. The economic nature of franchising makes it attractive to different network players: large firms, small businesses and the region as a whole. That is why the author has highlighted the conditions for franchise regional development. The study focuses on the case of economically developed Lviv region, which has an extensive infrastructure. To this end, it has analyzed the all-Ukrainian and regional sectoral structure of franchising. In order to identify the specific features of franchise network regional development, owners and managers of small and micro businesses in Lviv region were surveyed. Summarized results of the survey allow the author to define national and regional reasons for franchise development, and the industry structure of franchise networks in Lviv region. Answers of entrepreneurs in trade and service have been separated and systematized to estimate the level of satisfaction with working in different franchise networks. The study of regional entrepreneurs' loyalty by means of consumer support index has also been conducted, which showed negative attitude of regional entrepreneurs towards franchising for their own business development. An important conclusion is a lack of tangible support by the state in developing regional franchising. The most restraining factor for the franchise growth is the unregulated legal framework, personnel mismatch, and poor infrastructure for franchise development in the regions. The study allows the author to highlight specific features of franchise network regional development, advantages and main problems of the franchise system, to assess outcomes and prospects of regional franchising network development on the territory of Lviv region, and to propose measures with which to grow regional franchising.

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Published
2022-02-22
How to Cite
Danylovych-Kropyvnytska, M. (2022). PROBLEMS AND PROSPECTS OF FORMING REGIONAL FRANCHISE NETWORKS. Economy and Society, (36). https://doi.org/10.32782/2524-0072/2022-36-9
Section
ECONOMICS