Chapter - 1 INTRODUCTION

This chapter deals with the introduction to franchising, importance of the study,

objectives of the study, methodology, hypotheses, period of the study and organization

of the study.

1.1 Concepts of Franchising

Franchising is the practice of using another firm's successful business model. The

word 'franchise’ is of Anglo-French derivation - from franc - meaning free, and is used

both as a noun and as a (transitive) verb. Franchiser is the owner of an established

business, wishing to expand the business through a franchise. Franchisee is any

entrepreneur looking to start a business; with a franchise, the franchisee can quickly get

into a model of an established business, while reducing the risk and increasing the

Return on Investment (ROI). For the franchiser, franchising is an alternative to building

'chain stores' for expanding the business, while avoiding the investments and liability of

a chain. The franchiser's success depends on the success of the franchisees.

Franchising systems can be broadly divided into two types. One type of

Franchising is a relationship between the supplier and the dealer in which the dealer

agrees to acquire some of the identity of the supplier in order to become the preferred

source of the supplier’s goods. The second type, “Business Format” franchising is an

ongoing relationship between the franchiser and franchisee that not only includes

product, service and trademark, but also the entire concept of business.

1

Franchising has increasingly led aspiring entrepreneurs to realize their desires of

owning their own ventures. In India, franchising as a route of expansion has been

prolific across sectors as well as formats. Industry verticals like education, food and

beverages and clothing have been constantly leveraging their growth through various

product/service franchising concepts. On the steady path of growth, the game is

changing at a rapid pace. Investors are becoming much more cautious and to establish

long-term profitable partnerships, risk is shared both by the franchiser and the

franchisee.

1.2 Reasons for Getting into Franchising Business

Firms build brands over time spending lot of money and effort. As and when

they develop a sense that their brands have become strong and possess lot of unrealized

potential, they then tend to start discussing expansion. As pointed out earlier, when they

do not have the required resources and/or they do not want to risk their own finances,

they take to franchising route. This way, the growth of the brand and thus the revenue of

the franchiser can go to unimaginable levels and can achieve maximum coverage with

minimum risk and good revenue generation.

On the other side, an entrepreneur or firm, which does not have any new ideas,

patience or resources to build a brand of its own, chooses to enter into franchising

arrangement and intends to reap profits right form day-one. In this arrangement, the

franchiser and franchisee enter into a franchise agreement.

2

Following are few reasons for popularity of franchising business among current

entrepreneurs:

1. There's less risk involved than there is, in starting a business from

scratch. According to a study published by IFA (International Franchise

Association), the chances of a franchise surviving for over two years are 94%, as

opposed to 43% for an independent business.

2. Franchisees receive individual training in all aspects of running the

business. Initial training programs typically last from one week to three months,

depending on the size and sophistication of the operation.

3. In a franchise arrangement, the image and reputation in the marketplace would

have already been established. For instance, in 2012, McDonald's Corp. spent

over USD 2 billion worldwide on advertising and promotional campaigns

(Corporation 2012) to increase their brand visibility.

4. Ongoing technical and managerial support is the essence of all business format

franchise systems. This kind of support differentiates this type of franchise from

product and trade name franchisees, such as automobile dealerships.

5. Although fast food remains synonymous with franchising, service-oriented

franchisees in health care, home decorating, travel agencies and copier services,

are dotting more of the nation's (U.S.A.) streets and shopping malls. In fact,

service-oriented businesses have been leading the growth in franchising for the

last four years. “Now more SMEs (Small and Medium Enterprises) are

recognizing that franchising is a viable option due to availability of funding from

3

financial institutions and better awareness” as stated in WIF (Women in

franchising of franchise council of Australia)

1.3 History of Franchising in India

Historically, the 1980s were the formative years of the modern franchise boom;

and in the 1990s the industry was in adolescence maturing rapidly, but with plenty of

room to grow. It took a clear understanding of the relationship between the franchise and

the franchiser to achieve success by business format franchises during the past decade

worldwide. A strong, and management backing with solid financial resources is the

common reason for this stupendous growth and advancement in the franchise format by

all major companies of repute in India and overseas.

Franchising is in its early stages in India, and has become increasingly popular as

a means of doing business in the past few years. The international soft drink and hotel

franchisees arrived in India, as early as in the 1960s, but in 1977 the then government

expelled foreign brands from India but they started returning gradually from the mid

‘80s. In the ‘90s when the liberalization started and as the markets opened, foreign

franchisees started coming in but faced many hiccups along the way especially global

companies like KFC, Schweppes, etc. Since then, there has been progressive entry of

international franchisee and many have been successful with few exceptions.

The well-known companies relating to soft-drinks, ice-cream parlors and

restaurants include Pepsi, Coke, Baskin Robbins, Move n pick, Subway, McDonald’s,

TGIF, Taco Bell, Pizza Hut, Pizza, Domino’s Pizza, O’Brian’s Sandwich Bar have a

4

stabilized franchise model. Rental franchises such as Mark & Spencer, Westside, Evita

Peroni, Pepe Jeans and Adams are also doing well. The Indian companies who ventured

into franchising business very early were courier companies like First Flight, Blue Dart

and DTCDC along with computer and software training franchises such as APTEC,

NIIT and STG etc. As the franchising model matured many other companies including

TATA, Reliance, Birla also started to get into franchising business post year 2005 and

they are aggressively pursuing that route and have been successful.

1.4 Franchising Relationships

An American franchising consultant Nicholas A. Bibby (Bibby, 2011) brought

out certain valuable observations and suggestions about franchising relationships. This

franchise article and the following perspectives on franchise and business relationships

emanate from Nicholas Bibby‘s dual experience of counseling individuals in both

business and personal issues. Bibby states that

1. Quality relationships (franchised or otherwise) are built on defined roles, consistent

behavior, trust, honesty, openness and support; but most of all, natural fit.

2. A realistic take on most franchise relationships and mutual respect is required

between the franchisers and the franchisees.

The franchiser-franchisee relationship always begins with the parties coming

from two totally different levels of experience, knowledge; insight and power therefore

are bound to have different viewpoints.

The following is what the IFA (International franchise association) says about

5

franchiser-franchisee relationship. “There are certain practices a franchiser can do

to enhance and develop the franchiser/franchisee relationship”.

1. Sharing the vision: The franchiser should share the personal vision of opportunity

and success which the franchise system offers. A franchisee being a family member

of the franchise system, deserve to be a part of the vision, which will become a

lifelong project for them. This vision should include a high desire to receive the

rewards of one’s work. This shared vision will become the focal point of the

relationship as they build to mutually develop in a harmonious and successful

franchise experience.

2. Active communication: A regular line of communication from the franchiser acts as

a guiding light for the franchisee. Franchiser often seeks to develop new products or

services, which might enhance the growth and prosperity of the business. A clear

communication system facilitates a bi-lateral flow of information with regards to

new products or service lines thereby improving the franchiser-franchisee

relationship. This communication could be in the form of mails, letters, newsletters,

conferences or even informal meetings.

3. “Total” training program: Training is the fundamental ingredient of a strong

relationship. Almost all franchisees require initial training to start the business. In

addition, refresher courses, as well as new training programs should be provided to

help improve the abilities of the franchisees and the franchisee’s staff. From time to

time Franchisees are desirous of obtaining self-improvement programs for

themselves as well as for their staff. The franchiser should provide training and

improvement programs which actually go a long way in enhancing the abilities and

6

capabilities of a franchisee.

4. Developing and sharing an aggressive growth plan: Both the franchisee and the

franchiser desire the business to grow, albeit some franchisees are ambitious and

would like to become multi-unit or master franchisees after opening their first unit.

They therefore would like to open a second or third unit in the same city or state.

Franchiser should always offer a plan for growth so that they can induce the

franchise to be an enthusiastic and vibrant organization. It is known that growth is

an elixir to the desires and appetites of teams wishing to become better.

Franchiser-franchisee relationship and conflicts between them are two sides of

the same coin of a franchising system. Relationships are not complete, nor can they be

well maintained unless the reasons for conflict between franchisers and franchisees are

traced. In other words, to run a good franchising system for a long time, maintaining

good relations and avoiding or minimizing conflicts between both the parties are

essential. Hence, it is recommended to identify and address the common causes of

conflicts that arise between them.

1.5 Pitfalls of Franchising System

Everything is fine if both the parties do not become over-ambitious to make

abnormal profits particularly at the expense of the other party. Often, the franchiser may

have a complaint that the franchisee is not taking as much interest as he should to

promote the brand, or does not invest as much as was expected originally, or the quality

standards of the brand or the services are not being maintained. This may eventually

7

result in the brand losing its sheen, more because of the doing or not doing of what was

expected of the franchisee than anything else.

Even the franchisee may have his woes and complaints against the franchiser. As

the franchise agreement is contractual in nature, the franchisee is not sure how long the

contract would last and when the franchiser would call it off. If the franchisee puts his

heart and soul in making the brand of the retail outlet famous in the area, and the

franchiser terminates the contract, the franchisee may have nothing left at the end of the

day.

1.6 Causes of Conflict in Franchise Relationship

Conflict can occur in any relationship, and franchising is no different.

Franchisees seek to grow profitable businesses in their relationship with the franchiser,

and franchisers seek to maximise their market coverage in their relationship with

franchisees. Both parties are drawn to the relationship for different reasons. Separate

studies of the causes of conflict between franchisees and franchisers found that there are

several acknowledged causes of conflict in franchise relationships, but that the relative

importance of those causes differs as per the consideration of one’s own perspective.

1.6.1 Lack of Support from Franchiser

From the franchisee perspective, lack of support from the franchiser had been

considered as the main cause of problems in the franchise relationship, while franchisers

ranked this as the second smallest contributing factor to conflict.

8

Of all the causes of franchise conflict acknowledged by both franchisees and

franchisers, the issue of support has been the one where both parties are poles apart.

Franchisees feel that the support they receive hasn't met their expectations, or is

too sparse to be particularly useful. In extreme cases, there has been the sense of

abandonment – that after the franchisee has invested their money with the franchiser;

they were largely left to fend for themselves.

On the other hand, franchisers are relatively comfortable with the level of

support they provide and don't consider this to be a primary cause of conflict in the

relationship. The clash of perspectives often boils down to a mismatch of expectations

by both parties prior to and at the commencement of the franchise relationship.

In their recruitment process, franchisers may make statements about the level of

support provided which create a much higher expectation in the mind of the franchisee

than the franchiser can actually deliver. Alternatively, the franchisee themselves may

develop an unrealistic expectation of the frequency and nature of the support available

despite anything being said by the franchiser.

1.6.2 Compliance with System

Franchisees feel that franchisers are too rigid in their enforcement of compliance,

and would prefer a profitable business than a highly-compliant business. Franchisers on

the other hand feel that compliance is necessary to maintain the integrity of the brand,

and in turn, should lead to higher levels of franchisee performance.

By "failing to follow the system" franchisers feel that franchisees are

undermining their own investment in the franchise, as well as risking the brand promise 9

across the network. However, franchisees feel that the system should be improved, or is

downright deficient, and seek to develop their own standards and procedures that they

believe work better than those provided by the franchiser.

1.6.3 Fees

The payment of fees, also known as royalties, is another significant factor

leading to disputes according to franchisees. Again, the perspectives here differ

significantly. Franchisees often feel that they pay fees in return for certain services

provided by the franchiser; if support is below expectation, then franchisees may

become unhappy with the fees and cease paying them, or argue for a reduction in fees.

They might also cease paying fees if their business is financially distressed. Franchisers

treat the underpayment or non-payment of franchise fees as a major breach of the

franchise agreement, irrespective of the franchisee's satisfaction.

1.6.4 Communication Problems

The difference in relative importance associated with communication as a cause

of franchise disputes, is similar to the differing perspectives on fees. On one hand,

franchisees feel that they are not well-enough informed about the franchise, its

operational requirements, and the direction of the brand as a whole, whereas franchisers

may argue that franchisees fail to keep the franchiser informed by not submitting reports

or providing other information. Again, this common cause for conflict appears to come

10

down to a mismatch of expectations, and the capacity or willingness of either party to

meet the expectations of the other.

1.6.5 Misrepresentation of Issues

Some of the issues which are more important to franchisees, such as support,

compliance and fees, have the potential to arise from misrepresentations when joining

the franchise (or misunderstandings of what were represented at the time). Franchiser

concerns about misrepresentations are typically centred around earnings claims that may

subsequently prove to be inaccurate, whereas franchisees may be focussed on the

necessary inputs to achieve the earnings, rather than the earning’s target itself.

1.6.6 Marketing Issues

Marketing is viewed by franchisees as a key benefit of joining a franchise.

Franchisees usually pay a contribution into a marketing fund, which then pays for some

or all of the advertising and promotion to benefit the network. Franchisees may become

dissatisfied if the marketing campaigns that have been funded by their contributions

have not produced adequate results, or if they feel that their contributions are being

wasted or spent unwisely. Franchisers may also be sensitive to these perceptions of the

effectiveness of group marketing. While the perspectives on the issue of marketing are

not always different, the importance of it to drive business to a franchisee's outlet is not

to be underestimated.

11

1.6.7 Profitability

One effect of the franchiser’s desire to maximize sales and the franchisee’s

desire to maximize profit is a conflict over whether to adopt high-volume, low-margin

business strategies. In general, maximizing sales tends to occur at lower prices and at

higher quantities than maximizing profits. Thus, franchisees tend to prefer strategies that

involve selling a lower quantity at a higher price than their franchisers would like. This

conflict manifests itself in disagreements between franchisers and franchisees over the

product mix for the business.

1.6.8 Other Issues

The remaining issues which are triggers for disputes from a franchisee's

perspective include agreement and territory issues, deficit or excessive control by the

franchiser, and stock issues. For territories, franchisees may feel that the franchiser

restricts their growth by keeping them in just one area, whereas franchisers expect

franchisee’s to maximise their penetration of a given area rather than providing goods or

services outside it.

12

1.7 Schematic Model for Franchise Relationship

Figure 1-1 Schematic Model for Franchise Relationship

The schematic model can be divided into two parts horizontally. The upper part

describes the role relating to the franchiser and the lower part to the franchisee. On the

franchiser’s side, once the decision to take the franchise route to expand the business is

made, the prospective franchisees are short-listed. This stage may be taken as lead

13

generation stage. After that, the franchiser conducts his part of investigation to see the

desirability of entering into franchising contract with the franchisee. This stage is

followed by negotiation which may eventually result in entering into an agreement. This

is followed by fulfilling of his part of the contractual obligation. This stage consists of

two parts—facilitation/service and management and control of the franchise. The usual

functions that are included in facilitation/service are supply of gondolas and other

gadgets required by the franchisee to run his business, helping the franchisee in layout

design of the retail outlet, if the franchise involves one, initial inspection, training the

franchisee and his employees in handling business or rendering a service as the case may

be. It is important to refresh the franchisee whenever any change in the product or

service is initiated, timely replacement of the damaged goods and providing legal and

financial help to the franchisee in times of need. The second part of the franchiser’s role

is management and control of the franchising system. Some of the important tasks of

this are to obtain periodic reports and reviewing them constantly and giving necessary

feedback. Collection of royalties or part of the profits and the costs of the goods and

services from the franchisee of course is a major part of the management. Periodic and

surprise visits to the franchisee’s facilities is necessary to see the honesty and diligence

with which the franchisee is fulfilling the terms and conditions of the franchise

agreement. The modifications initiated by the franchiser and the franchisee have to be

clearly defined; the franchisee and his employees have to be geared to meet the

challenges posed by those modifications. As conflicts are an inevitable part of any

franchising system, they have to be settled without any detriment or damage to the

14

system. It may be at times necessary to review and revise the terms and conditions of

the agreement.

This has to be undertaken after assessing the pros and cons of the new conditions

added or changing of the existing conditions. It is possible that the relations between the

franchiser and the franchisee may be smooth and encouraging. In that case it is in the

best interest of the franchiser and the franchisee that the contract is renewed. However,

such a situation is unlikely in the Indian context.

The franchisee’s side of the story is somewhat similar. An individual or a firm

intending to enter into franchise contract scouts around for the best business possible. In

doing so, a little bit of investigation is exercised by the franchisee before approaching

the franchiser. Negotiations take place after approaching the franchiser. But in the

Indian context, negotiations are rare. A ‘ready-to-sign’ agreement is kept ready by the

franchiser and often the franchisee ends up signing on the dotted line. Thus a franchise

contract comes into existence. The franchisee’s obligations to the franchising system

start from this point onwards. The franchisee has to set the unit with or without the help

of the franchiser as agreed upon in the contract. He takes deliveries from the franchiser

as per the pre-specified schedules. He follows the guidelines given by the franchiser in

taking deliveries and running the franchised unit. He makes prompt payments without

default. Sending periodic reports, sharing market information with the franchiser,

participating in the co-operative advertising are parts of the obligations of a franchisee.

He may raise queries and seek clarification from the franchisee and settle the disputes

orally by discussions or arbitration as stipulated in the contract. If the relationship is in

good shape, the franchise contract may be renewed for a further period, or it may get

15

terminated with mutual consent. The franchisee has to fulfill all the obligations at the

time of termination of contract such as settling the accounts, returning the unsold stock,

complete the service contracts entered into with the customers and so on.

1.8 The Problem

Our study is based on the three dimensions, namely, franchise relationships

(section 1.41.4), conflicts and stages of franchise (section 2.3) to focus on

implementation part of a franchise as suggested in the schematic model in section 1.7.

The crucial aspect of this study lies in strategizing the start and termination of the

franchising system, including implementation issues. The literature on franchising

(described in the next Chapter) suggests that past research has been too closely tied to

theories of agency and power. Though helpful, those theories are quite narrow in

approach. They have often ignored the franchisee’s perspective; knowledge that can be

gained and shared from the franchisee’s perspective and opens important research

questions to be answered. The most disturbing facet of existing franchising research is

that it has almost totally ignored implementation issues and strategies associated with

them.

This work concentrates specifically on the implementation issues of franchising

from both the franchiser and franchisee’s perspective. The understanding of these issues

would help us in offering some valuable suggestions to both the parties, helping to

remove the irritants that arise in the day-to-day functioning of the franchising system. It

also explores the strategies involved which would extend the longevity of the

16

franchising system at the time of franchise contract itself. Even though it would be

abstract in nature, it would optimize the operation of a franchising system to the desired

levels of satisfaction.

1.9 The Importance of the Study

In recent past, the penetration of Franchiser-Franchisee business model in India

is happening with full thrust. There is a need in today’s competitive franchising

environment to identify strategies that promote franchising success and there has been

very little research conducted specifically in Indian environment. Our study evaluates

the relationship model specific to state of Andhra Pradesh. Our work outlines the

correlation between these relationship parameters using statistical tools and techniques

and prescribes some insights based on the outcome.

The result would also guide the existing and budding franchisers and franchisees

to make informative decision. Additionally it may prevent both Franchisers and

Franchisees from getting into known pitfalls.

1.10 The Tasks under the Study

1. The first task to be fulfilled in this study is to understand how a typical

franchising system works in the Indian context and what problems are faced in

long term and short term in running a franchise business.

2. Building the model of a typical franchising system, which reflects the Indian

conditions, is a challenging task. Though, there are broadly two types of

17

franchises i.e. agency and business format, there seems to umpteen varieties of

franchises practiced in the Indian context. Culling out a single model of a

franchising system so that suitable improvements can be suggested is a difficult

task.

3. The next task is developing a suitable questionnaire to gather information on the

mechanics of a franchising system, and the irritants affecting the functioning of

a franchising system. After designing the questionnaire, managing a good

response rate is another challenge.

4. The next task is determining whether we would have to review the personality

of the franchiser and franchisee organizations or the personalities of the heads of

those organizations. Four factors — honesty, prestige, innovation and power, as

suggested by the Warwick University study was used in this study. To test the

matching personality canonical correlation was used.

5. Dependable scales are available to measure both the corporate values and

individual values. This task too involves the dilemma of determining as to

whose values have to be measured—the organizational or the organizational

head’s? Again, the nature of the samples selected will resolve this issue too. To

examine the matching of values, we use coefficient of correlation.

6. Measuring the ethics is another task. Established scales for the validity and

reliability available. The samples available will finalize whether we have to

measure the corporate ethics and the ethics of the business heads. Like in the

case of values, we use coefficient of correlation to examine the match or

otherwise of ethics of both the parties.

18

1.11 The Objectives of the Study

1. The main objective of the study is to examine the franchising strategies of select

products and services in Andhra Pradesh. The franchising strategies under

consideration are based on a set of parameters ranging from Relationships,

Conflicts, Business values etc.

2. To study the existing strategies of both franchisees and franchisers,

3. To enumerate the right fit parameters between franchisees and franchisers.

1.12 Research Methodology

Research comprises of defining and redefining the problems, formulating

hypotheses, and suggesting solutions, and collecting, organizing and evaluating data,

making decisions and reaching conclusions. The present study is basically descriptive in

nature which covers Research Design, Data Collection Tools and Measurement,

Sampling Plan and Tools for Data Analysis.

1.12.1 Research Design

The study basically relies on primary data. The primary data was collected by

administering questionnaires and also through formal and informal discussions with the

concerned members of the franchisee and franchiser companies. The data was collected

during 2012-2013.

19

Secondary data is for preceding five years from the year 2012. It was collected

from the following sources:

1. Journals: Journal of Small Business Management, Journal of Marketing,

Management Science, Journal of Management, Journal of Retailing, Journal

of Business Venturing, International Small Business Journal, Strategic

Management Journal, Management Science, Organization Science, etc.

2. Magazines: The Franchising World, Franchise Times, Franchise Plus, Indian

Franchise Association newsletter, Franchiseek, Forbes India, Franchise India,

etc.

3. Books: Franchising (Marya, 2007), Franchising: An International Perspective

(Hoy & Stanworth, 2002), Franchising: Pathway to Wealth Creation

(Spinelli, Jr., et al., 2003).

4. Websites:http://www.franchiseindia.org/pdf/IFA-white-paper.pdf,

http://www.aboutmcdonalds.com/mcd/investors.html

1.13 Data Collection Tools & Measurement

Data collection tools are the key to measurement scales through which a

thorough analysis would be carried out & interpretation arrived which were used for

drawing inferences for the study. Questionnaire was the tool used for data collection and

some of the parameters collected are as follows:

• Business personality was measured using 18 items on a five point Likert scale.

• Business ethics was measured using 9 items on a five point Likert scale

20

• Corporate culture was measured using 7 items on a five point Likert scale.

1.13.1 Sampling Plan

The sample Franchisees and Franchisers selected for the study is confined to the

geographical region of Hyderabad, Vishakhapatnam, Tirupati and Vijayawada cities of

Andhra Pradesh .Further, the respondents were managers who were holding responsible

position and were managing all the affairs of their respective franchise or franchiser

business.

Sample Universe encompasses select franchisee’s and franchiser’s belonging to

the categories like beauty, apparels, ice cream parlor, fast food chain, gifting and

greetings, jewelers, mobiles, kitchen products, education, watches and logistics of

Hyderabad, Vishakhapatnam, Tirupati and Vijayawada cities.

Sample Size determination is a scientific process of arriving at an appropriate

size of sample which is capable of representing the sample universe and also the size

must be capable of transforming the study to a meaningful exercise. A sample of 590

Franchisees and 107 Franchisers were selected and the distribution is as follows:

Location

Hyderabad Vishakhapatnam Vijayawada Tripathi Total

Franchisee 300 150 90 50 590

Franchiser 89 10 5 3 107

Category

21

Sampling Technique Purposive Sampling technique was used to collect the data for

research. Purposive sampling represents a group of different non-probability sampling.

This relies on the judgment of the researcher, when it comes to selecting the units (e.g.,

people, cases/organizations, events, pieces of data) that are to be studied. The Franchiser

and franchisee were selected based on number of Franchises in the cities where the study

was carried out.

Sample Unit defines the single unit of the sample. Respondents held a

responsible position and maintained every day affairs belonging to either franchisee or

franchiser business.

1.13.2 Tools for Data Analysis

Keeping in view the nature of data, the following statistical tools were applied

for data analysis:

• Cross Tabulations Technique

• Descriptive Statistics

• T – test

• Factor analysis

• Chi-square

22

1.14 Hypotheses

H01 There is no significant difference in the existing strategies of different

Franchisees and Franchisers

H02 There is no significant difference between the Business Values as perceived by

franchisees and franchiser

H03 There is no significant difference in problems faced by Franchisees and

Franchisers.

H04 There is no significant difference between the Business Personality as perceived

by franchisees and franchiser

H05 There is no significant difference between the Business Ethics as perceived by

franchisees and franchisers

1.15 Period of the Study

The study for the primary data is during the year 2012 –2013 and for secondary

data is the preceding five years from year 2012.

1.16 Limitations of the Study

The Data collection was done in only four major cities in Andhra Pradesh

(Hyderabad, Vishakhapatnam, Tirupati, and Vijayawada).

1. The study is conducted in the four regions of Andhra Pradesh, of the select

companies. Hence, the findings of study cannot be generalized.

23

2. The respondents may have failed to articulate the opinions and thoughts.

Therefore, the inarticulation error may creep into the study.

1.17 Organization of the Study

The study is divided into five chapters which are as follows:

Chapter 1, Introduction: It deals with the introduction to the Franchising

concept and Franchising framework covering causes of conflicts in Franchising and

Relationship model. It also deals with Research Methodology, Hypotheses, Period of the

study, Limitation of the study and Organization of the study.

Chapter 2, Review of Literature: It focuses on the literature survey and

methodology. The research work done by various researchers in the area of Franchising

is studied and their observations are highlighted. Based on that, the research gap is

established and the problem for this study is proposed.

Chapter 3, Profiles of companies: This chapter gives a brief profile of

companies selected for research study.

Chapter 4, Data Analysis and Discussion: This is the core chapter of the

research study. It contains the analyses of the collected samples of the study to draw

meaningful framework.

Chapter 5, Findings, Conclusions and Suggestions: The chapter contains the

summary of findings, conclusions of the study, suggestions and directions for future

research.

24