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Global franchising in emerging and transitioning economies

UNCG Author/Contributor (non-UNCG co-authors, if there are any, appear on document)
Dianne H.B. Welsh, Distinguished Professor of Entrepreneurship (Creator)
Institution
The University of North Carolina at Greensboro (UNCG )
Web Site: http://library.uncg.edu/

Abstract: Franchising has experienced phenomenal growth both in the US and abroad in recent years. Figures vary, but it is estimated that U.S. franchising generates $800 billion worth of business in gross sales and represents 40 percent of the retail trade (Swartz, 2001). While in the US, Canada and parts of Western Europe franchising has reached domestic market saturation, emerging markets remain relatively untapped. Emerging markets, accounting for 80% of the world’s population and 60% of the world’s natural resources, present the most dynamic potential for long-term growth to businesses, in general, and to franchisors, in specific. The U.S. Department of Commerce estimated that over 75% of the expected growth in world trade over the next two decades will come from emerging countries, particularly Big Emerging Countries, which account for over half the world’s population but only 25% of its GDP. Emerging markets are among the fastest growing markets for international franchisors. Several surveys conducted by Arthur Andersen showed that more and more franchisors are seeking opportunities in emerging markets. A recent article in Franchising World (Amies, 1999) stated: “Franchises are springing up in the most unlikely, and for many of us unheard-of, places...Those franchisors who can establish a beach-head on these wilder shores could do very well, but the risks are great.” This article is a step in the direction of educating its target markets about international franchising opportunities and threats in emerging economies.

Additional Information

Publication
International Journal of Business and Economics, 2(1), 332-343
Language: English
Date: 2002
Keywords
Franchising,