Assessment of Effectiveness of Franchising - a Case Study: “ATLANT” Company

<p>Nowadays the study of franchising becomes more important for Russia. This may be due to the sharp increase in the amount of small enterprises in Russia. The small businesses often use franchising to avoid necessity to work up a market and develop business on their own. Two-way communication between rights holder and assignee makes it possible to evolve franchisor`s chain with minimum expense at one point and to set up franchisee`s business on the other side. Also franchisees gain several advantages such as risk reduction, low cost input and b2b services, market share et cetera. It makes franchising an effective way of business development.</p><p>However, there is an absence of investigations on franchising effectiveness. The most of articles have only review of market situation. The purpose of the study is to create a model which let us to quantify brand power and financial condition of franchisor in qualitative grading scale and to compare franchises between each other. This method makes it possible to compare brands without their measurement in terms of money.</p><p>The work is organized as follows. In the first part, theoretical aspects of franchising are considered. The next part is devoted to models of franchising assessment and analysis of Russian franchise market. In the third part of the work, the algorithm of qualitative assessment of franchising is given. Then it is used in case of &ldquo;ATLANT&rdquo; company.</p><p>The suggested approach is based on brand power and financial condition assessment. It allows comparing franchises in case of absence of information in franchising disclosure documents.</p><p style="text-align: justify;">Keywords: franchising, regression analysis, Russian franchising market.</p>