Franchising in Small Business Support (Case of "Vtorresursy" Public Company)

Student: Sekisheva Alina

Faculty: St.Petersburg School of Economics and Management

Educational Programme: Economics (Bachelor)

Year of Graduation: 2016

Graduation project is based on one of the topic of franchising. Fundamental science pays not enough attention to this business branch in part of the investment attractiveness of projects. The main goal of this paper is the development of model of franchise investment attractiveness assessment for small business companies in Russia. To this day all models of investment attractiveness assessment were based on the research “in general” without such specific factors as validity of royalty rates and goodwill. These “steps” distinguish author’s model from others. Author’s model meets such requirements as: 1. originality: it takes into account the specifics of franchising; 2. multifactorial analysis: the research is based on the assessment of “external” (regional, industry) analysis and “internal” one – financial results, intellectual capital, etc. 3. “sub-model” in all steps of the assessment; 4. an integration of approved methods in unified “funnel”; 5. practical applicability: it enables the investor to assess the effectiveness of potential franchise. Author’s theoretical model is supplemented by its practical applicability in case of “Vtorresursy” public company. The research shows that “Vtorresursy” is a perspective project with great potential. The investment in it is an investment in wide regional development opportunities, effectiveness of “external” positive branch modification and “internal” stable dynamics of growing financial results and reliability evaluation of shares. Besides, analysis is supplemented by specific franchise factors – goodwill and validity of royalty rates. According to the results, royalty rates in case of “Vtorresursy” public company reaches inly 22% of all excess profit, derived from working in franchising “system”. Simultaneously, goodwill of the company is inessential in metal trading business. The “funnel” of practical applicability of author’s model shows that the franchise of “Vtorresursy” is worthy of investor attention.

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