This week has been very rewarding for me in the sense that I have been able to learn about something which I have always been interested about. This is the concept of franchising and the importance of service delivery systems in franchising. I know that franchising is an extremely powerful form of business in which the risks and rewards can be shared (in proportion to effort and investment) by franchisees and franchisors. This can be corroborated by literature written on the subject. For example, an article titled ‘Delicate balance in franchising depends on partnerships’ that appeared in the Hotel and Motel Management journal states that “Franchising is a powerful concept in capitalism. The Middle English word “franchise” meant freedom or privilege–and perhaps that’s what the modern version of the word originally connoted.” (Patel 2001). It is no wonder that a business that provides freedom and privilege is a much sought after form of gaining financial independence. But even though the idea is very practical, the business itself requires a strong foundation, hard work, and taking of a certain amount of risk. One of the key foundations that will be crucial in the success of the business is the service delivery system formulated and implemented by the franchising company. “A successful franchisor will have tested and specified all product and service delivery systems prior to launching the franchise program.” (Schlentrich, 2008). In such a case, it is important to evaluate the service delivery system of a franchising company. It is to be noted that franchising now occurs in many areas of business, though the more popular areas are food, retailing, and education. There are many ways to evaluate a service delivery system and there are no set patterns since service is mainly an intangible concept. The method followed in this case for evaluation of service quality is called SERVQUAL. “SERVQUAL is a multi-item scale developed to assess customer perceptions of service quality in service and retail businesses.” (Theories used in IS Research: Servqual, 2006). The evaluation is based on five constructs namely tangibles, reliability, responsiveness, assurance, and empathy. All the above have been reviewed in my paper submitted on the topic. Further constructs based on a study of fast food franchise outlets in the USA and Korea was also taken into account. They are sanitation (hygiene), location of the franchise, the parking facilities available, the quality of the service (in this case food), and the environment in which the franchisee is situated and the image or perception of customers about the franchising company. The paper states that the above “determinants are not enough to evaluate the service quality of fast franchise.” (Chang, Lim and Kim).
As the owner and managing director of a business, I have not yet followed the concept of franchising. But after learning about it, there appears to be a possibility about incorporating them into my business of garment sale also, especially when I am going into retail. Hong Kong has a strong franchising culture. “Recognising the benefit of franchising to the economy, the Hong Kong Franchise Association was established in 1992 as a committee within the Hong Kong General Chamber of Commerce to monitor and promote the development of franchising activities in Hong Kong.” (Franchising in Hong Kong). It should be noted that there is no particular law relating to franchising in the country and only general laws and statutes apply here. An example of franchising would be the Yum Brands that allows franchisees to market multiple brands like KFC and Taco Bell. They have a proven business and service delivery system that is universal throughout the world (with minor country specific variations). “Our proven process supports you every step of the way with development experts, business coaches and a peer network of more than 1,200 experienced franchisees, all part of the Yum! Value Network.” (Franchise and Business Opportunities).
As always I have found the module for this week very informative and useful. It has also potential practical applications in my line of business. I am excited about all that I have learnt about franchising this week. It has only made me curious to know more and also whether it is possible for me to have a franchise retail network for Thai Lay Fashion Company Ltd. Most of the information I got this week was quite new to me and the concept of a service delivery system can be adopted into any organization even if it is not a franchising business. My tutors and other students have been most helpful as usual and I have only good things to say about them. My modules are on time and I have been able to attend CUSTOMER TO INSERT NUMBER HERE classes out of the total number.
Bibliography
- PATEL, Dhansukh. (2001). Delicate Balance in Franchising Depends on Partnership. [online]. BNET.
- SCHLENTRICH, Udo. (2008). What is Franchising? Frequently Asked Questions. [online]. Whittemore School of Business & Economics. University o New Hampshire.
- Theories used in IS Research: Servqual. (2006). [online]. Appalachian.
- CHANG, Daesung., LIM, Seongbae., and KIM, Hwanyong. A Comparative Study on the Service Quality of Global Fast Food Franchises in a USA and Korea. [online].
- Franchising in Hong Kong. [online]. HKGC.
- Franchise and Business Opportunities. [online]. BISON.