Franchising - An Untapped Resource For Ireland

Donlon, Claire (1999) Franchising - An Untapped Resource For Ireland. Undergraduate thesis, Dublin, National College of Ireland.

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This dissertation is a study of the franchise industry in Ireland and whether it still remains a largely untapped resource. It outlines the origin of franchising and deals with the advantages and disadvantages to both the franchisor and the franchisee. It examines the franchising industry in Ireland, its growth over the years and what the future may hold for franchising. Due to the fact that all
business start-ups are dependent on financial support from the banks, their role is deemed very important, thus their attitude to franchising is explored.

The benefits of franchising for the franchisee are evident. They are essentially buying into a proven product or service, established trade name and corporate image. It is a chance for them to "cash in on someone else's bright idea", minimising the risk of failure. (Business & Finance, 21 st August, 1997)

For the franchisor, it is an attractive way to expand the business as the capital. comes from the franchisee. However, there are many restrictions to both parties. The franchisee must comply with procedures and standards set by the franchisor, even though he owns the business. The franchisor could suffer from overall damage to the reputation of his business due to an unsuccessful franchisee.

There are 140 business format franchise systems in Ireland, the best known being McDonalds restaurants. Only 15 of these systems are indigenous, the best known being O'Brien's Sandwich Bars. These figures are very low when compared to the USA where there are 3,500 systems in operation and 50 per cent of retail outlets are franchises. They clearly show that there is enormous growth potential for the franchise industry in Ireland.

The franchise industry is continuing to grow significantly here both in terms of the numbers of new franchise systems now operating in Ireland and also in the number of units from existing franchise systems. The job potential in franchising is also enormous. There are an estimated 9,600 full-time jobs in the franchising industry, an increase of 2,000 since 1997.

The banks have begun to recognise the massive investment potential of the franchise industry. Both the Bank of Ireland and the Ulster Bank have specialised in-house units dedicated to handling franchise businesses. They see franchising as less risky than independent business start-ups.

The primary research for this thesis aids in seeking to ascertain the growing potential of franchising and whether it is still largely an untapped resource. This was done by interviewing a franchisor and franchisees and by attending a
Franchise Exhibition. This gave the author an insight into the franchise industry and what the future may hold from those directly involved. It was also essential in ascertaining the advantages and disadvantages and the rationale behind taking on a franchise. Another critical part of the primary research was interviewing a former franchisee who gave invaluable information regarding her experience both in and out of the industry.

Item Type: Thesis (Undergraduate)
Subjects: H Social Sciences > HF Commerce > Franchising
Divisions: School of Business > BA (Honours) in European Business and Languages
Depositing User: Aisling Gorby
Date Deposited: 28 Apr 2010 16:44
Last Modified: 02 Sep 2014 09:18

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