Author(s):
1. Marta Ziolkowska, 2. Olga Ignatova, Sofia University St. Kliment Ohridski, Bulgaria

Abstract:
Innovations in business are undoubtedly a significant factor for economic growth, and franchising is a successful way of doing business – beneficial for both parties, but also requiring effort and/or capital from them. Regardless of their type, implementing innovations in franchise systems, which is a promising method of gaining competitive advantage, is closely related to mutual exchange of knowledge and experience between the franchisor and the franchisees. This article is a study which analyses research results and publications on franchise networks, gives numerous examples of innovations in franchise enterprises, draws conclusions, suggests future measures and provides implications for business marketing practice. Franchising is a widely recognized and promising way to expand in the world. This is confirmed by the positive trends on all the world’s continents. The main exporters of franchises around the world are the United States, Canada, Japan and Australia. In Europe, the leaders are Britain, France and Germany. Nowadays, franchising is a successful way of doing business. It is a method of sales, marketing and expansion. Franchising is about relationships – if both parties stay committed to each other for a long term, respect mutual needs and remain loyal to one another, then the benefits of cooperation are highly probable. Franchising is a special form of business development which combines the advantages of the large-scale production (economies in administrative costs, advertising costs for the introduction of new technologies and products or staff training) and SME (high “penetration” ability; the possibility of making local contacts and getting knowledge of local conditions). In return for paying for the franchise license and “linking” commitment to the quality standards, a small enterprise receives from the parent company substantial support in marketing and staff development, as well as training experience in the management, technical assistance (including sharing the equipment), greater access to raw materials, etc. Simultaneously, franchising is in many cases a successful growth strategy for small, medium and large enterprises. Franchise relationships use globalization attributes for their development, repeating the same business model and the same idea for franchise units even in the remotest markets of the world. Franchise is characterized by the fact that it can be adapted and modified with the help of the franchisees’ organizational skills and knowledge of the customers’ preferences and the local market’s conditions, at the same time without changing the core concept. This contributes to the increase in employment figures and to the creation of enterprise idea. Innovations have become an important issue all over the world, as well as in the micro-scale – in individual enterprises and network organizations. Innovativeness is a crucial condition for the increase in products and services attractiveness, which provokes market and export development, and thus influences the company’s competitive position. Nowadays, in the times of global economy, all enterprises introduce innovations – both renowned and stable ones and new ones which only enter the market. Some companies conduct complex innovative actions by creating network organizations in order to profit from the potential, resources and skills of all the network’s members.

Key words:
innovations, franchising

Date of abstract submission:
17.11.2013.

Conference:
REDETE 2014 - Researching Economic Development and Entrepreneurship in Transition Economies