The Main Franchisability Factors for Businesses in Brazil

Abstract

Franchising is a system of business expansion that is currently practiced in numerous markets. This system, based on the exchange of experiences and strengths between participants to generate competitive advantage, works with trends and styles in tune with the context of a highly globalized, dynamic and interdependent society. The franchising expansion model holds certain specificities and requirements to ensure the success of its operations, meaning it is not a viable option for every company – especially small-to-medium businesses. Therefore, a research was done to determine the determinants of franchisability of Brazilian small-to-medium companies and their respective relevances, in order to determine which factors have a real relevance in determining the franchisability of a company, and within these factors, which ones are more relevant. Documentary research was done to raise the factors in the literature, as well as multiple case studies to determine the relative relevance between factors and a triangulation with company websites and experts to validate the results. It was concluded that the two factors that have more relevance in the franchise of a company are the business model and the market and the product. On a second level, presenting lesser relevance to the previously mentioned factors, are the branding power, profitability and availability of support for the franchisee. Finally, it was determined that the factors with the least relevance are replicability and standardization, competitive advantages, relationship bilaterality, contractual status and compliance, and corporate culture. Based on the results of this research, entrepreneurs can use the suggestions as an aid in their decision to opt for franchising as a method of business expansion, in addition to analyzing the feasibility of a franchise operation.