Case Study Vietnam

March 2013 examples of exemplar home-grown Asian franchising brands and in part because of a lack of access to those brands in this category.

Fortunately, the current study has access to Vietnamese most successful homegrown franchise brand, PH, and is able to document the basis of the brand’s birth and development, emphasizing the design of the brand vision and essence and the supporting brand management system (the franchising model). Very little is known about Asian franchising brands.

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It seems that the penetration of franchising is more limited in Asia, though the reasons for this are unclear. Additionally, little is known about the extent to which Asian franchise brands have primarily used Western approaches to franchise brand management or whether these systems have been adapted to suit the Asian context. The initial expectation was that some adoption of the franchise brand management system occurs in an Asian context, with the purpose of the article to more precisely analyze the nature of this adoption.

The objective of the current article is to tackle these two questions, namely to document the birth and development of Vietnamese leading home-grown franchise brand, PH, and to analyze the extent of franchise brand management system Patton In an Aslant context I Nat Is, ten article Investigates Vietnamese largest franchise brand system, PH, the first major domestic franchising system developed and grown in Vietnam. Vietnam is touted as a potential next-wave Asian tiger, adding to the intrigue to find out the state-of-the-art franchising currently in that country.

Franchise branding is a particularly useful context for better understanding of how brand concepts are developed in a creative sense and then managed (through a franchise brand system). Essentially a case method approach is used around the PH organization. Special attention was given to the brand founder and entrepreneur, DRP. Lye Quiz Truing.

Traditional Most franchising models focus on the financial, management control, and marketing motivation for franchising, to which we will turn shortly.

Very few of the models discuss the initial design of the franchising brand. The study can, therefore, contribute to the fledgling literature of entrepreneurial branding. Currently that literature emphasizes the strong role of the founder in shaping the brand (Bimodal, 2001 ; Doyle, 2003; Crake, 2005; Merciless, 2007; Rode & evaluates, 2005), which the rent study endorses. The same entrepreneurial branding literature emphasizes the importance of corporate over product branding, again a sentiment echoed in the current study.

The traditional franchising model, that is, one that is common in developed nations such as the United States or Australia, typically views Pioneering Asian Franchise Brands 297 franchising as an efficient method of distribution of goods and services due to its reliance on the human capital contributed by franchisee owner managers (Borderland, 2002). Moreover, it is the ability of the franchisee and franchiser to specialize and intrigue in different ways to the business relationship that provides a comparative advantage over alternative organizational structures (Blair & Elaboration, 2005).

The early literature viewed franchising as a temporary strategy to be used by small startup companies in order to achieve rapid growth despite the reluctance of capital markets to back their investments (Confident & Kelly, 1969). This capital acquisition explanation argued that organizations were forced to resort to franchising because it allowed them to expand quickly without having to source scarce external financial sources or to relinquish control as in a Joint venture or stock market operation (Caves & Murphy, 1976).

Thus, over time, it was expected that franchisers would repurchase or take over the (best) franchised units in the system and eventually become fully company owned (Confident & Kelly, 1969). However, research into this phenomenon has produced mixed results in the United States (for example, Hunt, 1973; Brinkley & Dark, 1987; Elaboration, 1992).

Moreover, it has been found that where ownership redirection occurs it is “more strategy driven than opportunistic” (Dana, Kauffman, & Reproachable, 1998, p. ). Indeed, Blair and Elaboration (2005) comment that “most franchise chains are hybrids: partially vertically integrated Ana partially Transected (p. 101). In contrast, Wendell some large Taste T canals (sun as McDonald’s) strategically ensure a mix of franchised and company-owned units, most franchise systems in Australia are almost fully franchised (Frazer, Heaven, & Wright, 2008). Hence, different franchising models are employed around the world, and there is no “one-size-fits-all” approach.

An alternative explanation of franchising, first put forward by Rubin (1978), focuses on creating a contractual relationship that revises efficiencies and incentives for both parties to achieve maximum benefits. It is based on the premise that, in order to expand, some outlets will be located at a geographical distance from the franchiser, thus making it difficult to fully observe and monitor their operations. Employee managers may be motivated to act in their own self-interest rather than the firm’s.

For instance, in the absence of any additional rewards and where their actions are difficult to observe, employee managers will not be specifically motivated to work harder than necessary or to maximize efficiency of operations. Hence, franchising provides a workable solution to the problem encountered in agency relationships by focusing on the substance, rather than the economics, of the relationship (Brinkley & Dark, 1987). Franchising becomes an efficient distribution channel due to “increased owner commitment and reduced control and monitoring costs” (How & Stonewort, 2003, p.


For the past several decades, scholars around the world have sought evidence to support these alternative, but not exclusive, theories of franchising. 298 Findings have been somewhat mixed, with most commentators now concurring that a ambition of both resource constraints and agency theories serves to explain why franchising occurs. For example, Australian research has found support that franchisers initially use franchising as a means of expansion when the franchiser is financially constrained, while at the same time choosing franchising in order to minimize franchiser risk (Frazer & Stokes, 1997).

Research in the United States confirms the role of the franchiser in controlling the use and value of the brand and that of franchisees to control ongoing operations (Borderland, 2002).

These different approaches are also evident at the operational level. The traditional concept of a franchisee is the so-called mom-and-pop model whereby the franchisee operates a single unit (Greengage & Mediaevalist, 2002). Research in Australia reveals that this model is pervasive, with the majority of franchises operating as husband?wife single- unit partnerships (Frazer et al. 2008). However, in the more mature franchising sector in the United States, most franchises are owned by multiple-unit operators: “Single-unit franchisees are the exception, not the rule. ” (Kaufmann, 1996, p.

5). It is clear that different variations of franchising exist around the world, so now we turn to en model opiate Day no 4 P 2 In Vietnam. Asian The literature on franchising in Asia is less developed, reflecting the relative infancy of the franchising sectors in Asian nations.