News 2010

ICPE REPORT ON SME TRAINET WORKSHOPS 1 AND 2

 

Introduction and justification of the focus – survivability of franchise systems and their use for SME development: good practices in supporting SMEs

 

1. Definition of franchising (The European definition as adopted by the European Franchise Federation)

"Franchising" is a system of marketing goods and/or services and/or technology, which is based upon a close and ongoing collaboration between legally and financially separate and independent undertakings, the Franchisor and its individual Franchisees, whereby the Franchisor grants its individual Franchisee the right, and imposes the obligation, to conduct a business in accordance with the Franchisor’s concept.

The right entitles and compels the individual Franchisee, in exchange for a direct or indirect financial consideration, to use the Franchisor’s trade name, and/or trade mark and /or service mark, know-how, business and technical methods, procedural system, and other industrial and /or intellectual property rights, supported by continuing provision of commercial and technical assistance, within the framework and for the term of a written franchise agreement, concluded between parties for this purpose.”

Franchising is by definition an ethical business where the franchisors allow franchisees to use on contract basis their business and technical know how (intellectual property) and function under the brands of franchisor. Development of franchising can serve to the development of entrepreneurship with high rates of success with longer life spans. In the SME Trainet project we see franchising as

  • A School of entrepreneurship for beginners in the business;
  • Part of the sustainable entrepreneurship taking into account high survivability of franchise units;
  • A tool for efficient transfer of know how and technology;
  • A method of faster spread & growth of the contractually associated enterprises by using their financial inputs;
  • An efficient mechanism of the generation of productive employment of different categories of employees, including self-employed franchisees.

 

In the world roughly 4/5 of franchise units survive the first 5 years due to the quality of support offered by franchisors to independent entrepreneurs – franchisees. Only 1/5 of non-franchised independent units survive the first 5 years upon their establishment (see the Picture 1)

 

Picture 1: Success rate of independent SMEs and franchise units

pic1 

 

 

As franchising provides “incubated” functioning within the systems, the support is required to both franchisors as well as to joining enterprising candidates. Quality support to franchisees can be provided by quality franchisors. This includes:

  1. Satisfactory transfer of know-how and technology;
  2. Permanent human resource development: training, coaching, consulting, networking, etc.;
  3. Tailor made and timely assistance to franchisees in need.

2. The sequence of the SME-Trainet workshops: brief statement of their objectives:

 

  1. The Workshop 1 (W1) addressed two main target groups, fist the entrepreneurs, mainly franchisors, young businesses, who have been in the market for at least 2 years either as franchisors or as SMEs that can be marked as “would be franchisors” mainly for the sake of assessing their training and organisation development needs. The second target group are selected SME support institutions and their specific development needs for their key task in implementing their support to the fist group through training, coaching, consulting and facilitation of networking.
  2. The second Workshop (W2) addressed primarily the institutions providing support to SME development and training, in other words stakeholders in the development process. The group of institutions involved was the core group of those that have served or could serve for franchising development. The main objective was to establish good information base on the current state of the art in franchising and in the supporting activities of franchising development such as training, coaching, consulting, facilitating networking and acquisition of international experience, financing, etc. leading to a cooperative project among the support institutions. The workshop was preceded by a conference of franchising with all groups of players in franchising represented, where the insights of the first workshop were complemented with renovated / cumulative information from previous workshop.
  3. The anticipated workshop(s)- W3, W4 in the Autumn 2010 will further focus on the transfer of information on the experience of good practices from the first SME Trainet Conference in Helsinki as well as on accumulating new experience on good practices primarily from Slovenia and related regions. Again both providers of support as well as entrepreneurs will meet, define jointly established development needs. The transfer of information on experience will be primarily related to methods and didactics of training as well as the coaching and consulting support structures.

 

Report on Workshops 1 and 2 (W1 and W2)

 

Workshop 1: How to establish and run a franchise system by a young service SME: Development of Franchising in Slovenia, Support to potential and new franchisors (as growing entrepreneurs)

 

W1a: The specific objectives of the first workshop were

 

  • Address current national training and support needs of young franchise businesses especially would be and current young franchise systems that can be marked SMEs.
  • Discuss with a prominent national and international target group of stakeholders including entrepreneurs, support systems for SME development and their experts the existing good practices in the field of training, consulting, coaching and networking for young businesses in Slovenia, especially those involved in franchising;
  • Identification of possibilities of transfer to the national / international level, those that anyway exist within the business format franchising concept (through master franchising and subsidiaries through join ventures etc. that is focused mainly on services as well as through regional and international extension of brokering services spreading and facilitating cross-border franchising.

 

W1b: Participating institutions – resource persons (participants are listed in the Annex 2)

 

  1. ICPE, SME Trainet Project Coordinator for Slovenia
  2. Chargé d’Affairs, Embassy of the USA in Slovenia
  3. Founder of the franchise system BHS- automotives support
  4. President of the ICPE Council (Board)
  5. CEO, Chamber of Commerce of Slovenia
  6. U.S. Department of Commerce
  7. Mars Venus, d.o.o. (coaching franchise)
  8. Embassy of the USA in Slovenia
  9. CEO, FranAdria, Ljubljana (franchise development agency)
  10. CEO and co-owner of the Franchise System Linea Snella
  11. CEO, CEED Slovenia
  12. Gea College for Entrepreneurship

 

Accordingly the first Slovenian SME Trainet workshop was organized with emphasis on themes that were discussed in the sessions that are described bellow.

 

W1c: How a franchise is started

  

All requisite conditions were identified including

-          When it is time for an SME to decide to grow through franchising

-          Establishing the system

-          Prepare training packages and other support structures for joining entrepreneurs

-          Conditions for excellence in franchising

-          Development of a franchise manual and test it on a pilot franchise

-          Evolve a continuous training and development system for franchisees as independent entrepreneurs and their employees

-          Support systems for development a franchise system in Slovenia

 

It was emphasized in the W1 that piloting was an obligatory precondition when launching a franchise system. The participants, apart from stake-holders mainly potential and existing franchisors were acquainted with the win-win proposition of franchising for both parties including franchisors and franchisees. If franchising is a sort of incubation for franchisees, who “incubates” the franchisor’s company while building up a franchise system as a genuine scheme for “giving birth” to small independent enterprises – franchise units? Some good practices were mentioned including Linea Snella. Chamber of Commerce of Slovenia and the Slovene Franchise Association provide advisory services and several training events every year for the existing and especially young franchise systems. One of the providers that combine several methods of advisory and training services that were identified was CEED (Center of executive and entrepreneurship development). It was proposed that ICPE invites them to the subsequent SMEtrai.net workshop, namely the W2.

 

 

W1d: An overview of the Slovene franchising was the main topic of the second presentation

 

A SWOT analysis was introduced on the basis of the ICPE research results that identified strong and weak sides of the Slovenian franchising including some real successes and some failures, which are predominantly a consequence of not yet finished economic restructuring. This might be a substantially different reason for failures as cases that occur in Western developed economies. Failures may not end with total closing down of such systems but might be only a part of broader takeover by or merger with another franchise system. Mortality of franchise units of a well established franchise system is as mentioned elsewhere of this report substantially lower as with entirely independent SMEs.

 

At the bottom line of this session we may conclude that a clear need was established to further promote the services that would support functioning of franchise systems in Slovenia

 

W1e: A practical case of good practice of a Franchise System Mars Venus (http://www.marsvenuscoaching.com/ and http://www.marsvenuscoaching.com/gregoric/

Mars Venus is a franchise unit, the only one in Slovenia, of the American Franchise System, the HQ based in Las Vegas, US. It is a unique system where a substantial autonomy has been allowed to the owner of the Slovene unit Mr. Gregoric. The franchise is important for Slovenia for two main reasons, namely the first one being that it is an example of good practice of coaching. The company has thrived and succeeded on the Slovene market in the area that is of utmost importance for improvement of performance of the Slovene SMEs, which is the second important reason

 

We can conclude that the franchise system with several benefits for the Slovene economy can be used both as a support system for SME development as well as a case of good practice in the area of coaching.

 

W1f: Round table was chaired by ICPE. It summarized the key findings of the ICPE research and within the framework of the Trainet project traced the follow up strategy for the future activities in the area of supporting young SMEs and especially franchise systems.

 

It has also shown the need for further systematic analysis of the training and other support needs for giving franchising and impetus in evolving the mechanisms that may make this business approach even stronger.

 

Since the Slovenian SME sector is quite well researched, which includes also participation in Global Entrepreneurship Monitor and several other general studies and contests related to SMEs, we deliberately wanted to point out to franchising as a route to succeed with financially austerity for their functioning in Slovenia.

 

As already mentioned, franchising as a sort of “initially incubated” entrepreneurship, which puts the entrepreneur – franchisee right onto the market front. As it was mentioned in the ICPE SME Trainet Research Report, in the Paris meeting of the World Franchise Council in March 2009, excellent examples of using franchising as a safer and obviously well established route of entrepreneurship development was shown.

 

Unlike in the environment of the transitional economies including Slovenia, such efforts in the developed world have been supported by quality marketing research surveys of respective franchise systems. Thus it was made clear that franchising has been applied for this purpose elsewhere but not yet in the transitional economies of countries like Slovenia.

 

Meeting our counterparts in franchise support systems like CEED (described in the ICPE study, to be presented at the Trainet conference in Finland), Chamber of Commerce, Chamber of crafts and entrepreneurship, ICPE and others confirmed the strong point of the French Trade Minister that she made in her speech on the occasion of the Franchise Expo in Paris, last March that franchising was a ready made tool for SME development especially in the times of economic crisis.

 

W1g - Where can one find the information on franchising and franchise systems?

 

This session was specifically addressed to the potential franchisees, currently independent entrepreneurs, graduates of Higher Education and those transiting from the status of an employee (or unemployed) into self-employment. A special attention was paid also to current would-be franchisors, who overestimate their own potential to run a franchise system. Most of participants were from young SMEs, functioning between 2-4 years with some potential to grow through franchising approach and had to first answer the following questions:

 

- Am I good enough to be an independent entrepreneur, a franchisor or is it better that I become a franchisee of an existing franchise system, being it Slovenian, European, American or of any other provenance?

- What are my personal traits in terms of leadership or followership?

- What are my family ties and potentials to run any of the above mentioned types of business?

- What are the limits of my financial potential for investment?

- Where can I find information on national and international franchise systems, including the printed directories, web-site directories of the national franchise associations, international franchise brokers, the journal Entrepreneur and others?

- What can I get from further workshops and seminars on franchising?

- Which are the best guides on franchising and which languages?

 

In the picture bellow our model of searching for information on franchising is presented:

 

Picture 2: A model of searching for information on franchising

 

pic2

 

 

Workshop 2: The ICPE round table on the support systems for SME development in the field of franchising and on good practices in this domain, Ljubljana 25th November 2009  

 

W2a Purpose of the Workshop W2

 

On the 25th November ICPE organized the second Workshop - W2, as a round table on the support systems for franchising development in Slovenia as a direct continuation of an earlier Conference on Franchising An Approach to Combat the Economic Crisis. The overall purpose of the W2 was to contribute to the mapping the current activities related to the development of franchising by various institutions that have been or could be involved in such activities and to the identification of good practices in this field that could be interesting for those entering the field of franchising and support to franchises.

 

W2b Objectives of the Workshop W2

 

  • Discussion of training and supporting offers for young SMEs based on the ICPE research report for the SME Trainet project, focus on franchising;
  • Development of new training and support offers based on lessons drawn from the identified cases of good practices. For this task the participants were expected to agree on the following:

- Initialisation of gathering of information on franchise system in Slovenia using EFF criteria to create insight into franchising as a tool for SME development and their specific development needs;

- Identification of the contribution of individual stake holders to the development process of the franchise sector in Slovenia and anticipate possibilities for their further involvement in the development process related to different target groups in the process related to the improvement of the quality of franchising practice and its contribution to broader SME development (e.g. as a spill-over effect of innovative practices).

- On the basis of the cases of good practices identified both in the W1 as well in the preceding International Conference on Franchising to propose specific networking and cooperation by the providers of support to SMEs, focus on franchising, and single out especially complementary rather than competitive activities possibly in a form of joint projects.

 

On the basis of the leads to the W2 and discussion within the W2 we can report the following:

 

W2c Participants of the W2

 

The following institutions / firms were represented at the workshop that followed the conference on franchising:

 

-          ICPE, International Center for Promotion of Enterprises http://www.icpe.si/

 

-          CEED Slovenia - Center for Entrepreneurship and Executive Development http://www.ceed-slovenia.org/web/default.aspx

 

-          Chamber of crafts and small business http://www.ozs.si/eng/prispevek.asp?IDpm=19

 

-          Gea College for Entrepreneurship –  http://www.gea-college.si/

 

-          Chamber of Commerce of Slovenia - http://www.tzslo.si/

 

-          Chamber of Economy of Slovenia for the Ljubljana region http://www.ozljubljana.si/

 

-          Podjetnik – Entrepreneur (journal) http://www.podjetnik.si/

 

-          Linea Snella – franchise company http://www.lineasnella-centres.com/

 

-          Adler Coaching Franchise Slovenia http://www.abmss.si/

 

W2d Background of the workshop W2 (round table)

 

As a part of the research report of this programme ICPE collected information on the mandate of institutions involved in the entrepreneurship development and possibly also to the franchise development. The acquired insight would help in the finalisation of a proposal for further cooperation among the stake holders in the process. Due to the different optics of looking at the matter and different financial interests by different institutions that were present at the round table the idea of signing a letter of intent or MOU by those interested was agreed upon. This may lead to the formation of a consortium of stake-holders.

As already mentioned the W2 followed two events, namely the W2 on franchising organized by ICPE jointly with the Chamber of Commerce, Slovenian Franchise Association and the American Embassy in Ljubljana in March 2009 as a part of the Trainet project. The next in the row of interlinked events was the Conference on Franchising as a Tool to Combat the Recession. The conference was co-sponsored by the European Franchise Federation and was organized on the same day as W2 on the 25th November 2009. As matter of fact the Conference that further to W1 identified the required support mechanisms for franchise SMEs as well as cases of good practice, in our case, support to Linea Snella and to Adler coaching franchise, as well as their own good practice of supporting the joining entrepreneurs – franchisees. The Directors of the German, Greek and the Slovene franchise association took part in the discussions that were related to the growth and employment generation through franchising especially in the times of economic crisis, to the specifics of small SE European markets, legal and ethical issues of franchising and economic advantages of this approach in comparison to independent starting the business. The need for increased transnational cooperation in this process was emphasized.

 

On the top, several cases of successful international franchise systems (good practices were presented, those that have already entered the Slovene market on that will enter the market in the near future. Potential of each of them for growth and employment generation in the Slovene economy was discussed. At least two of them fall into the group of LOHAS companies, addressing the customers that are conscious of their health and their potential for personal growth within a healthy and sustainable environment.

 

Both the W2 as well as the preceding conference on franchising were organised at no direct cost to the SME Trainet project, except for the cost of human resources that have been reported in the financial tables.

 

W2e Transferability of good practices within franchising approach and among institutions supporting SME development

 

One of the topics of the round table was transferability of business models within EU.

 

The workshop participants agreed that it was much easier to say as it was to really emulate good practices in different environment. In our case we are confronted with two set of good training practices related to SME development.

 

The first one entails business practices of a specific franchise system that spreads within the same or different regions of the same country or it can grow internationally. The question that remains open is whether two units of Re/Max, Linea Snella or even McDonald's - one in Slovenia and another one in Austria or Croatia work the same way, deliver the same type of services or deliver them in the same manner.

 

When discussing good practices in franchising it was emphasized that transfer of good practices into different environments requires as a necessity adjustments of their modalities into specific realities.  Transfer of business methods from one system of business culture and macroeconomic environment determined by one set of regulatory specifics, different business heritage and practice, to another business environment thus require adjustment, which normally takes more or less than one year of intensive piloting. The Code of Ethics for Franchise Companies adopted by the European Franchise Federation that is recognized by the EU Commission as a legitimate representative of national franchise associations that have joined the EU code of ethics requires by member franchise systems pilot operations in the above mentioned duration and specifies also the necessary conditions.

 

The pilot operation is meant to establish specific modalities of transferring a specific business format franchise from one into legality (i.e. state). Transferability shows the extent and quality of transferability of e.g. beauty parlor or slimming centre from Slovenia to Austria, coaching center from Austria to Slovenia, Italian Pizza shop from Italy to Slovenia etc. This was demonstrated in the cases of the Austrian Adler franchise that started functioning in Slovenia, Linea Snella, which is in the process of piloting in Austria) and PizzItaly that has just been closed down after transfer from Italy to Slovenia.

 

Introducing franchising is in fact playing an ever greater role in introducing commercial know-how into countries with developing economies or with economies in transition. Such micro-economic reform complements the large scale economic and financial changes being brought about by the rapid spread of globalised commercial and industrial development. International franchising is playing a vital role in ensuring the productive transfer of technology and enhanced levels of foreign investment that are so important to emerging economies (UNIDROIT, 2007, Guide to International Master Franchise Arrangements, Rome)

Similarly transfer of specific training, consulting and coaching practices may require adjustments to different set of habitual social distances in teaching and especially group learning, different set of hierarchies in the learning institutions, different modalities of preparing training materials etc. Moreover, different habits in discerning one's intimate business experience and leadership practices may vary from one set of cultural, social, socio-psychological, economic and legal tradition to another. This by no means would result into insurmountable differences when it comes to transfers of good or excellent business practices.  Once the yardsticks of establishing good practices have been set the expected transfer depends on a variety of testing experience and step by step adjustment to local conditions. EU with plethora of cultural differences may require special attention in this respect. Moreover, experience with inadequate practices might be as relevant as experience with good ones. Learning from mistakes of others may be substantially less costly than learning from one's own mistakes. It is well known that learning management and management development in Japan was for a long time not possible in the same manner as in Western institutions due to large social distance between trainer and trainee, which impeded smooth communication in groups (e.g. group learning and action learning). Action learning that was practiced in the US decades ago, got free way to the European management learning institutions much later and this happened primarily within non-traditional , non-academic environments of practice oriented post-experience training institutions in Western Europe first.

W2f Target groups that require specific services in supporting activities to young SMEs in the area of franchising

 

The round table elaborated upon a possible strategy for formulating a new project that would focus on supporting several target groups that are important within the franchise business, where internationally available guides for development of the franchise systems may not be sufficient, although could serve as the first step in learning of the franchise business altogether.

 

  • The first group is represented by the successful domestic businesses, mainly in the service domain, that could grow through franchising. They may be trying to use this approach but lack specific tools to structure their tools for assisting franchisees, cannot come up with a good agreement or marketing structure or would like to run a proper pilot as implied in the Code of ethics for franchise companies of the European Franchise Federation. Support structure to assist franchisors in these and similar situations can be an important target for a franchise development centre.

 

  • The second group are domestic companies that want to grow internationally and extend their “good practices” elsewhere. The nearby markets for Slovene franchisors are in the SE Europe. Their legal framework and protection of intellectual property as well as other business development infrastructures may need special attention. Other group of international markets are those in the Mediterranean and in Central Europe. Support of the experienced entrepreneurs and legal experts is required for those.

 

  • The third target group are foreign franchisors that would like to enter the Slovene and possibly also the surrounding markets. They usually need brokers to identify adequate master / development franchisees or joint venture partners in Slovenia. The information on legal framework and potential partners in Slovenia available through the national franchise association and chamber of commerce may also be provided at the newly proposed »franchise development centre« in Slovenia. This group may be of special importance due to the transfer of know-how and technology that may not be available locally.

 

  • The fourth group are potential franchisees that require special attention. They need basic information on franchising, training, methods of self-assessment to be able to choose their field and financially affordable franchise that they would like to join (see the model of searching for information on franchising in the Picture 2). In some countries special counsellors can advise this target group, which might also be connected to franchise brokers that are normally paid by franchisors to identify potential franchisees, master franchisees and franchise developers. Of course, it should be noted that the final selection of those potential entrepreneurs – co-investors has to be made by the franchise system.

 

All four categories of entrepreneurs deserve special support and specialist that may assist them in achieving their desired business objectives. The reason of inviting the institutions that are / could be concerned with specific aspects of this process to the W2 was in fact looking for a proper form of a holistic - integrated support system that could be built as a joint project among them.

 

It is encouraging that the representatives of three Chambers of Industry and Commerce were involved, e.g. The Chamber of Craft and Entrepreneurship of Slovenia, the Chamber of Commerce of Slovenia, the Chamber of Economy of the Ljubljana region. With their supportive attitude there was involvement of the Gea College for Entrepreneurship, the Center for Entrepreneurship and Executive Development CEED Slovenia, and the monthly journal Entrepreneur that had also advertised the SME Trainet project.

The W2 was convened by the International Center for Promotion of Enterprises – ICPE in cooperation with the Slovenian Franchise Association.

 

Good practices’ cases in franchising and support to franchise systems in Slovenia that were presented in the preceding Conference were present also in the round table. This has clearly marked both Linea Snella (a franchise for a healthy improvement of the human body) and CEED – the support centre for SME development as candidates for presentation at the Helsinki conference in May 2010. The two were requested to take part in the conference, one as a “trainee”, another one as a trainer and supporting system.

 

W2g:  Brief Conclusions of the Workshop

 

The participants agreed on the following:

 

a)      There should be a data bank on franchising established in Slovenia that would comprise of the key indicators such as branch of a company, brand name(s), number of its own and franchised units, key elements of the business services, elements that are franchised, profile of franchisee they require, payments of different fees, existence of the franchise manual, initial and continuous support offered to franchisees, mortality rate of franchise units;

b)       Cases of good and cases of bad practices, criteria for good practices should be collected for training purposes;

 c)      Data collected within this project on individual support institutions should be presented in a condensed format and on its basis possibilities for joint projects established;

d)       Cooperation among support institutions should be sought within joint projects in the areas of priority (e.g. integrated – holistic support systems, specific training and coaching inputs, etc.);

e)       Precautions re transferability have been formulated as mentioned above;

f)        International cooperation within the SE European region should be continued under the guidance of the relevant EU institutions in SME development and franchising associations;

g)       Further cooperation within Slovenia of the present and some other related institutions that can be marked as support system will depend on the willingness of cooperation and available resources that would be provided by different financial supporters. The domestic ones have been listed in the ICPE SME Trainet Research Report, the EU programmes related to SME development will also be approached.

 

 

W2h: the elements of the proposal of the Program of the Autumn 2010 Workshop 

 

Welcome speeches

 

Introductory presentations:

  • Lessons from the SME Helsinki conference of the SME Trainet Project
  • International franchising as a tool for transfer of good practices and SME development: arrival of foreign systems and domestic systems in Slovenia
  • Experience of expansion abroad in the SE, CE and other regions

 

Cases of good practice

 

Examples of support practice for franchisors

  • FranAdria: specialized  agency for consulting and training in franchising
  • CEED: holistic support to new and the existing franchise systems
  • WIPO: cases of mediation and arbitration in franchising
  • Example of a Hungarian brokering institution

 

Presentation of new franchises and their development needs

  • Husse
  • SafeShine
  • Si-Mobil

 

Round table on the support needs and excellence


Annexes to the Workshop 1 and 2 (W1 and W2)

Photograph of W1

 

pic3

 

 

List of resource persons & stakeholders to Workshop1:

 

  1. Igor Pavlin, ICPE, SME Trainet Project Coordinator for Slovenia
  2. Igor Marinšek, Automobile Association of Slovenia (founder of the franchise system BHS- automotives)
  3. Peter Volasko, President of the ICPE Council (Board)
  4. Brad Freden, Chargé d’Affairs, Embassy of the USA in Slovenia
  5. Mariča Lah, CEO, Chamber of Commerce of Slovenia
  6. Boris Popovski, , U.S. Department of Commerce
  7. Cameron Werker, U.S. Department of Commerce
  8. Alex Gregorič, Mars Venus, d.o.o.
  9. Drea Fannigan, Embassy of the USA in Slovenia
  10. Dušan Žerak, CEO and owner, FranAdria, Ljubljana (franchise development agency)
  11. Edita Bečić, expert, FranAdria, Ljubljana (franchise development agency)
  12. Barbara Humar Gerbec, CEO and co-owner of the Franchise System Linea Snella
  13. Barbara Mrzlikar, CEO, CEED Slovenia
  14. Teja Krašovec, Linea Snella, co-owner of the Franchise System Linea Snella

 

Photos from the ICPE conference on Franchising – W 2

pic4  

Participants from Austria, Croatia, Russia, Serbia, Slovak Republic and Slovenia

 pic5

Participants from Bosnia, Croatia, Italy, India, Poland, Russia and Slovenia 

 

1. SME TRAINET (PURPOSE AND OBJECTIVES OF THE PROJECT SME TRAINET

  • Identification of the modalities of assistance upon after 2 years of existence of the independent SMEs in craft / service sectors selected by individual project partners.
  • ICPE chose franchising. Justification (see bellow) has been approved by the lead partner.

2. PURPOSE OF WORKSHOP 2

  1. Creation of the list of all franchise system in the country using EFF criteria
  2. Note the contribution of individual stake holders in the development process of the franchise sector in Slovenia and anticipate possibilities for their further involvement in the development process related to different target groups in the process related to the improvement of the quality of franchising practice and its contribution to SME development.

3. JUSTIFICATION OF THE FOCUS: SURVIVABILITY OF FRANCHISE SYSTEMS IN THE WORLD

  • In the world 4/5 of franchise unit survive the first 5 years due to the quality of support offered by franchisors to independent entrepreneurs – franchisees. Only 1/5 of non-franchised independent units survives the first 5 years
  • Franchising provides “incubated” functioning of within the systems, thus support is required to both franchisors as well as to joining enterprising candidates. Quality support to franchisees can be provided by quality franchisors. This includes:
  • Satisfactory transfer of know-how and technology
  • Permanent human resource development: training, coaching, consulting, networking, etc.
  • Tailor made and timely assistance to franchisees in need

4. FRANCHISING CAN BE SEEN AS

  • „School of sustainable entrepreneurship”
  • Mechanism for transfer of know-how and technology
  • Modality of fast growth of enterprises with the inputs of associated entrepreneurs
  • Productive employment potential within franchise networks 

5. THE NEED FOR SUPPORT TO FRANCHISING IN THE TRANSITIONAL ENVIRONMENT:  

  • Franchisor’s multiplier effect in creating new sustainable businesses
  • Compensating part of the evolution of private entrepreneurship in transitional economies in Central and Southern Europe, especially in member countries of the EU.

6. TARGET GROUPS SERVED BY THE SUPPORT SYSTEMS FOR FRANCHISE DEVELOPMENT

  • International franchise networks (including recruitment of master and development franchisees, their training and adjustment to local conditions
  • Domestic franchisors (ABC franchising, legal issues, international expansion)
  • Franchisees (Information, self-assessment, training consulting,) 

7. THE ROLE OF INDIVIDUAL SUPPORT INSTITUTIONS 

  • Assesment of different types of their current inputs
  • Possibilites and synergies of networking of the institutions starting with the Project SME trainet
  • Further steps and follow up

8. FEEDBACK OF PARTICIPANTS ON EACH OF THE ABOVE TOPICS

 

 

Ljubljana, 9 June, 2010