Kidogo: Addressing the Childcare Needs of Low-Income Families in East Africa

In this white paper, authors Jill Howard, Fiona Wilson, and E. Hachemi Aliouche explore how Kidogo, an innovative East African social enterprise, is harnessing the power of social sector franchising. By discussing Kidogo’s combination of best-practice early childhood Centres of Excellence with a social franchising method that supports the quality improvement and growth of local childcare micro-businesses, the authors provide insight into Kidogo’s expansion and success and look forward to the future of the organization

Mitigating risks in internationalization decisions : the choice of the optimal entry mode

Version of RecordIn this paper we propose an innovative prescriptive model for internationalization strategy based on decision analysis theory that allows for optimal decision making regarding the choice under uncertainty between alternative international entry and/or expansion modes. Based on a case study of McDonalds’ expansion in a developed market and in an emerging market, we discuss the decision making implications by emphasizing the inclusion of risk and uncertainty and the importance of sensitivity analysis on the evaluation of the model results. The analysis compares the internationalization choices of franchising and foreign direct investment, as two distinct levels of foreign commitment. The findings suggest that in relatively stable environments it is relatively easier to mitigate the risks through tactics such as cost control, so that a higher level of commitment is justified under favorable macro-environment conditions. In less stable or unfamiliar countries, the risks of day-to-day operation may be too high to be mitigated, such that a lower risk alternative is always optimal, and discrete improvements of the political and economic climate are irrelevant.Samii, M., Aliouche, E. H., & Wright, R. (2008). Mitigating risks in internationalization decisions: The choice of the optimal entry mode. Retrieved from http://academicarchive.snhu.ed

Providing Clean Energy Solutions to India’s Bottom of the Pyramid Population

Despite a scheme launched by the Indian government in 2017 that has declared achieving close to 100 percent electrification in the country, studies have shown that only 65 percent of rural enterprises in India report having electricity grid connection. While millions of households have been positively impacted by access to electricity, small businesses and smallholder farmers (those with holdings of less than 2 acres) in rural India have been left out of the equation or receive very unreliable power supply. Byproducts of the energy poverty experienced by India’s Bottom of the Pyramid population include an enormous carbon footprint produced by the use of traditional fossil fuels such as diesel and kerosene, and economic stagnation as a result of the agrarian crisis in India. Working to address each of these challenges is Oorja Development Solutions, a social enterprise established in 2016 with a mission to “substantially and cost-effectively scale last-mile distribution of integrated energy solutions to revitalize the agrarian economy, alleviate poverty, and fight climate change in rural India.” In this white paper, authors Jill Howard, Fiona Wilson, and E. Hachemi Aliouche discuss Oorja Development Solutions’ creation as well as the business model by which it operates. While Oorja does not currently have any franchisees, this case study explores why the company has considered implementing a franchising system as well as the reasons why it is not currently moving forward with the model. By also detailing the ingredients to Oorja’s success and opportunities for future growth, this case study aims to provide insight into a successful social enterprise as well as the logic for choosing whether or not to execute a social sector franchising system

Institutional Environments And The Internationalization Of Franchise Chains: The Contrasting Cases Of Three North African Countries

Franchising has become a dominant model of retailing in the Western world and is rapidly expanding in emerging countries. This paper is an attempt to explain the significant  differences in the development of franchising in three emerging countries: Morocco, Algeria and Tunisia. Explanations can be found in the general institutional environment in these countries, including the political and economic environments; governments' willingness to modernize the distribution structures; and the legal and regulatory environments specific to franchising. Our analytical framework is based on institutional theory (DiMaggio & Powell, 1983), a framework that provides further insights beyond the approaches based on economic efficiency (agency theory and the resource scarcity perspective). Based on an analysis of the documents in the major public databases in the three countries, supplemented with field research, we propose an analytical framework that helps explain the uneven developments of franchising in the three North African countries based on the specific institutional environment of each country. This study thus provides empirical evidence supporting the institutional theory of franchise expansion. It appears that institutional theory complements agency theory and resource scarcity theory in explaining the development of franchising in emerging markets: while agency theory and resource scarcity theory explain the motivation of firms to expand internationally through franchising, institutional theory helps explain the success or failure of these firms in the emerging markets they expand to

Does franchising create value? An analysis of the financial performance of US public restaurant firms

Author's OriginalIt is commonly believed that the franchising method of distribution provides strategic and operational benefits to the companies that adopt it. These benefits should result in superior financial performance as compared to that of firms that do not use franchising. Yet, the empirical evidence of the effects of franchising on financial performance is sparse and mixed. The purpose of this paper is to further examine the empirical evidence of the impact of franchising on a firm’s financial performance by using performance metrics (Economic Value Added and Market Value Added) that are extensively used in corporate finance. This study focuses on the US public restaurant sector. The results provide some evidence that franchising firms create more market and economic value than do non-franchising firms. A revised version of this paper has since been published in the International Journal of Hospitality and Tourism Administration. Please use this version in your citations.Aliouche, E. & Schlentrich, U. (2009). Does Franchising Create Value? An Analysis of the Financial Performance of US Public Restaurant Firms. International Journal of Hospitality & Tourism Administration, 10(2), 93-10

Re-Examining the Factors Affecting Systematic Risk of the Airline Industry

Risk is often described by investors as the uncertainty of a business’ success or failure, and in order to maximize shareholders wealth, managers must monitor risk. Given the competitive nature and volatile costs structure of the airline industry, understanding risk is important to effectively manage this business. Using time series and regression analysis, this study re-examines how systematic (market related) risk of a company’s common stock is linked to corporate behavior and financial performance for selected airline firms. Also, this study tries to explore the argument whether airline betas drift over time

Toward a strategic model of global franchise expansion

Abstract This paper develops the first global index of international franchise expansion that ranks countries according to their attractiveness to US-based franchise firms. A quantitative model combining insights from academic research and business practice generates a ranking of 143 potential expansion target countries according to their risk/opportunity profiles. The rankings suggest that countries with large markets and strong political and legal systems (large European countries, and Canada, Japan, and Australia) are the most attractive for US-based franchisors, while the small, unstable African countries are the least attractive. China (and the other BRIC countries-Brazil, Russia, India) though attractive from a market opportunity perspective, is nevertheless not highly ranked due to their significant risks and large cultural and geographic distances. This study reaffirms the importance of a strategic approach to international franchising decisions, underscores the importance of properly assessing the relative importance of key determinants in internationalization decisions, highlights the importance of a comprehensive and systematic assessment of the various risks in international franchising decisions, shows the usefulness of quantitative modeling in international franchising, and advocates the development of effective risk management methods in order to cope with rapid changes in the global marketplace