Potential enhancements for business performance through franchising: The case of coffee in Vietnam
Date of this Version
Drawing together themes from commodities trade, franchising and corporate governance, this paper has two principal objectives. The first is to describe the relationship between franchising and competiveness in commodities markets, specifically coffee in Vietnam. This paper explains the potential for franchising to reinforce the country`s competitive position in the production of coffee. It briefly defines franchising and outlines motivations for the choice of this business form, as well as conditions for the success of franchising in Vietnam.
Franchising as a business model is well-suited to help to address challenges that face the coffee industry in Vietnam for several reasons: it offers a means of effective and widespread distribution, supports awareness and strength of the brand, and has been recognised in developing and transition economies in the promotion of best practice in business management. These same principles may be applicable to a range of commodities in other countries such as, for example, fair trade olive oil from Palestine. The second objective of this paper is to underscore the importance of good corporate governance to franchising and so to its contribution to developing economies.
While the continued success of franchising relies on a well-tuned regulatory framework and on good corporate governance, at the same time, due to its emphasis on the sharing of a franchisor`s intellectual property and business practices, franchising can help ensure adoption of best practice in commercial enterprise of transition economies.