| Abstract [eng] |
Relevance of the topic. To create a new and successful business is a long, hard, knowledge and experience requiring process. Before starting a business many are aware that it is very difficult to work successfully from the very first days and come up with ideas to see the benefits of a business that takes a lot of time. Quite often the first visible results of the activity will be high costs and operating losses. For businessman nobody gives a guarantee that the business created will definitely grow and, therefore, he invests heavily in his risk capital hoping for the business success. Many would like to develop a business from the beginning successfully with less risk and know that their investments will certainly pay off. Such possibility can be seen in the franchise business model. Many people are wondering what the real franchise business benefits and costs are. Therefore, in this work, a cost-benefit analysis methodology and a franchise activity model assessment in the retail market will be developed. The object of this work is the franchise activity modeli in the retail market. The aim of this work is to analyze the model of franchise activity in the retail market the cost-benefit aspect. To achieve the goal the following tasks are formed: 1. To analyze the concept of a franchise business, refine the types and advantages and disadvantages of a franchise business model. 2. Examine the legal franchise business regulation and franchise sales and purchasing process. 3. To analyze the development of the franchise activity model in the world and in Lithuania and the features of cost-benefit analysis methodology. 4. To draw up a cost-benefit analysis methodology for evaluating the franchise activity model in enterprises operating in the retail market, after purging the essential advantages and disadvantages of the franchise. 5. Cost-benefit analysis of the application of retail market case studies. The analysis of scientific literature helped to clear the franchise business concept – the bilateral business relationship between the franchisee and the franchisor, during which the franchisor grants the franchisee exclusive rights to use his business system and brand for the agreed fee. The types of franchise business models were purged: distribution of goods, business format, production. The advantages of a franchise business are examined: a well-known brand, easier access to the market, less risk of failure. Franchise business disadvantages were identified as: operating taxes, management constraints, etc. Before starting a business with a franchisee, an entrepreneur needs to pay attention to these franchise business pros and cons and evaluate it properly. In Lithuania franchise legal relations were regulated in 2001. The Civil Code of the Republic of Lithuania defines franchise rights and obligations. The essence of franchise sales is the creation of a franchise sales infrastructure. Franchise purchase - successful completion of franchising stages. Both franchise sales and the purchase of a franchise have a clear structure and planned stages. The implementation of franchise purchase and sale phases is enforced by the franchise agreement. The franchising business model in the world is extremely popular with its wide range of business applications. This business model in Lithuania is not a new phenomenon, but entrepreneurs know very little about the franchise business model and its application. Currently, not only foreign capital is operating in Lithuania, but also the Lithuanian capital franchise is developing gradually. In the future, the franchise business model is projected to dramatically change in order to maintain such a successful international market. The cost-benefit analysis method includes financial, economic and risk assessment. The practical part of the work creates a franchise cost and benefit methodology for evaluating franchise performance. Identify data sources that help identify costs and benefits in the franchise business. To form analytical methods and to refine the indicators, which allow to estimate and measure the cost-benefit ratio while operating on the basis of a franchise in the retail market. Formulated analytical methods and indicators allow us to evaluate not only the benefits of the franchise business model, but also to compare the results of this activity model with the results of the units of the activity mark. An analysis of the cost-benefit analysis of the methodology used in the retail business market has shown that it is useful to carry out business with the franchise. During the research analysis two UAB Mokslininkas stores were evaluated. Both stores operate in the same area but one shop operates under its own brand and the other by a franchise. The research is carried out on the basis of data comparison between stores trying to clear the costs and benefits of a franchise store. The benefit to the franchise business during the period under review was significantly higher than the cost incurred. It is estimated that the amount of investment is really significant in order to start operations with the franchise, however, they pay off rather quickly in terms of the ratio of investment and operating profit. It has been investigated that the running costs of the franchise represent a very small part of the total cost structure. This shows that the cost of maintaining a franchise is low and they are unreasonably fearful. With franchising, the benefits are greater than with your own brand, as measured by index indices. The percentage of return on investment in both stores is high, which indicates that the return on investment and investment was beneficial. The positive value of a net present value indicator indicates an effective return on the franchise investment. This is also evidenced by the high importance of the annual growth rate of the franchise investment. A comparison of store indices has shown that absolute values are higher in the franchise store, while relative ones are in their own brand. The Franchise Store's activities are limited by the franchise agreement, which, in my opinion, has a more favorable trading environment for this store. Its own brand stores are free of restrictions, it works freely, but does not have more favorable trading conditions. |
