ANALYSIS OF FRANCHISING RISK MITIGATION: EVIDENCE FROM MEDIUM SCALE FAST-FOOD INDUSTRIES
Purpose: The purpose of this research is to examine the franchise business risks and their mitigation strategies. The effects of continuous improvement processes on risk identification, assessment, and mitigation are also included in the model
Research design, data and methodology: Data was collected through a survey of 32 franchise businesses. The authors used a qualitative research approach, the data were analyzed using the House of Risk (HOR) approach, which is one of the medium-scale risk management strategies in the fast-food franchise business. The HOR technique is divided into two phases: HOR 1 to identify risk events and priority risk agents based on the Aggregate Risk Potential (ARP) value, and HOR 2 to determine the best preventive action. Results: The results show that based on the HOR1 approach, the cause of the possible risk with the highest ARP value is turnover that is not in accordance with the objectives. Based on the HOR 2 analysis, a possible and effective risk mitigation strategy shows that assistance from farmers to franchisees is a preventive measure for the sustainability of a medium-scale fast-food franchise business. Conclusions: This study contributes to the advancement of knowledge about the relationship between mitigation strategies in franchise businesses.
Franchising, Franchise system, Risk, Mitigation Strategy, House of Risk