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Entrepreneurship is no longer an abstract concept. There is increasing demand and interest in placing Entrepreneurship (new business formation) as a key element for economic development and revitalisation of lagging geographical areas.
Entrepreneurship has also attracted the interest of many academic researchers who have demonstrated that increase levels of entrepreneurial activity can have positive repercussions on employment generation (Storey, 1994; Birley, 1987; Kirchoff and Phillips, 1988 and 1992; White and Reynolds, 1996), and on economic growth (Kent, 1982; Sexton, 1986; Dubini, 1989; Storey, 1994; Wennekers and Thurik, 1999).
At this point, it is important to remark that franchising is a relevant dimension of entrepreneurship which gives rise to s specific type of entrepreneurial activity, but in this case, the franchisee shows important differences as compared to the conventional entrepreneur.
Franchising is characterized by a contract stipulating the obligations of two parties, namely the owner and the franchisee (Kaufman and Dant, 1995). The franchisee aims to exploit the market in a specific area by following the operating procedures of delivering the franchised service. The extent of standardization, in what concerns distribution of products, depends on the city of the franchised business. The degree of support from the franchise owner also varies.
In addition, the franchisee is not as independent as the classic entrepreneur. However, this person is neither just a passive follower in the partnership. Their particular efforts are not to accept the given conditions, but actively to change them by making incremental adaptation and innovations even if it creates conflicts with the other partner, the franchiser. A particular characteristic also is that the franchisee innovates within a certain framework - the standard concept - thus the franchise contributes to developing co-operative and inter-organisational relations. In traditional franchising the relationship is asymmetric in terms of power since the franchiser has control and formally, indeed contractually, regulates the relationship. Hence, the franchising system is a type of vertical integration. Empirical literature shows that the relationship between the franchisee and the franchiser can become rather more symmetric if the franchiser understands how to utilize the innovation of the franchisee and diffuse it to other franchisees operating in other countries (Sundbo et al., 2001).
Consequently, the differences between conventional entrepreneurship and franchising motivates us to evaluate the characteristics of the individuals who are interested in entrepreneurial activities as compared to those who recently . To attain this goal, we use information available from the Centre for Entrepreneurship & Business Research (CEBR). We also take into consideration several variables related to demographic and socio-cultural factors in order to offer a broader view in what concerns the characteristics and motivators of potential and recent entrepreneurs in Romania.
DATASETS FROM THE CENTRE FOR ENTREPRENEURSHIP & BUSINESS RESEARCH (CEBR)
The data used to carry out this document comes from the Centre for Entrepreneurship & Business Research (CEBR) databases for the year 2006. The CEBR is an Romanian organisation which main objective is to provide high-quality qualitative and quantitative information about individuals and enterprises in Romania, in order to promote business analysis and academic research. The data used in this report corresponds to that related to the individuals surveyed who can exhibit either entrepreneurial intentions or entrepreneurial activity.
The original database used to reach the aim of this research contained 1,574 observations from Romania. However, in the interest of following a rigorous methodology, only individuals for whom a complete dataset of the independent variables can be constructed are included. Thus, data availability limits the sample to 1,449 observations, 812 (56%) men and 637 (44%) women. . In addition, individuals residing in Bucharest represent the 22.71% of the sample (329) whereas 1,120 (77.29%) live in other areas of Romania.
Next: Potential franchisees in Romania 2
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