Sustainable Development Through Franchise Innovation in the Digital Economy

Introduction

International franchising as a global growth strategy is gaining its popularity (Justis, & Judd, 2002; Thomas & Seid, 2000; Chen, & Justis, 2006). For example, the U.S. Commercial Service estimated that India has an estimated market size of $50.4 billion in the franchise industry and international franchising is a growing industry for U.S. franchises to expand in India (U.S. Commercial Service, 2018). In addition, Brazil has 1,643 franchising chains and 79,988 franchising units, ranking the Brazilian franchising market as the 6th largest in the world (in number of units) and the 4th largest (in number of franchise chains) (U.S. Commercial Service, 2018). The popularity of franchising continues to increase, as we witness an emergence of a new digital business model, Netchising, which is the combination the digital power of the Internet for global demand-and-supply processes and the international franchising arrangement with local responsiveness (Chen, Justis, & Yang, 2004; Chen, Chen & Wu, 2006). For example, Entrepreneur magazine – well known for its Franchise 500 listing – in 2001 included Tech Businesses into its Franchise Zone that contains Internet Businesses, Tech Training, and Miscellaneous Tech Businesses. At the time of this writing, 33 companies are on its list (TBF, 2019).

In the 21st century, there is a need to develop digital business solutions for sustainability achieving the 17 sustainable development goals (SDGs) set by the United Nations in 2015 (UNSDG, 2015). For example, the Better Business, Better World (BBBW, 2019) shows that it makes good business sense for companies to pursue the SDGs to address the interconnections of global risks as indicated in the Global Risks Interconnections Map 2019 (World Economic Forum, 2019). New evaluation tools, such as The Chemical Sector SDG Roadmap (WBCSD, 2018) and Trucost – part of S&P Dow Jones Indices, a division of S&P Global (SB, 2018), help companies develop SDGs-aligned business strategies. Furthermore, Impact 2030 (IMPACT2030, 2019), a private sector led coalition, help companies align employee volunteer programs to meet the SDGs. Social franchising, i.e., using franchise innovation to replicate proven sustainable solutions where economic and social aspects become mutually supportive to enhance their impact on communities' development, is an effective entrepreneurial approach to scaling up solutions to achieve SDGs (Eggers, & Macmillan, 2013; Asemota, & Chahine, 2017; Samsudin, & Wahab, 2018).

In his best seller, Business @ the Speed of Thought, Bill Gates (1999) wrote: “Information Technology and business are becoming inextricably interwoven. I don’t think anybody can talk meaningfully about one without talking about the other.” (p. 6) Gates’ point is quite true when one talks about digital business solutions using franchise innovation. Thus, to see how digital business solutions can be “meaningfully” used in franchise innovation for sustainable development, one needs to know how franchising really works and how to effectively engage in digital business management for franchise innovation (Eggers, & Macmillan, 2013). As a prelude to examining the chapter, we discuss how to build the franchisor-franchisee relationship in franchising for franchise innovation; how to develop digital business for franchise relationship management, how to harness information technologies to implement the digital business around the franchisee life cycle, how to align the digital business and media management implementation with application service providers, how to focus the attention to grow the franchisees at different stages of the franchisee life cycle; and how to go global through a “Flying High, Landing Soft” platform to leverage established social networks to reduce risks, using an illustrative example of making cities resilient to show how to advance SDGs through university-industry partnerships, and finally we conclude the chapter with some future trends.