THE IMPACT OF BUSINESS CONDITIONS TO FRANCHISING IN CATERING SECTOR IN LITHUANIA

Franchising is a very popular business development form in the world, especially in service sector. However, it is not widely used in new EU member states, such as Lithuania, and other developing countries. Therefore, the aim of this article is to analyze prevalence of franchising in Lithuania and potential of its usage among Lithuanian capital companies operating in catering sector. It is determined that franchise system has five main elements and all process of franchising business system establishment, which consists of four steps, is influenced by four groups of factors: marketing, management, legislative and human. To find out the situation of franchising business in Lithuania a questionnaire survey of Lithuanian capital companies operating in catering sector was carried out based on the model of franchise system development created by article authors. Seven assumptions about unfavourable business conditions were tested and six were found to be unsupported. Results of investigation revealed that these companies have a strong potential to develop their businesses using franchising, however, it is not mainly the business conditions that stop the use of franchising. The main obstacles are: the lack of knowledge about intellectual property protection and foreign markets, lack of unique and exclusive business ideas and strong brands, as well as lack of information about franchising as a business development form.