The Go-vegetarian movement is gathering stream around the world. A home grown restaurant chain Arnapurna Ratna is planning to open its outlets abroad starting with the US, the UK and Canada. The management of Arnapurna R

Seizing the Go-vegetarian movement, the management of Arnapurna Ratna has decided to foray into overseas market through franchisee model starting with the US, the UK and Canada. There are market research inputs which indicates that the number of vegetarians in the UK has risen significantly. In this context, the decision taken by management to go global is correct and it is further worth-mentioning that 'franchise model' is better than other modes of operation because it has the following advantages: Suitable for business expansion: Franchising is one of the only means available to access venture investment capital without the need to give up control of the operation of the chain in the process. After the brand and formula are carefully designed and properly executed, franchisors are able to sell franchisees and expand rapidly across countries and continents using the capital and resources of their franchisees and can earn profits commensurate with their contribution to those societies while greatly reducing the risk and expense that would be inherent in conventional chain operations. Legal considerations: The franchisor is relieved of many of the mundane duties necessary to start a new outlet, such as obtaining the necessary licenses and permits. In some jurisdictions, certain permits (especially alcohol licenses) are more easily obtained by locally based, owner-operator type applicants while companies based outside the jurisdiction (and especially if they originate in another country) find it difficult if not impossible to get such licenses issued to them directly. For this reason, hotel and restaurant chains that sell alcohol often have no viable option but to franchise if they wish to expand in another state or province. Operational considerations: Franchisees are said to have a greater incentive than direct employees to operate their businesses successfully because they have a direct stake in the start-up of the branded business and the tangible assets that wear the brand name. The need of franchisors to closely scrutinize the day-to-day operations of franchisees (compared to directly-owned outlets) is greatly reduced. Cost considerations: The franchisee models enables the principal organization to reduce fixed costs as the major infrastructure costs are shared by the franchisee.