Relevant economic factors affecting franchise operations in the services and trade sectors

Abstract

The paper analyzes the basic elements of the economic efficiencies of franchises in the field of trade and services in Serbia. Basic economic performance indicators of are analyzed, which include payback period, an accounting rate of return, net present value, profitability level and break-even analysis. External factors affecting the overall business, especially the choice of locations, were analyzed through the impact of the standard of living of the population. Calculations and analyzes were made on the basis of the balance sheet data of individual franchises and statistics on the trends of living standards for individual cities and regions in the Republic of Serbia. Population and standard of living have proven to be a significant factor in business decision making. Business premises can be reasonably opened in areas with an average population of about 3.33% of the total population. In regions and cities with a lower percentage of population, it is justified to open franchises if they are situated in high-frequency locations such as highways and/or tourist destinations. It is important to note that for management, in addition to all the indicators analyzed, it is very important to maintain standards that include recognizable appearance, standard quality offer, well-trained staff and everything else that the brand carries with it.