INTRODUCTION
INTRODUCTION

Author(s): Aleksandar Erceg
Subject(s): Economy, Geography, Regional studies, Business Economy / Management, Editorial
Published by: Sveučilište Josipa Jurja Strossmayera u Osijeku, Ekonomski fakultet u Osijeku
Keywords: Eastern Europe; franchising; economy; introduction;
Summary/Abstract: Although roots of franchising can be found in the 10th century (King Edgar and beer places) and in the first half of the 19th century in Germany, the first representatives of modern franchising can be found in the USA in the second part of the 19th century (Singer Sewing Center, General Motors and Coca-Cola) (Erceg, 2017). In the second part of the 20th century, there was a new phase of franchising development – business format franchise, which was introduced by McDonald’s and Ray Kroc. Business format franchising gained popularity and was spread worldwide by American fast food restaurants (McDonald’s, Subway, Dunkin Donuts, etc.). These fast food restaurant franchisors demonstrated to other service industries how to standardize and replicate successful business systems (Alon, 2014). Franchising entered countries in Eastern Europe at the end of 1980s and the beginning of 1990s when those countries switched to a market economy and allowed entrance of foreign companies and capital. It was then that the franchising revolution started, mainly by foreign franchisors entering the country, thus initiating actions of local entrepreneurs who started using franchising as a growth strategy as well.

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