Introduction
Culture in a global economy is a critical factor in international business. While many
business transactions make economic sense, the ability to successfully fulfill profitable
relationships often depends on being able to reconcile international differences arising
from separate cultures.(Wong, n.d., p.1) Understanding cultural differences is an initial
step, but managers also need to engage in learning processes to develop international
cultural competence. Cross-cultural training enables managers to acquire both knowledge
and skills to fulfill the role of cultural agents.(Wong, n.d., p.1). Advancing cultural
intelligence and international cultural competence is critical to the future success of
managers and leaders working in a global context. (Wong, n.d., p.1).
In these pages, I will analyze the cross-cultural differences between the United States and
Czech Republic, determine comparative advantages in this country, and recommend ways
to minimize the risks of establishing a franchise overseas.
According to the web site http://www.allbusiness.com, franchise is a legal and commercial
relationship between the owner of a trademark, service mark, trade name, or advertising
symbol and an individual or group wishing to use that identification in a business.
(Allbusiness, n.d., *ƒ‚¶1)
Each franchise business has been authorized by a parent company, or franchisor, to sell
their goods and/or services either in a retail space or a designated geographical area. The
franchise governs the method of conducting business between the two parties. Generally, a
franchisee sells goods or services supplied by the franchisor or that meet the franchisors
quality standards. This relationship is regulated by FTC laws. (Allbusiness, n.d., *ƒ‚¶2)
The popularity of the franchise business model has to do with its proven track record of
success and ease in becoming a business owner. Independent, non-franchise businesses
have a much higher likelihood of failure within their first year than franchises. One of the
most compelling reasons is that, in a franchise operation, the franchisor provides business
expertise (marketing and advertising plans, management guidance, financing assistance,
site location, administrative support and training) that otherwise would not be available to
businesses starting from scratch. Franchisees bring to the relationship entrepreneurial spirit
and drive, which may not be enough to keep a business afloat if the franchisee lacks
significant business acumen. (Allbusiness, n.d., *ƒ‚¶3)
Franchising extends beyond the right to use a well-branded business name and sell a
franchisors services or products. There are three main types of franchising: (Allbusiness,
n.d., *ƒ‚¶4)
¢ Product/trade name franchising: A franchisor owns the right to the name or trademark
and sells that right to a franchisee. (Allbusiness, n.d., *ƒ‚¶5)
