Formulation of a Policy Package for Developing a Franchise Model for retail distributors in Iran (Case study: Grocery Stores)

The present status of the goods distribution channels in Iran can be characterized by such features as a high share of traditional actors compared to modern players in the market (quantitative feature); low technical and managerial standards (qualitative feature); and a large number of unregistered retail sellers in the market. The major roots of this problem can be found among others, in the lack of a general rule of law and the weakness of public institutions monitoring the distribution system. The aforementioned issues together underscore the relevance of organizing the goods distribution network, an important component of which is creating a network of grocery stores (in the form of franchise). More precisely, an operational strategy to modernize the goods distribution networks in Iran is to adopt models experienced by other countries. In this context, due to its integrated management system, application of technical and managerial standards and more importantly, and the possibility of permanent monitoring of processes needed to conduct the business affairs, using the franchise model can be considered as one of the most effective methods to improve performance especially in modern grocery stores. However, despite some efforts made by private sector in this regard and in spite of all benefits of creating such networks to develop the goods distribution system, the membership of distribution units in the existing networks is not that simple. The major policy recommendations of this research project which aimed at putting forward practical solutions in order to promote the franchise model of doing business among grocery stores in Iran, include: drafting a comprehensive legal bill on franchise model to be submitted to the Islamic Consultative Assembly (the Parliament) (due to the lack of specific regulations on franchise); creating a "franchise single window" (due to the non-registration of franchise businesses in Iran and the lack of a special monitoring institution in this field of activity); formulating technical and managerial standards in field of grocery stores and having them implemented by all actors involved (due to the need for observing precise and strict standards by franchisors as a major characteristic of the franchise model).

Keywords: Goods distribution network; grocery store; franchise. 

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