Franchising in Croatia

Franchising is the practice where a company (franchisor) gives a licence to use its trade name (brand) and its business model (know-how) to a particular person or group (franchisee) who agrees to act in accordance with the terms and conditions of a franchise agreement. Many different types of franchise can be found in research and practice. There are two theories explaining the reasons for using franchising: agency theory and resource scarcity theory. Franchising has a major impact on the world economy. In Croatia, franchising is in the early stage of development and there is a need to encourage businesses to expand this business model as a way of developing and expanding business (franchisor) or starting a new business (franchisee). This paper is divided in two parts. The first part deals with the franchising (definition, theoretical framework and franchising in Croatia), while the second part gives an example of a franchising business in Croatia